Awe-Inspiring London FinTech Industry Is Firing on All CylindersDecember 30, 2015    By : Sofia
London is known to be one of the world’s hubs of innovation with a wide range of well-known disruptive startups coming from the UK’s disruption center. Along with Silicon Valley and New York, London is a place of tremendous opportunities for bright entrepreneurs. In last five years, out of $9.8 billion of investments in FinTech across the European region, 55% are invested in UK FinTech. Last year, $66 million were invested in London FinTech, making it the third leading financial technology location worldwide after Silicon Valley ($1.5 billion) and New York ($600 million).
London FinTech has been quite active with global events taking place in the European innovation hub. Earlier in December, TechCrunch Disrupt 2015—one of the world’s biggest tech events—resumed in London.
Another notable event took place in London at the beginning of December—unBOUND Conference. The two-day unBOUND London is UK’s most exciting innovation festival which connects leaders, brands and growth-stage companies from digital ecosystems around the world. Aimed to foster innovation, the festival gathered entrepreneurs, brands and global corporations with disruptive technology and creative insights to explore new opportunities. One of the most exciting announcements at the conference came from Barclays; the bank unveiled Launchpad—the first financial service in the UK that gives Barclays customers the opportunity to try out and give feedback on new features and app ideas, helping shape the future development of digital solutions for the bank.
In November, full-stack mobile-first smart bank Mondo announced the distribution of 500 Mondo Alpha cards to users in London. Anyone in London who was at least 18 years old could sign up for Mondo Alpha cards. Through this pilot, Mondo wants to launch the prototype to a small group of people to see how people will react to it and use it.
London is one of the most advanced cities when it comes to innovation adoption. Elimination of tickets and contactless payments adoption rates are speaking in favor of it. Transport for London (TfL) passengers can travel using contactless payment cards across the Underground and most of the other London transport. Nearly 50% of London’s population already has contactless debit or credit cards which can conduct transactions under £20 without the need for a PIN number or a signature. Contactless payments have been in use in London buses since December 2012. There are currently about 70,000 contactless payments being made on buses in a day.
London is also the city where an 800-year-old tradition was broken two years ago. December 2013 saw the breaking of an 800-year-old tradition of cash-only payments at Covent Garden’s arts and craft market in central London. Stallholders at the venue were fitted with PayPal’s mPOS card readers which enabled them to accept credit and debit card payments over the Christmas shopping period. Over 8 million shoppers turned up for the event.
The year 2015 was a successful one for London FinTech as some of the most promising FinTech startups raised significant funds.
Data source: Statista.com
London’s FinTech Startups
London FinTech ecosystem has been built by some of the most innovative FinTech startups in the world that have been recognized in a variety of rankings.
The list of companies is certainly not exhaustive, but among them are some of the most interesting FinTech startups operating in London. Some of them have been featured in our list of the most promising FinTech startups from Western Europe as well as other rankings.
Monese is one of the FinTech companies featured as a promising one. It is a digital banking service that let users open a UK banking account on their mobile in minutes regardless of their citizenship. Monese targets immigrants who experience daunting tasks in opening a UK bank account as a foreigner. The mobile banking service lets users open a current account and get a Visa debit card in just three minutes with a snapshot of their passport and a selfie.
Another interesting example is Azimo. Founded in 2012 and headquartered in London, Azimo is a global payment processing business providing Web and mobile-based inter-country consumer money transfer services. The company has raised $31.6 million in funding. Azimo believes, that sending money abroad should be fast, easy and good value for everyone. Azimo claims to be up to 85% cheaper than the High Street banks and online money transfer companies.
Osper is also among some of the most promising FinTech startups. Based in London, Osper is a prepaid debit card and mobile banking service that empowers young people to manage their money responsibly. It offers a safe MasterCard prepaid debit card and a simple mobile banking app with separate logins for young people and parents. All money on Osper is safely managed by a European regulated bank.
TransferWise is one of the classic examples of the most successful FinTech companies and one of the members of the FinTech “unicorns” club. TransferWise is a peer-to-peer money transfer service that allows foreign students and businesses to transact money globally.
Here are brief descriptions of some of the London FinTech companies represented on the chart:
Skrill is an e-commerce platform that facilitates online payment transactions for businesses and individuals.
Simply Business is the UK’s largest business insurance broker. Launched in 2005, Simply Business provides an online brokerage service delivering policies tailored to individual business requirements.
Payumi makes it easier and more efficient to collect money from friends or colleagues for a wide variety of social situations where people need to share the cost.
GoCardless is a UK-based service that allows smaller merchants to easily set up interbank transfers for customers.
