FinTech

Eileen Burbidge: Three reasons FinTech in London has conquered Silicon Valley

By Oliver Smith 15 September 2015
Eileen Burbidge FinTech Week photo from Matteo Giachetti Photography
Eileen Burbidge speaking at London FinTech Week, photo from Matteo Giachetti Photography.
Summary

One of London's most prominent investors in financial technology (FinTech) believes Britain has a unique advantage over the US and Europe.

London is trouncing not just Silicon Valley in the US, but the rest of the world, when it comes to our stronghold on creating and developing financial technology (FinTech).

In the last five years the capital has led Europe by the amount of cash invested in its small digital businesses building the software and services that will define the future of finance.

As we reported yesterday, $5.4bn has been invested in businesses like TransferWise and Funding Circle, more than the total amount invested across the whole rest of Europe.

But why is London so dominant in this sector? Yesterday prominent venture capital investor, partner at Passion Capital and the Government’s special envoy for FinTech, Eileen Burbidge, explained why.

Beating the Valley

“London and the UK will lead the Fintech sector,” Burbidge told attendees during a speech at the start of London FinTech Week yesterday.

As well as London’s positioning, spanning both US and Asian time zones which has historically made the City a key location to make international transactions, Burbidge said we benefit from a unique blend of talent.

“London and the UK will lead this FinTech cycle. I genuinely believe it can’t be Silicon Valley,” she said.

“If you look at the history, Silicon Valley has produced a few [FinTech companies] like PayPal, Stripe and Intuit, but that pales in comparison to the number of FinTech companies being founded in London.”

“I’d be more concerned if you had Wall Street talent combining with Silicon Valley, but you simply don’t.”

“We don’t just have our own Wall Street and Silicon Valley in London, we also have the skills and combination of Washington DC here,” added Burbidge, saying that the UK Government’s focus on FinTech is making Britain the most attractive country in the world for building a FinTech business.

“Here we have roundtables, we have an envoy [Burbidge] who’s actually within the investment community talking to startups and also talking to Number 10 and 11. In the United States you really don’t have people from Silicon Valley talking to DC, or to Wall Street.”

“We have that happening organically in London, and in smaller cities like Leeds and Edinburgh where great teams are building up as well.”

“This is something that is unique to this country and it’s why, even as a Silicon Valley export myself, this is where FinTech will be led.”

The future of FinTech?

So we know why Burbidge is backing London for the FinTech capital of the world, with its financial, political and tech chops, but what’s next for the sector?

“The first wave of disruption to financial services came in the form of lending, payments and remittance, so that’s your Funding Circle, TransferWise and MarketInvoice,” she said.

“But the next wave we’re starting to see is disruption of the backend of financial services, like challenger banks with full-stack software decoupled entirely [companies like mobile bank Mondo which are building brand new banking software and systems separate from legacy banking software].”

Building these entirely new financial services for the digital world, ditching legacy systems, is the next big trend according to Burbidge, and one London is uniquely positioned to exploit.

As her top investment picks Burbidge pointed to online investment firm Nutmeg, fraud detection group Ravelin, international money transfer company Azimo and crowdfunder Funding Circle.


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