Chinese technology and investment group Cocoon Networks is launching a £500 million ($720 million) London-based venture capital fund aimed at investing in UK and European tech startups.

Cocoon Networks, with the backing of China Equity Group, was one of the first investors in to Baidu, the ‘Chinese Google’, and Hanxin Capital will invest in tech companies whose products and services show potential for growth in the Chinese market.

The fund will invest in tech companies across a wide range of sectors including fintech, biotech, medical devices and the UK’s creative tech industries. Companies looking to expand into China will also be offered assistance in navigating Chinese legislation and doing business there.

As part of a wider investment, Cocoon Networks, in partnership with University College London, is also setting up the capital’s biggest incubator space, a 70,000 sq ft building situated in the heart of Shoreditch. Cocoon says it will not only be an incubating space for technology companies but it will also work with some of London’s universities to attract talent, offer accelerator programmes and co-working spaces.

John Zai, Founder and CEO, Cocoon Networks said: “The fund and incubator programme will bring awareness for more Chinese investors to get into London’s booming technology sector. It will also help many companies grow and expand into China.”

Gordon Innes, CEO London & Partners, The Mayor of London’s promotional and economic development company, said: “This is a significant vote of confidence in the global nature of London’s tech sector and will deliver significant investment into some of the capital’s brightest and best startups.

The announcement by Cocoon Networks came as London & Partners said that it was on course to secure record investment from Chinese companies in London this financial year.

Over the past nine months, 28 Chinese companies have pledged to set up in London, with that figure expected to rise to nearer 40 by the end of March 2016.