With significant support from the government, the UK is poised to become the fintech capital of the world, generating already £6.6 billion (US$8.7 billion) in revenues as of 2015 and employing over 60,000 people, second only to California with 74,000, according to Sonovate.
Digital is one of the fastest-growing sectors of the UK economy and according to the Global Financial Centres Index, London ranks first as a global financial center ahead of New York, Hong Kong and Singapore.
Additionally, London-based fintech startups benefit from tax breaks and programs designed to foster growth, such as R&D tax incentives that are available to companies that employ fewer than 500 people, according to Tech City UK, and it is believed that a fintech company in London can reasonably expect to go from idea to operation much more quickly than in other countries.
This makes the UK, and London in particular, fertile ground for fintech development.
Today, London hosts some of the most successful fintech innovators in the world: payments startups TransferWise, WorldRemit and Bankable, peer-to-peer lending marketplace Funding Circle, online investment management service Nutmeg, forex startup Currency Cloud, as well as digital challenger banks and neo-banks Atom Bank, Tandem, Mondo and Starling, are just a few of them.
In 2015, the UK VC-backed fintech investment activity reached an all-time high with US$962 million through 61 deals, according to KPMG and CB Insights’ The Pulse of Fintech 2015 in Review report. London alone attracted over US$743 million in venture capital through 50 deals with the largest ones being Funding Circle’s US$150 million Series E round, Atom Bank’s US$128 million Series B round and WorldRemit’s US$100 million Series B round.
Today, we take a look at London’s leading fintech investors.
Founded in Geneva in 1996, Index Ventures is a Europe- and San Francisco-based global venture capital firm focused on making investments in information technology and life sciences companies.
The firm has invested in 160 companies in 24 countries and employs over 35,000 employees worldwide. Its principal offices are located in London and San Francisco.
Index Ventures’ portfolio of fintech companies includes iZettle, Clinkle, TransferWise, Xapo, Swipely, BitPay, iZettle, CrowdRise and Funding Circle.
Launched in May 2007 by a group of 30 European investors, Seedcamp invests capital into pre-seed and seed stage startups, providing up to €200k and a lifelong platform of learning, networking and capital to support the most ambitious founders.
As of September 2015, Seedcamp has a portfolio of 192 companies and is backed by over 30 institutional venture capital firms and angel investors.
Seedcamp’s portfolio of fintech companies includes Transferwise, Monese, Finance Fox, WealthKernel, Traderion, Elliptic and Zercatto.
Balderton Capital is a London, UK-based venture capital firm that invests between US$1 million to US$20 million into early-stage, primarily in Europe-based technology and Internet startup companies.
Originally founded in 2000 as Benchmark Capital Europe, Balderton Capital became fully independent in 2007. It has made over 100 early-stage investments since 2000 and currently manages over US$2.2 billion in assets.
Balderton Capital’s portfolio of fintech companies includes Zopa, Wonga, Nutmeg and Crowdcube.
The London Co-Investment Fund
The London Co-Investment Fund is a government-backed fund launched in 2014. It is founded and managed by Funding London and Capital Enterprise.
The London Co-Investment Fund has raised £25 million from the Mayor of London’s Growing Places Fund to co-invest in seed rounds between £250,000- £1,000,000, led by selected co-investment partners.
The London Co-Investment Fund’s portfolio of fintech companies includes Droplet, Stockflare, Curve and StockViews.
Founded in 1996 and with offices in London, New York, Stockholm and Oslo, Northzone is a venture capital firm investing in tech startups.
So far, Northzone has invested in over 100 companies and is managing over US$1 billion in assets.
Northzone’s portfolio of fintech companies includes Klarna, Market Invoice, iZettle, Auka, BehavioSec, Crosslend and Qapital.
Founded in 1999, Octopus Ventures is a London and New York-based venture capital firm that does seed, early-stage venture, and later stage venture investments.
Octopus Ventures invests between US$200K to US$25 million into promising ventures from the commerce and marketplaces, financial services, hardware and infrastructure and software and services sectors.
