Katia Lang, Editor-in-Chief at The Fintech Times.
Sitting on the 39th floor of One Canada Square, at the heart of London’s financial centre, Level39 (see what they did there?) is a thriving fintech community. We chatted to Ben Brabyn, the man running the show, about the benefits resident startups gain and why we shouldn’t call it an accelerator.
Let’s start at the beginning, how did you end up heading Level39?
I’ve been the head of Level39 for just over two years. I was approached at the end of 2015 at a fintech event I was attending and invited to come onboard. Before that happened, my career had developed in quite an unusual way. I started my life as a Royal Marine and then I became an investment banker with JP Morgan.
That’s a pretty remarkable switch! How did that shift happen?
It was probably a bit of curiosity in both directions. I grew up on a farm, did a degree in philosophy, and then spent five years as a Marine. Having spent that time essentially working as an instructor to foreign policy, one thing I was conscious I didn’t know that much about was economics. So I came to London and approached JP Morgan. The pitch was very simple, and this is true for every military veteran – who I think are one of the massive untapped resources in the UK economy – I pointed out that I’ve gone through 15 months of management and leadership training and a rigorous selection process, in which they tested my ability to solve problems, to communicate, to build teams, to lead people. A very small part of the skills I learnt with the Marine was not transferable to civilian life – maybe 4 hours in those 15 months. I made that case to JP Morgan, they liked the sound of it, they tested me on some financial subjects, which I’d done a bit of research on, and it was a good fit. I had a great time there – they sent me to Wall Street and I plunged right into the deep end of the analyst training programme.
While I was at JP Morgan, the .com bubble was bursting and I was fascinated by that. Although I didn’t know that much about technology myself at the stage, I actually started the commando course at the Marines with a guy whose father was one of the team members at CERN who invented the World Wide Web. We used to bounce ideas off each other – we went on a skydiving course together and came up with five business plans in a week. We thought we’d give one of them a try, so we set up a business in our spare time while I was at JP Morgan and he was working as a consultant. That became the first crowdfunding business in the UK, which was called Bmycharity. We were very early adopters of fintech – we integrated WellPay, and various early social networking tools, and then we got into data analytics – it gave us the opportunity to look into various aspects that are still pretty pertinent in fintech today. After we sold in 2010, I co-founded a couple of other businesses in e-commerce and renewable energy, and was then approached by the UK government to introduce foreign investors to UK companies looking for early-stage VC investment. In the two years I was in that role, I started developing technology in my spare time to automate some of what we were doing in UKTI, because we had this fantastic global network, and I wanted to operate it at a greater volume. So I left to develop that further. I was talking to some tech firms at that stage when I was literally tapped on the shoulder at a fintech event by the Canary Wharf Group about heading Level39. I’ve been admiring Level39 for a couple of years by that stage, and so here I am.
What was your biggest challenge as you came onboard?
People ask – ‘are you a co-working space, are you an incubator?’ Well, we’re right at the heart of Canary Wharf, so we’re actually a part of this massive financial district, within a five minutes walk of 30% of the world’s financial services IT budgets. At Level39, we’ve got 1,250 super smart, ambitious people from 48 different countries and 200 companies. What we’re seeking to do is invigorate the whole community in Canary Wharf, and beyond. We’re gonna do everything we can to serve a real diversity of people working at a diversity of companies, using a diversity of technologies, and addressing a diversity of markets. What that means is we can’t simply have a one size fits all – supporting diversity means ceding a degree of control. We’re supporting a community of such breadth, such depth, that trying to wrap your arms around it all and control it is a bad idea. So the big challenge for me when I came on board was understanding how you support ambition, diversity and scale all at the same time.
So, how do you do that?
There are three layers to this:
The base layer, on which all of this is build, is world class physical infrastructure. So here we are in this amazing building – 1.2 million square feet of iconic London skyline, and we’re bringing even the smallest companies into this, which gives them both the prestige to stand shoulder to shoulder with the major global banks as potential clients, but also to come in here and just take a single hot desk, if that’s what they need, pay by the month, but then to scale up. We have 20 million square feet of space in Canary Wharf – you won’t find that anywhere else. We support you with flexible infrastructure all the way – from startup to global enterprise. The next layer is an environment in which diverse talent can thrive. What we’ve got here is a whole bunch of different people operating in different ways. Rather than putting you in the same sausage factory, and end up looking for patterns of familiarity – likely middle-aged, middle-class white men, which tends to be what comes out of accelerator programmes, we have 200 experiments being done by the companies here, each doing things their own way, and we as a company create conditions in which everyone gets to play their best game. The relationships you can build here can shorten your sales cycle – it’s where massive ambition collides.
