London – Still The #1 FinTech Hub

Elena Mesropyan, LTP

Investors have poured more than $1 billion into British FinTech companies since the beginning of 2017. In H1 2017, UK attracted $564 million of VC investment, up 37% on H1 2016. FinTech is worth $9.25 billion to the UK economy and now employs 60,000 people. “FinTech is a real asset for the UK’s economy and we are a global leader in our own right,” Catherine McGuinness, Chairman of the Policy and Resources Committee at the City of London Corporation, saidearlier in October 2017.

The whole nation is embracing FinTech. About 77% of UK businesses are aware of FinTech products and services and 65% have adopted at least one FinTech application, with a fifth (19%) taking on four. MarketInvoice, a London-based invoice financing firm found that these as result of using FinTech products and services, adopters reported saving (on average) over £5,500 a year. Just a week ago, BNY Mellon and HSBC have each teamed up with London-based startup Algomi, which is backed by exchange operator Euronext and analytics firm S&P Global, in a bid to revivify trading in the corporate bond market.

Out of the handsome sum of $1 billion invested into British FinTech, $980 million – 90% of all FinTech investments in the country – was raised by FinTech firms in London.

Despite unflattering expectations, this year is set to become the record year for FinTech in London. The count goes almost a million in a day – just a day ago, Countingup, a London-based company that brings together business banking and accounting, picked up €750,000 in a funding round led by Frontline Ventures.

“London remains a world leader in FinTech,” said the Deputy Mayor of London for Business, Rajesh Agrawal. “More than £1 billion in venture capital has been invested into London’s FinTech sector since the EU referendum – this is yet more proof that global investors believe London will remain a leading FinTech hub for many years to come.

Clearly, Brexit poses major challenges – but London’s position as a global financial center and world-class technology hub is built on strong foundations which cannot be replicated anywhere else: access to more software developers than Stockholm, Berlin and Dublin combined, Europe’s largest FinTech accelerator Level39, and the continent’s only truly global financial market.”

London & Partners, Mayor of London’s official promotional agency, suggests that in the past five years, London’s FinTech sector has received more than five times the amount of investment than any other major European city. Since 2012, London FinTech companies attracted more VC money than Paris, Frankfurt, Berlin, and Amsterdam combined.

“London is the optimal place to set up and scale a FinTech company,” Yoyo’s CEO Alain Falys shared with CNBC. “Thanks to the unique ecosystem we have in the city — which gives us access to talent, capital, forward-looking retailers and consumers — we’ve grown into a major brand in a very short period of time, becoming Europe’s fastest-growing loyalty and mobile payments provider.”

London consistently attracts foreign direct investments (FDI) from around the world. Between 2006 and 2016, the capital has recorded investments from 67 different countries. The US, India, China, Japan and Spain together accounted for 56% of the investment. Of top source countries, the fastest-growing contributors to FDI into London are China, which has seen a tenfold increase over the last 10 years, Italy (+450%), and Canada (+400%).

Not only London is killing it with FinTech in 2017, the Global Financial Centers Index (GFCI) places London at the top financial center among vibrant, competitive financial centers that give cities economic advantages in information, knowledge, and access to capital. GFCI shows that London and New York are the two leading global financial centers, with Hong Kong and Singapore ranked third and fourth respectively, closely followed by Zurich, Frankfurt, Geneva, Chicago, Tokyo, and Sydney.

“Whether you look at it from the perspective of talent, infrastructure, access to capital or the excellent regulatory environment, London is without question the best city in the world to launch a FinTech startup. In just two years, Revolut has raised over $90m in investment and attracted over 900,000 users. There is no doubt in my mind that a large part of our success is down to choosing London and the UK as our headquarters and home,” emphasized Nikolay Storonsky, CEO of Revolut (raised $66 million in a funding round in July).

Source: LTP


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