London was confirmed last month as the world’s top hub for fintech venture capital funding. This year so far, it has raised $6.3bn which is well ahead of New York, at $4.5bn and Silicon Valley, at $5.5bn. It comes on the back of record-breaking VC investment into London in 2021 of $25.5bn as well.
London is home to more start-ups and scale-ups than anywhere else. There is nowhere else in the world that one can meet venture capitalists, regulators, clients and partners, all within a short ride on the underground, an ecosystem that is now even better served with the newly-opened Elizabeth line.
The success of London’s fintech sector is a testament to traditional industries such as fashion, financial services, healthcare and education innovating with technology to create bold new ideas.
The capital’s position as a global financial centre, combined with its status as a global tech hub, has cemented the UK as a leader in fintech. London is a testbed for innovation and a place where new ideas thrive, and is home to 3,018 fintech HQs, more than New York’s 2,531 and San Francisco’s 1,515.
Thanks to unicorns such as Wise, Starling Bank, Onfido, Monzo and Revolt, the UK represents more than 10pc of the global market share in fintech. The sector is thriving and has proved incredibly resilient over the past two years. In fact, it has performed remarkably. It wants to ensure this continues to be the case, as it is critical to the goal of building a better capital city for everyone – a city that is fairer, greener, safer and more prosperous place for all.
Research from Hays has revealed that recruitment in London’s tech sector has now risen above pre-pandemic levels, with the sector in the UK now worth $1tn. The only other countries to hit this figure are the US and China, and tech investment and innovation is set to play a key role in driving the UK’s economic recovery.
The creativity and diversity of London creates a wonderful playground for innovation to thrive. Whether you want to set up, expand or scale your business, it offers a wealth of resource.
Furthermore, former chancellor Philip Hammond is set to join an all-star line-up at a new fund that will try to boost the chances for UK fintechs, according to reports. A new vehicle provisionally called the Fintech Growth Fund will raise $1bn to back promising start-ups, Sky News reported, and Hammond is set to join its advisory board.
The fund will look to institutional investors for capital, the news website reports, and will not be affiliated with Westminster politics. A flagship report by ex-WorldPay boss Sir Ron Kalifa into the UK’s fintech landscape in 2021 highlighted a gap for funding for companies that want to go beyond their Series B stage and raise money to scale up.
Lord Hammond’s potential foray into the fund wouldn’t be his first involvement in the investment world since leaving office. In October he took on the role of an advisor at Crypto start-up Copper, after joining start-up lender Oak-North’s advisory board in 2020. His contract with senior government officials on behalf of Oak-North was branded “unwise” and “not acceptable” by the chair of the Advisory Committee on Business Appointments last year.
Barclays, London Stock Exchange Group and Mastercard are among City stalwarts asked to provide seed funding to the Fintech Group Fund. Former government fintech ambassador Alastair Lukies and FintechTech Alliance boss Phil Vidler are expected to play a role in the fund. (The writer is our foreign correspondent based in the UK)
Oman Observer is now on the WhatsApp channel. Click here
