Level39, London's Fintech hub

The UK’s technology sector secured a record amount of venture capital funding in 2015, with London-based companies accounting for 63% of the total investments.

The figures, compiled by London & Partners for a press release published yesterday, 6 January, reveal a 70% increase on the already record figure of $2.1 billion that was raised in 2014. They also demonstrate that in London’s crowded tech scene, Fintech companies continue to lead the pack.

The politicians and business insiders quoted in the press release unanimously put this success down to London’s unique selling points. Of particular importance, says Mayor of London Boris Johnson, is the city’s position as one of the world’s leading financial centres, which gives its “world-class talent pool” ready access to the finance it needs to innovate.

While London’s tech scene exhibits a dizzying variety of different start-ups, as a financial powerhouse it should come as no surprise that many of the city’s greatest success stories have been in Fintech. This sector accounted for almost a quarter of the total venture capital investment attracted by London-based tech companies. Of particular note are the large sums secured by Zopa ($106m), WorldRemit ($100m) and TransferWise ($58m) .

The prize for the largest sum raised goes to the London-based peer-to-peer lending company Funding Circle, which bagged $150 million in a funding round led by DST Global. James Meekings, Funding Circle Managing Director hopes to use the investment to help the company become “the first choice for small business lending”.

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In the UK capital, entrepreneurs and financial professionals live and work in very close proximity, constantly rubbing shoulders and exchanging ideas. William Shu, co-founder and CEO of Deliveroo, is unreserved in his praise for London’s unique business environment: “Not only is the city great for investors and tech talent, but it’s been an ideal launch pad for our global business”.

Paul Dowling, CEO of Dreamstake, a platform that helps early stage European startups to raise angel funding, notes that even this record result takes no account of angel-investments in the UK capital, which can sometimes be significantly higher than the number of VC investments. “It is amazing to see how London has become a real Silicon Valley competitor specifically in the Fintech field. Five years ago, when we started Dreamstake, we only saw a bunch of guys full of ideas, but no real startups. Now every year we see record growth, thanks to the government’s tax incentives and other measures helping to create a suitable ecosystem. Of course, angel-investments are private, but by looking at tax relief applications alone we can see that at least $2.22bn were invested by angels in 2015. The true level of investment is likely to be three times that figure”.

With so few global cities able to compete with London in terms of the opportunities it offers to professionals in both finance and tech, it is no wonder the UK capital has become, in the words of Gordon Innes, CEO of London & Partners, “one of the world’s most attractive tech hubs for investors and entrepreneurs alike”.

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Photo: Kristina Moskalenko

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