Octopus Ventures’ portfolio of fintech companies includes Currency Fair, Calastone, Elliptic, Mi-Pay and Semafone.
Founded in 1983, Accel is an American venture capital firm investing in companies from inception through the growth stage. The company manages over US$8.8 billion from its US offices in Palo Alto, California and San Francisco, California. It has separate operating funds in London, India and China.
Accel’s portfolio of fintech companies includes Circle, Card Spring, Gumroad, Clinkle, Lenddo, Braintree, Nomi and Yodlee.
83North, formerly Greylock IL, is a global venture capital firm with more than US$550 million under management. The fund invests in European and Israeli entrepreneurs, across all stages of consumer and enterprise companies. It has offices in London and Tel-Aviv.
83North’s portfolio of fintech companies includes Payoneer, Wonga, iZettle, Marqeta, BlueVine and Ebury.
Founded in 2006, Draper Esprit is a Pan-European venture capital fund that invests into disruptive tech companies at the early and growth stages.
Draper Esprit is a member of the Draper Venture Network, the largest venture capital network in the world with 140 investment professionals and over 600 portfolio companies.
Draper Esprit’s portfolio of fintech companies include MoPay and Crowdcube.
Founded in 2010, Anthemis Group is a venture capital firm that invests in seed, early-stage and later stage ventures that are tackling financial services and related technologies and infrastructures.
Anthemis Group has invested in Betterment, Moven, Simple, Vericash, Currency Cloud, and Fidor Bank.
Passion Capital is a London-based early stage venture capital firm launched in 2011 as a private-public hybrid fund with an initial fund of US$60 million, of which US$40 million was from the United Kingdom government.
Passion Capital has funded 50 early-stage tech startups, backing over 100 founders who have grown their teams to include over 700 team members.
Passion Capital’s portfolio of fintech companies include Mondo, Coinfloor, Flattr, Ginmon, GoCardless and Native.
Notion Capital is a venture capital firm based in London, England, investing in early stage business-to-business (B2B), software as a service (SaaS) businesses, with three funds totaling US$270 million under management.
Notion Capital focuses on fintech, digital marketing and adtech, business intelligence, Big Data and cybersecurity, among other sectors.
Notion Capital’s portfolio of fintech companies include Currency Cloud, GoCardless, DealFlow, TradeShift and Demyst Data.
Founded in 1980 in New York, General Atlantic is a leading global growth equity firm providing capital and strategic support for growth companies.
As of early 2015, General Atlantic has approximately US$17.4 billion in assets under management and more than 100 investment professionals based in New York, Greenwich, Palo Alto, Sao Paulo, London, Munich, Amsterdam, Beijing, Hong Kong, Mumbai and Singapore.
General Atlantic’s portfolio of fintech companies include Adyen, Avant, Klarna, Insurity, IIFL Wealth Management, Network International and Options House.
London fintech scene has been going hot with lots of Fintech events in the upcoming months. Some of the notable ones for you to consider to go:
The European RegTech Congress – October 12
The European RegTech Congress will provide a platform for the discussions really needed to move the space forward. With a dedicated track to exploring the realities of Regtech adoption, how to harmonise wide ranging platforms and the standards the technology needs to meet. Our practical ‘RegTech in Action’ track featuring dedicated seminars on topics such as the impact the move to Mifid II will have and how RegTech can manage Post-Brexit uncertainty. For more information, visit www.regtechevent.com
LendIt Europe 2016 with the P2PFA – October 10,11
The 3rd annual LendIt Europe conference and expo will take place at the InterContinental London – O2. This year’s event will bring together more than 1,000 industry leaders and include the region’s largest online lending expo with more than 2,500 square metres of exhibition space.
Brexit & Global Expansion Summit 2016 – Oct 17,18,
The event includes a comprehensive conference programme with keynotes, multiple track sessions, a large exhibition and welcomes over 1,000 delegate and 120+ speakers. In addition, Brexit & Global Expansion Summit will play host to a series of high level one-to-one meetings, a range of networking activities and deep dive workshops.