WHY

LONDONFOR FINTECH

CONTENTS

Definition of FinTech 4

Strong FinTech hub 6

Availability of customers and investors 18

Talented workforce 24

The city for business 32

Incentives and support 34

How we can help 39

2

EXECUTIVE SUMMARY

3

Strong FinTech Hub

FinTech is strong in Britain, in 2013 the sector

grew by 91% to almost £1bn and further increases

are anticipated for 2014. Growth is supported by

the presence of global technology and financial

services hubs in London as well as being home to

globally renowned FinTech companies. London is

thought to be the FinTech capital of Europe

Talented workforce

London is a powerhouse for FinTech talent, there are

estimated to be more FinTech workers working in

London than its main rival New York. According to

Accenture nearly 40% of the London workforce

worked in the financial services and technology

sectors in 2013

The city for business

London is an attractive business environment,

substantiated by its position at number one in

the PWC City of Opportunity Index. London’s

working hours, location, flexible employment

law and low cost legal structures make it one

of the easiest cities in Europe to do business

Incentives and support

London offers specific tax breaks for

technology businesses through R&D tax

credits and the patent box scheme

Availability of customers and investors

Together UK and Ireland accounted for more than half

of European FinTech deals in 2013, the vast majority

taking place in London. In addition to financial support

London has three globally celebrated FinTech

accelerators providing support and guidance to

businesses. The UK consumers provides the perfect

test bed for products due to their high adoption of

financial innovation

4

FinTech is technology that engages with or delivers financial

services1

UK FINTECH MARKET IS SPLIT INTO FOUR KEY

SUBSECTORS

5

Payments (total value c. £10bn): infrastructure £8.1bn;

online £1.9bn

Software (total value c. £4.2bn): software to financial

services £4.0bn; accounting £0.2bn

Financial data &

analytics (total value c. £3.8bn):

credit reference £1.0bn; capital

markets £2.2bn; insurance £0.6bn

Platforms(Total value c.

£2.0bn): peer to peer <£50mn; trading £0.8bn; personal wealth £0.7bn;

aggregators £0.5bn

STRONG FINTECH HUB

7

Britain’s FinTech sector is growing

fast, it is estimated to have

expanded by 91% in 2013 to almost

£1bn and in 2014 it is expected to

be worth £1.6bn1

We decided early on that London was the right fit for us. The UK is

one of the largest markets in Europe, but more than anything, a

hub for start-ups and entrepreneurs. We wanted to be part of the

booming tech scene allowing us to be close to our customers and

support them in person as best as we could. London is also an

easy travel hub both for Europe and the US so we can quickly visit

key markets across Europe and visit our teams in the US.

Braintree

THE GROWTH OF FINTECH HAS BEEN

HELPED BY THE PROXIMITY & STRENGTH

OF COMPLEMENTARY SECTORS IN LONDON

9

FinTech

London is a leading financial

centre

Every major bank and financial

institution in the world has a

presence in London3. London is

home to 4 of the 10 largest banks

in the world4

London is the home of

European Headquarters

The capital has attracted three

times more European

headquarters than any other

European city since 20035.

London has a strong

technology cluster

London’s established digital tech

cluster continues to grow with an

anticipated annual increase of

5.1% for the next 10 years2

London has a large creative

talent pool

London’s creative industries in

2013 employed 518,000 people1

The best FinTech businesses are coming out of London. It's where

job and wealth creation is going to come from. The U.S. can be a

very innovative place, but when it comes to FinTech, regulation

stifles innovation.

Jeff Lynn, co-founder and CEO at equity crowdfunding

platform Seedrs

LONDON IS A WORLD LEADING FINANCIAL

CENTRE

11

The UK is the second-largest

asset management centre in the

world after the USA, accounting

for 36% of European assets

under management3

In trading related activity, and in

particular foreign exchange and over

the counter derivatives3. 60% of the

UK total FX turnover in April 2013

was in London4

In insurance, accounting for 7% of

worldwide premiums, and with

particular strengths in specialty

insurance3

In banking and cross-boarder lending3No.1

No.1

No.1

London has 251 foreign banks, 588 foreign

quoted companies1. The UK is number one

across several key financial sectors:

Financial institutions in

London are pro innovative

technologies to enhance the

customer experience.

