Brexit: Early-stage tech investment shows worrying signs in the UK Watch Now

The UK's tech sector has attracted $6.7bn in the first seven months of 2019, exceeding the total amount of foreign capital the sector attracted in all of 2018.

Over half of 2019's investments came from US and Asian investors thanks to the likes of Amazon and Japan's SoftBank, which backed the two largest investments in UK tech startups, according to Tech Nation.

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Tech Nation is partially funded by the UK government and was announced by former UK Prime Minister Theresa May in 2017.

SoftBank was behind the largest investment so far in the UK this year via its $800m investment in Greensill, a company that provides businesses around the world with supply-chain finances.

Amazon led the second largest investment of $575m in UK food delivery service Deliveroo this May.

The third largest investment of $550m happened a few weeks ago and went to Babylon Health, which specializes in remote health services using a combination of AI and medical experts.

Other UK companies that landed new backing of between $400m to $100m included OakNorth Bank, Ovo Energy, Checkout.com, WorldRemit, Monzo, and Wejo.

Mitsubishi took a 20% stake in Ovo Energy for $200m in February to help expand its business in Germany, France, Spain and Australia. Ovo wants to invest more in software to help homeowners reduce energy bills.

Tech Nation highlights that the top 30 foreign-funded companies have created more than 5,000 jobs in the UK and that the sector overall is averaging about $1 billion a month from foreign and domestic investors.

UK secretary of state for Digital, Culture, Media and Sport (DCMS) Nicky Morgan said the investment figures, particularly the large input from the US and Japan, show foreign investors have confidence in UK tech.

"As we leave the EU and expand our trading relations around the globe, the growing interest from two of the world's biggest and most important technology markets is one more reason we should be optimistic about our future," she said.

While increased foreign investment in the UK's tech sector is good news, much of the UK's tech sector is still hugely dependent on the EU for exports – and the government says the country is set to leave the EU on October 31, with or without a deal on how to govern trade.

Figures released yesterday by DCMS showed that the "computer programming, consultancy and related activities" sector was the largest exporter in the UK and behind £9.1bn worth of services delivered to the EU. More than 40% of services exported by the UK digital sector go to the EU.

The UK government also this week claimed it will end the free movement of labor on day one of its departure, if the EU doesn't accept changes to the agreed deal, and from there implement a skills-based immigration regime.

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And job advertisements for tech jobs in the UK have taken a dive in recent months, according to figures released by tech association CompTIA today.

Employers in the UK advertised job openings for 141,395 IT positions in the second quarter, but this was down 13% compared with the first quarter and 40% lower than the nearly 250,000 IT job postings in the corresponding quarter last year.

"This mirrors the downward direction for all job ads in the UK employment market this year compared to the highs of a year ago," said Amy Carrado, senior director, research and market intelligence at CompTIA.

Companies behind most tech job postings are the National Health Service, Amazon, British Sky Broadcasting Group, GCI Group, and Square One Group.

While job postings are down, the UK unemployment rate for tech workers was just 3.8%, which is the lowest unemployment rate since the fourth quarter of 1974. With unemployment rates that low, companies are likely to be seeking workers from outside the UK.