Phillip Nunn Blackmore on how the UK remains Fintech leader in Europe
Phillip Nunn Blackmore CEO talks about how the UK remains Fintech leader in Europe
Welcome to the Phillip Nunn Blackmore CEO blog. Phillip Nunn is the CEO at the Blackmore Group and is talking about how the UK is the capital of Fintech unicorns.
The UK officially has more unicorns than anywhere in Europe. And by ‘unicorn’ I am, of course, referring to Fintech companies worth more than 1 billion dollars.
We have four Fintech unicorns, and a report by tech investment bank GP Bullhound values them collectively at $18.5 billion. As impressive as this already sounds, it’s even more so when you realise that there are only two on the rest of the continent, worth $4.6 billion between them.
London is Europe’s Fintech capital
A swathe of high profile start-ups in the capital has boosted London as a leader of Europe’s Fintech industry. Despite this upward trend, the report also showed that Europe is well behind China as a Fintech hub.
Money pumped into Fintech companies in Asia leapt to $7.1 billion in 2016, more than the funding for the US and Europe combined. Around $4.6 billion went into Fintech companies in the US, and just $1.4 billion in Europe.
Slight increase globally
Investment in Fintech increased to $13.6 billion but decreased in the amount of investment. The number of investments was down from 942 to 840.
China has 13 Fintech unicorns, with a total value of $112.3 billion. They include a spin off company from Alibaba (Ant Financial), which is a huge retail company worth $60 billion. So, what’s driving them?
This is down to the fact that the countries financial system and its regulations are looser than those in Europe, making investment in disruptive Fintech companies easier.
Fintech companies in the UK
GP Bullhound mentioned specific Fintech companies in the UK in its report, which was called FinTech: Anything but Alternative. These include Markit, a financial information company, Funding Circle (a peer-to-peer lender) and money transfer firm Transferwise.
But there’s been a stern warning from Governor Mark Carney, that the Bank of England might produce new regulations if the Fintech firms disrupt the financial system in the UK.
What about Brexit?
Research strongly suggests that Brexit won’t affect the UK remaining as a Fintech leader. Out of the UK’s 20 deals last year, nine were completed after the vote to leave the EU.
Chancellor Phillip Hammond threw his words behind Fintech when he said: “We have the time zone, the language, the legal system, the talent, the world’s number one financial centre, and the fastest growing tech centre in Europe. Our Fintech sector generated almost £7bn in revenue last year.”
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Phillip Nunn is CEO of The Blackmore Group investment house based in Manchester and London.