According to Frost and

Sullivan, financial

institutions in the UK spent

€9bn on ICT in 2011 and the

market is expected to grow

to approximately €10bn by

20162

12

LONDON HAS THE HIGHEST CONCENTRATION OF GLOBAL FINANCIAL INSTITUTIONS1

A leading commercial

centre with a reputation

for management

innovation

One of Europe’s most

advantageous

employment regimes

A city of diverse talent

in an environment

which offers a unique

lifestyle

The ease of setting up

and doing business

here

A capital offering global

connectivity and

exceptional value

13

LONDON HAS BEEN THE PLACE FOR START-

UPS TO GROW INTO A GLOBAL BRAND

Barclays launched its new mobile payment service Pingit, which allows customers to send and

receive money person to person using their mobile phone numbers. In the same month, it became

the most popular financial app in Apple’s UK App store, and during the next 100 days, customers

used it to send nearly £10 million. When Barclays announced its full year results for 2013, it noted

that the number of customers now using Pingit had doubled to more than one million1

Misys is a multinational software company, based in London. It specialises in software for

banking, capital markets, lending, enterprise risk and investment management. Founded in

1979, Misys now has 4,500 employees, and more than 2,000 customers across 130

countries2

Markit is a leading provider of financial information services, providing products that enhance

transparency, reduce risk and improve operational efficiency – for example through independent

data, trade processing of derivatives, foreign exchange and loans, customised technology

platforms and managed services. Its customers include banks, hedge funds, asset managers,

central banks, regulators, auditors, fund administrators and insurance companies. Founded in

2003, Markit now employs over 3,000 people in ten countries. In 2012 the company had annual

revenues of US$860 million, and it raised US$1.28 billion in an initial public offering in 20142

14

London based Monitise plc is a technology and services company that has grown in just over a

decade, to become a world-leader in mobile money – banking, buying and making payments with

a mobile device. Monitise provides services to more than 350 financial institutions and leading

brands globally, with 28 million users, and it processes 3.4 billion mobile transactions annually, to

the value of US$71 billion. Now with 750 employees, Monitise had a market capitalisation of £55.9

million when it was listed in 2007. The UK has been one of the fastest adopters of peer-to-peer

lending, to the value of £843m in 20131

MarketInvoice has developed an award-winning online marketplace, allowing

companies to sell outstanding invoices, confidentially, to raise working capital.

Launched in 2011, the platform allows small and medium-sized businesses who have

outstanding invoices to large corporates to trade these with institutional investors,

online. By November 2013, the company was trading £10 million of invoices a month.

In August 2013, MarketInvoice was awarded £5 million in UK Government funding to

lend to small businesses, through the Business Finance Partnership – a scheme to

boost finance through non-bank lenders1

TransferWise is a peer-to-peer currency exchange service that enables low-cost transactions

between individuals. As co-founder Taavet Hinrikus notes “with London being a financial centre it

helps when you are dealing with financial technology as we are and we are also close to a lot of

the people that we have partnered up with. Since 2011, TransferWise has grown from 2 people to

over 50 employees today. They recently announced a $25 million funding round, backed by Peter

Thiel’s Valar Ventures, Index Ventures and Richard Branson, among others, bringing the total

investment in the firm to $33 million. It has reportedly facilitated over £1 billion worth of currency

transactions and claims to have saved its customers over £45 million in transaction fees1

LONDON HAS BEEN THE PLACE FOR START-

UPS TO GROW INTO A GLOBAL BRAND (2)

