Despite the swirling uncertainties brought about by Brexit and major financial institutions seeking greener pastures in continental Europe, the UK fintech startup scene is anything but gloomy. In 2017, investment in these digital innovators surged by an impressive 30%, proving that resilience can often be the best accessory for growth.
The Numbers Don’t Lie
The figures paint a compelling picture: in the first half of 2017 alone, UK fintech startups attracted a whopping $564 million. This marked an increase compared to the previous year, showcasing a steady flow of confidence from both domestic and foreign investors alike. Notably, more than half of this funding originated from outside the UK, indicating a robust international appetite for the British fintech brand.
Foreign Investment: The Lifeblood of Innovation
Abdul Haseeb Basit, the chief financial officer of Innovate Finance, highlighted the perspective of foreign investors. He stated, “Were they to not invest in UK companies, they feel like they might miss an opportunity. The appetite is still strong.” It seems that even amidst the bureaucratic changes, the allure of British ingenuity remains a powerful draw.
The Giant’s Retreat: A Contrast in Perspectives
While the fintech world celebrates, traditional giants like Morgan Stanley and Goldman Sachs are clamoring to establish a foothold in Frankfurt, claiming it’s a safer bet in the post-Brexit era. However, Basit points out that despite slowdowns, there’s a noticeable recovery in the fintech sector since the referendum. “Things have slowed, but we’ve seen an improving recovery since the referendum last year,” he mentioned, although 2017’s figures were still trailing behind the boom of 2015.
Navigating Uncertainty: The Way Forward
As businesses grapple with the complexities of the UK’s split from the European Union, the government has promised a white paper outlining the implications of these changes, particularly regarding labor and citizen mobility, expected by September 2018. While policymakers strategize, the fintech ecosystem appears to be crafting its own path, fueled by innovation and adaptability.
A Unicorn’s Commitment to London
Meanwhile, it seems that not all have succumbed to the lure of relocating. Fintech unicorn TransferWise has unequivocally committed to remaining in London, unabashedly affirming its stance amidst industry uncertainties. As the dust settles from Brexit, startups like TransferWise may set the tone for others to follow suit and weather the storm.
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