London becomes Europe's fintech capital
London is often called the world’s financial capital, but research released today shows it may soon grow into one of the world’s most important clusters of financial technology startups.
A report by Accenture revealed the rates of investment in fintech in the UK and Ireland grew twice as fast as similar companies in the Silicon Valley. In 2013 alone, investment increased to $265 million.
London’s first fintech week
According to the report’s authors, much of this activity was centred on London and was released as part of the capital’s inaugural Fintech Week, a series of events designed to help support the growing sector.
In the past three years a wide range of fintech companies have launched in the capital, including peer to peer lending, mobile payments and support services for the financial services sector.
Dominated by early-stage startups
Many of London’s recent fintech success stories including GoCardless, who recently raised a $7m series B round, have brought together disruptive technology with talent from across the square mile.
Today’s report shows further growth potential for the capital’s fintech sector, but it also acknowledges that many of our startups are still relatively early stage with 47% of investment last year going to first-round deals, compared to 27% over in Silicon Valley.
Growing support ecosystem
In the past year a number of new initiatives have launched to help support the sector.
Canary Wharf’s Level39 accelerator celebrated its first anniversary last week and already boasts a number of promising companies including Digital Shadows, a cybersecurity startup that already has a number of blue chip clients.
And earlier this month Barclays partnered with TechStars to launch a new accelerator programme in Whitechapel on the fringes of the City, with Microsoft Ventures, Central Working and an event space all on one floor.
Despite all of the positive energy there are still challenges for the sector. Julian Skan, Managing Director of Accenture’s Fintech Innovation Lab, based at Level39 said:
For a relatively new sector, fintech is developing fast. But, it is harder to raise funding, and entrepreneurs are less focused on commercializing new ideas than in the US. It is also difficult for small entrepreneurial companies to gain entry to big global banks.