Zopa is a P2P money lending service that allows lenders and borrowers to deal directly with one another, cutting out the banks who act as middlemen.
Currency Cloud‘s B2B Payment Engine API offers real-time wholesale rates and a fast & secure payment network for businesses.
Zopa offers peer-to-peer loans with low rates, flexible terms and no early repayment fees.
Kantox is a foreign exchange service provider, offering SMEs and mid-cap companies a comprehensive solution to their foreign exchange needs, based on transparency, efficiency and value.
Borro is an online company providing loans secured with luxury assets such as fine art, antiques, jewelry, luxury watches & luxury handbags.
Lendable is a peer-to-peer lending platform that provides instant decisions and personalized rates.
Ezbob‘s smart lending platform provides a fast, flexible and convenient source of credit to entrepreneurs looking to expand their business. Ezbob, along with sister brand Everline, form the UK’s largest business e-lender having provided over £90 million and over 8,000 loans to help small businesses turn opportunities into reality since 2011.
RateSetter is a P2P lending website that allows users to lend and borrow money directly with each other according to their own interest rates.
MarketInvoice is Europe’s first and biggest peer-to-peer lender for businesses with outstanding invoices.
Wonga is an online payday lender that offers short-term personal cash loans to UK consumers.
Coinfloor is a UK bitcoin exchange based in London that enables verified users to buy and sell bitcoin on an open trading floor.
Elliptic is a technology company that makes blockchains safe for the enterprise.
Algomi creates the network that enables all market participants to intelligently harness data to make valuable financial trading connections.
Calastone is a global transaction network for the mutual fund industry.
Privitar enables organizations to extract value from sensitive data sets while complying with regulation and protecting client privacy.
OpenGamma provides real-time market risk management technology for financial institutions.
DueDil is a due diligence tool and free online company database that stores information on businesses.
Acunu is a low-latency analytics platform for monitoring and controlling high-velocity data used in production environments.
London’s FinTech Investors
London FinTech ecosystem would be incomplete without active FinTech investors looking for disruptive solutions in the market. Some of the investors have been featured in our list of 61 VC firms to consider if you are a FinTech startup raising money.
Location: Palo Alto, Mexico, New York, Greenwich, Amsterdam, London, Munich, Mumbai, Singapore, Hong Kong, Beijing
Portfolio of payments companies: Adyen, Avant, Klarna
In their own words: General Atlantic is a leading global growth equity firm providing capital and strategic support for growth companies. Established in 1980, General Atlantic combines a collaborative global approach, sector-specific expertise, long-term investment horizon, and a deep understanding of growth drivers to partner with great management and build exceptional businesses worldwide.
Stage/size of investments: Early-, later-stage ventures and private equity investments
Segments: Financial Services, Business Services, Retail and Consumer, Healthcare, Internet and Technology
Location: Beijing, Hong Kong, London, Mumbai, New York, San Francisco, São Paulo, Shanghai
Portfolio of payments companies: Capital First, Santander Asset Management, China Huarong, Au Financiers
In their own words: At Warburg Pincus, private equity investing is its only business. Established more than 45 years ago, Warburg Pincus has invested more than $50 billion in more than 720 companies in more than 35 countries around the world. The firm has more than $35 billion in assets under management. Its active portfolio of more than 120 companies is highly diversified by stage, sector and geography.
Stage/size of investments: Seed, early-stage, later-stage venture and private equity investments
Segments: Energy, Financial Services, Healthcare and Consumer, Industrial and Business Services, Real Estate, Technology, Media and Telecommunications
Location: Boston, Menlo Park, London, Mumbai, Hong Kong
Portfolio of payments companies: BATS Global Market, BluePay, BillDesk, Smart Stream, Yeepay.com, RGM Advisors
In their own words: Founded in 1968, TA Associates is one of the oldest and largest growth private equity firms in the world. It invests in growing private companies in exciting industries, with the goal of helping management teams build their businesses into great companies. This mission has been at the heart of TA’s approach to investing, and its more than 450 current and former portfolio companies illustrate its commitment to provide steady support through the cycles of the global economy. With $18 billion raised since inception and over four decades of experience, it offers its portfolio companies strategic guidance, global insight, M&A support, recruiting assistance and a significant network of contacts, in addition to sound financial backing.
Segments: FinTech, Technology, Financial services, Healthcare and Consumer businesses, Communications
Location: Boston, Menlo Park, London
Portfolio of payments companies: 360T Group, Progressive, Ogone, Fleetcor
In their own words: Summit Partners was founded in 1984 with a commitment to find and partner with exceptional entrepreneurs to help them accelerate their growth and achieve dramatic results. Since then, Summit has become the investment partner of choice for many of the best growth companies in the world. It has grown to a team of more than 90 investment professionals, led by 24 Managing Directors whose tenures average more than 14 years with Summit. It has the capital and team to support your growth initiatives.
