Improbable, a British technology start-up, has raised more than 500 million US dollars (£390 million) in a funding round led by Japan's Softbank.
The cash will be used to develop Improbable's virtual reality technology and will see recruitment "accelerated" at both its London and San Francisco offices.
The deal is thought to value the company at over 1 billion US dollars (£780 million) and the investment will be seen as a further endorsement of the UK's technology sector.
Softbank will hold a non-controlling stake in Improbable, which was founded by two Cambridge graduates.
The move comes after Softbank sold a 25% stake in British chip designer ARM Holdings in March, just six months after snapping up the firm.
Herman Narula, Improbable's 29-year-old chief executive, said: "We believe that the next major phase in computing will be the emergence of large-scale virtual worlds which enrich human experience and change how we understand the real world.
"At Improbable we have spent the last few years building the foundational infrastructure for this vision."
The tech firm uses cloud-based servers to create virtual worlds for games with multiple players, as well as simulations of the real world on a vast scale.
Improbable is also researching how to use the technology in a range of applications including city management, cyber security and telecommunications.
Deep Nishar, managing director of Softbank, said the company's breakthrough technologies were becoming "vital and valuable platforms for the global gaming industry".
Improbable employs 200 people at its office in Farringdon, central London, and recently opened an office in San Francisco.