The top layer is we make all of this addressable for a wider audience. We want to attract not just customers and specialist investors, but also generalist investors, policymakers, regulators, and even consumer media. Everything that happens in this tower falls under one of three categories – it makes our society richer, it makes it safer, or it makes it fairer. There are companies here increasing the productivity of what is already the most productive place in Europe. Many are working to promote financial inclusion, which is something we take for granted, but that 2 million people in the UK don’t have access to, and 1.7 billion worldwide, so there is also an element of social good.
In your experience, what is the best way to get to the decision makers?
Hunt as a pack. You’re referring to a small number of elite individuals with budgetary authority that have the decision making power in a corporate. What we have at Level39 is a constant referral network – for example, the cybersecurity companies here, which we call Cyber39. This is a tag team of organisations constantly building relationships with people and, where appropriate, demonstrating their expertise, not just by trying to sell their own proposition, but by providing intelligent referrals. In other words, if you want the attention of the key decision makers, don’t go in there with a single point solution, saying – ‘look at me!’. Instead, package up a bundle of capabilities which meet their need at scale. And you can do that when you’re part of a community, like Level39.
What are we going to do when Brexit happens? How do you feel about it?
This is an environment of pragmatists. People come here, not to cry into their pints about what might have been if things had happened differently, but to make things better from where they are. So there is a relentless commitment to delivery. Since the referendum vote, membership of Level39 has increased by over 60%. Of course, the Brexit negotiations introduce some uncertainty into pretty much every market, but what is very clear is that there is an undimmed appetite for people from all over the world to come here, to the heart of Canary Wharf, and bring together talent, ambition, capital and technology to build great businesses.
How do you differentiate from Rise? They have the same pitch, listing the same elements. What’s the difference? Is there one?
I’m a big fan of Rise. In some respects, we share some clear insights into ways to help improve things, but I think that an important distinction that we have here is that we are a neutral platform. Level39 is a subsidiary of the Canary Wharf Group – we are a real estate company, which is interested in the health of the whole region. One of the things big corporates do is try to seek control, and when it comes to engaging with startups, it usually causes trouble, because the market is deeply asymmetric. The rate in which a company needs to be able to operationally turn itself around is much faster in a startup than in a big global corporate. That means that even the corporate with the best intentions will probably end up rejecting 95 percent the startups they invite to join them in their space, across the board. It happens not just in financial services, but in all corporate to startup engagement. The reason is similar to Venture Capital investments – most deals don’t work.
What this means is that small companies who are drawn into those kinds of relationships have a sort of dependency. Most of them won’t form a meaningful engaging relationship, and they will then be at a disadvantage when it comes to engaging with other corporates. A healthier approach to the market is for confident fintechs to have multiple options for corporate partners that they can take or leave, which is what we offer here. If you go to an environment that is associated with one corporate, like in the case of Rise and Barclays, there is the expectation both internally and externally that you will be linked to them.
It’s an incredible achievement! You just have to look at the way in which Revolut is shaking up expectations in their development cycle, in their customer engagement, in their marketing – it’s a really impressive organisation, which is drawing attention from right around the world. The idea of the unicorn is incredibly compelling, but what they are doing is actually not that unusual in terms of the input. The result is exceptional in their case, but there are other companies here with a similar sort of approach, who are perhaps a little less in the media eye, but are driving real value and growth, by being a part of this ecosystem. There is huge collaboration here, as well as competition.
Level39 is sometimes described as a peloton in a cycling race – everyone goes faster because they are cycling as a pack.
Are most fintech companies a collaboration between people with a financial services background and tech people?
What you typically find in this community is people who have a real sense of market need – they know what the problems are. We are lucky because, in the buildings around us, we have 120,000 of the world’s smartest people, with the biggest budgets, the greatest global connections, and some massive problems. It’s like a perfect storm. Many fintechs, particularly those started by very young people, offer solutions that may be clever, but aren’t really needed – like better ways to order coffee, or buy a product online. Around here, there are some big, billion-dollar problems to solve.
What does the future look like for Level39?
This is a flourishing environment, but it’s an environment which is hungry for more. Financial services are changing – partly as a result of new technologies, partly as a result of international competition, and partly as a result of regulatory change. So there’s this exceptional opportunity for people who are ambitious to play a part in that change. We want to make sure that this is the best possible place to tackle the world’s most purposeful, valuable problems, not just within Level39, but across the whole of Canary Wharf. Economic clusters drive productivity and we are focusing on making this the most productive environment for any company – whether it’s a startup with 1 or 2 people, a scale-up with 100, or a global enterprise. They complement each other. We have space for thousands of new companies and one massive invitation. That, for me, is the future – it’s one big embrace. Come on it, be wildly ambitious, get amongst it here, don’t hold back.