Stage/size of investments: Flexible investment approach offering growth equity, venture capital and fixed income ranging between $5 million and more than $500 million
Segments: Financial Technology, FinTech, Healthcare, Internet & E-commerce, Consumer, Educational, Software, Communications, Electronics, Life Sciences
Location: New York, Cupertino, San Mateo, Menlo Park, London, Tokyo, Hong Kong
Portfolio of payments companies: Alibaba Group, Cast & Crew, Global Blue, Interactive Data Corporation, Renovate America
In their own words: Silver Lake is the global leader in technology investing, with over $26 billion in combined assets under management and committed capital and a team of approximately 100 investment and value creation professionals located around the world. Dedicated to the thesis that the dynamism and rapid pace of innovation in global technology demand intensely focused domain expertise, Silver Lake differentiates itself from generalist investment firms by devoting its full scope of talent and intellectual capital to the singular mission of investing in the world’s leading technology companies and tech-enabled businesses.
Stage/size of investments: Later-stage ventures, private equity and debt financing investments
Segments: FinTech, Financial Services, E-commerce, IT & Cloud Computing, Healthcare, Mobile Communications
SBT Venture Capital
Portfolio of payments companies: Advanced Merchant Payments (AMP), eToro, IdentityMind Global, Mobeewave, Sequent, Walkbase
In their own words: SBT Venture Capital manages a FinTech VC fund investing in the most promising growth-stage companies in the financial services industry. It brings a solid experience in the banking industry, an incredible network of financial services companies and related technology vendors. SBT’s main partner and investor is Sberbank, the largest commercial bank in Russia. The firm’s current focus is on early-stage growth companies that are generating revenue, in need of financial/intellectual capital and access to the right network in order to rapidly scale. SBT provides more than just finance; it foster growth.
Stage/size of investments: Early-stage growth companies
Segments: FinTech, Financial Services, Banking
Location: Mountain View, San Francisco, Boston, New York, and London.
Portfolio of payments companies: LedgerX, OnDeck, Ripple, LendUp, Upstart, Plaid, CircleUp
In their own words: Google Ventures provides seed, venture and growth-stage funding to the most innovative and promising entrepreneurs across a variety of industries. Founded in 2009, Google Ventures has extensive entrepreneurial experience, deep technical knowledge and expertise in building high-growth, scalable products and companies. Among its 300 investments are Uber, Kabam, Flatiron Health, Cloudera, Homejoy and DocuSign. Google Ventures is headquartered in Mountain View, Calif., with offices in San Francisco, Boston, New York and London.
Stage/size of investments: Seed, venture and growth-stage funding
Segments: Life Science, Consumer, Mobile, Commerce, Enterprise & Data
Location: California (Silicon Valley), New York, London, India (Bangalore)
Portfolio of payment companies: Circle, Card Spring, Gumroad, Clinkle, Lenddo, Braintree, Nomi, Yodlee
In their own words: Accel Partners has been committed to helping exceptional entrepreneurs build lasting, category-defining technology companies since 1983. Utilizing a focused, “prepared mind” approach to investing, the firm partners with businesses that show potential for significant long-term success in specific sectors. Emphasizing synergy in its portfolio enables the company to offer the advantages of a cohesive, cooperative Accel community, including access to an extensive network of past and present entrepreneurs.
Stage/size of investments: Accel invests in companies from their genesis to growth. Its funding rounds include seed, early-stage and later-stage ventures.
Segments: Technology companies, Infrastructure, Internet & Consumer Services, Mobile, Software & Cloud-Enabled Services.
Location: London, San Francisco, Geneva, Jersey
Portfolio of payment companies: iZettle, Clinkle, TransferWise, Funding Circle, Xapo, Swipely, BitPay, iZettle, CrowdRise, Funding Circle
In their own words: The company backs the best and most ambitious entrepreneurs and helps them make their ideas real and lasting. The entrepreneurs it teams up with were born to build their businesses— it is their life’s mission. Working side-by-side with these visionaries makes the company incredibly optimistic about the future. The transformative companies it is building include Dropbox, Etsy, Sonos, SoundCloud, Flipboard, King, BlaBlaCar, Squarespace, Just Eat, Lookout, Hortonworks, Nasty Gal, Pure Storage, Supercell, Criteo, Funding Circle and many others.
Stage/size of investments: Index invests in various stages including seed, early-stage ventures, later-stage ventures and private equity investments.
Segments: Information Technology, Life Sciences
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