The number of digital technology

businesses is expected to increase to

over 45,000 by 2024, growth of 2.7% per

annum1

LONDON’S DIGITAL TECH SECTOR IS

GROWING FAST

London’s digital tech sector is

anticipated to grow rapidly over the next

10 years by an average of 5.1% pa

creating an additional £12 billion of

economic activity over the next 10 years1

15

The UK’s domestic internet

industry alone creates 8.3% of

the UK’s GDP, according to

Cobalt, compared to 4.7% in

the US and 3.8% on average

across the EU

FINTECH COMPANIES HAVE CLUSTERED

AROUND THREE KEY AREAS IN LONDON

16

Canary Wharf

Tech City & Silicon

RoundaboutThe City of

London

These three areas have historic ties with either technology or finance and their

close proximity to each other makes this area an attractive base for FinTech

companies

LONDON HOSTS MAJOR EVENTS & MEET

UPS FOR THE GLOBAL FINTECH INDUSTRY

17

FinTech City

The team behind the

FinTech50 organise

events for European

FinTech companies to

engage with funders,

investors, buyers and

acquirers

Finovate Europe

On February 10 & 11,

2015, Finovate returns to

London with

FinovateEurope, a two-

day showcase of the

latest and greatest

financial and banking

technology innovations

from leading established

companies and hot young

start-ups

New Finance

The Leading Global

Financial Technology

(FinTech) Innovation

Network is a global

network of over 2500

professionals actively

involved in Financial

Innovation through

Technology who regularly

meet up in London

Innovate Finance Global

Summit 2015

The inaugural Innovate

Finance Global Summit

2015 on the March 9th will

bring the biggest

influencers in finance and

government together with

the greatest social

visionaries, educators

and innovators to discuss

the ways we can create a

more substantial financial

services sector that offers

better services and better

choices for everyone

AVAILABILITY OF

CUSTOMERS & INVESTORS

FINTECH INVESTMENT IS STRONG IN

LONDON, THE LARGEST IN EUROPE

19

Despite having a population that is one

fifth the size of the US, investment in UK

FinTech is half that of the US, which

means that the UK, and London in

particular are really strong in the global

FinTech innovation arena1

In 2013, UK and Ireland together

accounted for more than half of

Europe’s FinTech deals (53%) and

more than two-thirds of its total

financing (69%, or $265 million)

Together, the volume of FinTech

deals triple since 2011. The

amount of capital they attracted

in that time grew 51% annually –

compared to 39% in the rest of

Europe – with the vast majority of

activity taking place in London1

WorldRemit, a London-based start-up

aimed at the consumer money

wiring/remittance market got $40 million

investment from Accel Partners (which

has backed Supercell and Facebook)2

20

FINTECH COMPANIES ARE SUPPORTED BY THREE BIG LONDON FINTECH ACCELERATORS

London specific entrants to

2014 programme (5 out of

the 11 selected):

Entrants to 2014

programme:

A selection of FinTech

Innovation Lab London

participants:

LEVEL39 SUCCESSES

21

Thomas Gatten, CEO of Growth Intelligence said: “Growth Intelligence has doubled in size

since moving into Level39 in earlier this year.”

Francesco Fumagalli, CEO Crowdrooster said: “Crowdrooster’s workforce has doubled in the

three months since moving into Level39, and we forecast that it will triple in the next three.

Level39 has been a key factor for achieving our goals, thanks to their care and understanding

of start-ups and moving into the high growth space is a great opportunity.”

Pirean were the first company to graduate from Level 39 to become a tenant at Canary Wharf.

They converted from member to tenant before Level39’s first anniversary:

“Canary Wharf Group enabled us to grow our London presence from scratch, providing the

flexibility and support that we needed during a period of rapid growth and expansion. Level39

provided an excellent environment for creativity and collaboration – and it’s an important part

of the infrastructure that we are looking forward to benefiting from as tenants of Canary

Wharf.”

