London is set to further its lead as the centre for financial technology startups in Europe, with 2017 expected to set new records for investment in the sector, despite fears that Brexit will harm the industry.
According to the latest figures from London & Partners (L&P), the Mayor of London’s official promotional firm, investors from around the world have backed London-based fintech firms to the tune of £825m so far this year. This is a positive sign for the industry after UK fintech investment plummeted by more than a third in 2016 as investors put off decisions in the wake of the Brexit vote.
London is currently the fourth best city for fintech venture capital, behind San Francisco, Beijing, and New York, but is remains many times larger than any European rivals, such as Stockholm, Paris, or Frankfurt.
The last few years have seen a number of London-based fintech firms become household names as they revolutionised the sector, with the financial backing of investors around the world. One of the biggest London fintech success stories, currency exchange platform Transferwise, is reported to be in discussions with investors to raise a further £77m, which would value the company at more than £1.2bn.
Earlier this year, peer-to-peer fundraising platform Funding Circle, also raised another round of financing. The London-based firm reportedly became a “unicorn, a term used to startups worth more than a billion dollars, back in 2015, and is seeing 90 percent year-on-year growth, according to TechCrunch.
However, a major part of London’s appeal as a hub for fintech companies is the role the city plays as a truly global financial market with straightforward access to the European single market. London’s Deputy Mayor for Business, Rajesh Agrawal, stressed the importance of the UK remaining in the single market after Brexit, saying:
“Clearly, Brexit poses major challenges – but London’s position as a global financial centre and world-class technology hub is built on strong foundations which cannot be replicated anywhere else: access to more software developers than Stockholm, Berlin and Dublin combined, Europe’s largest fintech accelerator Level 39, and the continent’s only truly global financial market.
“This highlights the need for a Brexit which enables London to maintain its place at the heart of the single market, as Europe’s financial capital.”