A look at the state of UK fintech investment — Why should fintech investors continually analyse the team spending their investment?
Through the fintech industry, Gluon builds relationships with founders, CTO’s, angel investors, mentors, and venture capitalists (VC’s) in our work with early stage fintech companies. How is the UK market structured for fintech investment? How do VC’s look assess fintechs?
The UK fintech industry generated £6.6bn revenue in 2015 for the UK economy whilst attracting £524m in investment. London, despite Brexit, is seen as a sophisticated market whose residents have a technological mindset. The availability of capital in London has always been cited as a reason for fintech startups to base themselves in the nation’s capital. Add to this, the regulatory support to fintechs and London’s position as a financial hub and you have a mixture of conditions that creates a supportive ecosystem for fintechs and fintech investment.
However, this is not to say that London does not face its challenges. The aforementioned Brexit is one of the concerns along with access to tech talent. In a report compiled by EY for the UKTI, it is concluded that a fintech startup relies on talent in three key areas: technical talent, financial services (FS) expertise, and entrepreneurial and leadership know-how. The UK has a good supply of entrepreneurial know-how and FS expertise, often combined into individuals that drive companies with a solid mix of both qualities. It remains to be seen how Brexit affects the FS expertise and entrepreneurial / leadership talent currently based in the UK as emerging fintech players look to attract talent.
The current availability of tech talent in the UK is somewhat concerning and has seen many companies look to eastern Europe and further afield to develop products and create IT infrastructure. Gluon’s business model was predicated on this analysis by combining a senior team split between London and the Philippines. This allows Gluon to underpin the emerging lack, and inflated cost, of resources in the UK with talent from abroad without losing quality of delivery.
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