The participants in the first London Lab: BehavioSec; Calltrunk; Digital Shadows;

Growth Intelligence; Kiboo; Open Bank Project and Waratek; have already achieved

notable successes. The majority have gone on to sign deals with banks since

completing the programme. Nine months after completing the Lab, participants

reported average revenue growth of 140%, staff increases of 40% and

approximately $10 million in new financing1

22

PAYPAL AND SANTANDER HAVE INITIATIVES FINTECH BUSINESSES IN LONDON CAN TAKE ADVANTAGE OF

Santander has launched a $100m

FinTech fund (July 2014). The fund

will be London-based but will have

global remit. FinTech firms struggling

to get funding could now look towards

Santander as a possible investor

British start-ups are being given the

opportunity to work out of PayPal’s

London offices for six months. Start Tank

London, which follows the first Start Tank

programme in Boston, will select up to

five of UK start-ups to be housed for

free. They will have access to mentors

through PayPal and Braintree, the

mobile payments companies

THE UK CONSUMER IS MORE OPEN TO

FINANCIAL INNOVATION

23

Per capita UK consumers spent

in 2012 £1,175 on e-commerce

compared to £374 in Germany

and £539 in France1, the largest

spend per capita online globally

second only to the US in terms

of volume of sales

In 2012 30% of the population in

the UK obtained car insurance

through aggregators, compared

to 22% in Germany and 11% in

France1

The UK has been one of the

fastest adopters of Peer-to-peer

lending with gross advances

almost doubling every year

since 20101

TALENTED WORKFORCE

25

London has an abundance of financial

services and technology talent - in 2013

financial services and technology sectors

made up nearly 40% percent of the London

workforce1

26

London is the centre for FinTech

talent with an estimated 44,000

FinTech workers within 25 miles of

London, compared to 43,000 for

New York and only 11,000 for San

Francisco Silicon Valley1

London is a magnet for FinTech

innovators with 30 people in the 40

European Innovators Shaping the

Future of Finance based here in

London1.

2828

The number of people employed in digital

technology in London is anticipated to

continue growing with an estimated 46,000

net jobs by 20242

29

LONDON DRAWS IN THE BEST DOMESTIC

AND INTERNATIONAL TALENT

With 37% of London’s workforce

born abroad3, conducting business

internationally is easier with 233

languages spoken in the city4

The global marketplace is extremely

important and the government has

recognised this through their

Exceptional Talent Visa for those in

digital technology and the arts

London was #1 as a preferred

relocation destination for

professionals1

London is also the most popular city

in the world to consider working

abroad according to Boston

Consulting Group2

30

London has 5 of the world’s top 100

prestigious institutions. Three of

whom have centres of excellence in

ICT1. International students make up

26% of all students studying in

London

LONDON UNIVERSITIES PROVIDE A STEADY

STREAM OF NEW TALENT

In 2012/13 approximately 54,875

students were studying business

and administration in London

universities and about a further

39,680 students were studying

computer science, engineering and

technology1

There were around 23,015 students

graduating from business and

administration courses in London

universities in 2012/2013 and

approximately 13,175 in computer

science, engineering and

technology1

THE CITY FOR BUSINESS

33

London is ranked number one

overall in the PWC’s City of

Opportunity Index1

Flexible employment law and low-

cost legal structures, entrepreneurs’

visas and capital gains tax relief

make London one of the easiest city

in Europe in which to do business

London serves 344 destinations

around the world through its

network of 6 airports

London’s office hours overlap

with those countries that

collectively account for 99% of

the world’s GDP

LONDON IS AN ATTRACTIVE BUSINESS

ENVIRONMENT

INCENTIVES AND SUPPORT

Creative Industries Tax Relief is

available for those organisations

specialising in animation, film, high-end

television programmes, video games3 and

theatre productions4

THE GOVERNMENT HAS SPECIFIC TAX SCHEMES FOR INTELLECTUAL PROPERTY, R&D WORK AND THOSE BUSINESSES WITHIN THE CREATIVE INDUSTRIES

The Patent Box enables companies to

apply a lower rate of Corporation Tax to

profits earned after 1 April 2013 from its

patented inventions. The relief will be

phased yearly and the lower rate of

Corporation Tax to be applied will be

10%.2

R&D Tax Credits for companies carrying

out research or development work in

technology are entitled to tax credits, paid

as a cash sum. Loss-making companies can

exchange tax losses attributable to R&D

relief for a payable tax credit at a rate of

11%1

35

Corporation Tax in the UK was reduced

to 21% in 2014, it will go down to 20% by

April 20154. This Corporation Tax

reduction makes the UK’s tax rate lower

than Germany and the US

SPECIFIC TAX INCENTIVES FOR ENTREPRENEURS AND EARLY STAGE COMPANIES ARE AVAILABLE IN LONDON

Entrepreneurs’ Relief reduces the

amount of Capital Gains tax on disposal

of qualifying business assets, allowing

investors to realise more capital on their

investment in start-ups and small

companies

The government has introduced a Start-up Loan

Scheme offering loans to over £110 million over the next

three years. The age limit for application has been

extended from 24 to 30 years old3

EMI Options allows start up and growing

companies to grant tax favoured share

options to employees2

Seed Enterprise Investment Scheme (SEIS) is the most

generous early-stage tax break in the world, providing 50%

tax relief for the first £100,000 seed investment highlighting

the commitment the government has to fledgling

businesses1

36

Examples of the

FinTech companies

in Tech City

37

FinTech companies

who pitched to the

government

FinTech companies

from the 2013

programme

FINTECH IS ALSO SUPPORTED BY A

NUMBER OF GOVERNMENT BACK SCHEMES

LONDON IS HOME TO ORGANISATIONS WHICH SUPPORT AND OR REGULATE THE FINANCE INDUSTRY

Innovate Finance is an

industry organisation that

will accelerate the UK's

leading position in the

global financial services

sector, by directly

supporting the next era of

technology-led financial

services innovators,

whether they be a young

start-up or an established

industry player

Tech London

Advocates is a private

sector led coalition of

expert individuals from

the tech sector and

broader community who

have committed to

championing London’s

potential as a world-class

hub for tech and digital

businesses and to

support its start-ups in

finding new investment,

new talent and achieving

high-growth

Financial Conduct

Authority regulate

financial firms and

financial advisers so

that markets and

financial systems

remain sound, stable

and resilient

The Prudential

Regulation Authority

(PRA) is responsible for

the prudential regulation

and supervision of banks,

building societies, credit

unions, insurers and

major investment firms. In

total the PRA regulates

around 1,700 financial

firms

HOW WE CAN HELP

HOW LONDON & PARTNERS CAN HELP

41

COMPANIES

WE HAVE

HELPED

YOUR

BRAND

HERE

42

How London & Partners helped

• Introduction to lawyers

• iZettle participated in the Tech Wave for the Games Time Hosting Programme

• L&P also introduced them to city stakeholders such as the City of London Corporation and London Chamber of

Commerce

• Conducted a property search for them for a permanent office space

• L&P helped with their office move and fit out

• Introduced them to Ravensbourne College to get access to interns

• L&P also introduced them to recruiters for sales staff and assisted with PR for the launch of their UK product

How London & Partners helped

• Introduction to FSA

• Advised on the essentials of setting up in London

• Introduction to Central Working

• Helped with immigration, introducing to Doyle Clayton

• Introduction to recruitment partner, number of potential jobs to fill in London.

• Introductions to clients and Networking Events and Level 39 where they had their first ever London event

• Gave information on R&D tax credits/patent box

• Introduction to Wingrave Yeats who advised on FSA requirements

• Introduction to residential property partners

CASE STUDIES OF COMPANIES WE HAVE

HELPED

Dhaval Gore

+44 (0)7917372969

dgore@londonandpartners.com

Invest.london

CONTACT