London Stock Exchange / TheCityUK Report Highlights UKs Leading Position for Global Expansion of Fintech

The London Stock Exchange and TheCityUK will be releasing a report on Fintech in the UK later today. In advance of the report, the two entities have revealed data points uncovered in the survey. The UK research polled more than 400 Fintech companies in eight different countries (Australia, Germany, Hong Kong, Israel, Singapore, Turkey, UK & USA) and revealed why the UK is a top three market for both raising capital and expanding Fintech services internationally.

According to the report, UK-based Fintechs overwhelmingly see process of raising public market funding as most straightforward compared to peers. This highlights the UKs leading position regarding Fintech innovation. The combination of a supportive regulatory environment and access to capital has fueled sector growth.

The full report will be published at London Stock Exchange Group’s Fintech Investor Forum today and presented at TheCityUK Eurasia Fintech Forum. The UK Fintech Week is ongoing with events taking place across all of London.

Dr. Robert Barnes, Global Head of Primary Markets and CEO Turquoise at the London Stock Exchange, said that cross border ambitions are transforming financial services. But in order to thrive and survive, innovative firms need access to capital and support from regulators. These two items are crucial for success and the UK offers both.

“Today’s report shows that the UK is one of the top three global markets for fintechs considering raising finance and expanding internationally. UK-based fintechs overwhelmingly see the process of raising public market funding as most straightforward compared to peers.”

Marcus Scott, COO of TheCityUK, explained that the UK has positioned itself at the crucible of the Fintech revolution. The UK is one of the best places in the world to start, grow and scale a Fintech company. But Scott cautioned that competition is fierce;

“… it is incumbent on industry, government and regulators to remain agile and work collaboratively to ensure the UK maintains this leadership position into the future.”

John Glen, Economic Secretary to the Treasury and City Minister, shared that Fintech contributes  a whopping £6.6 billion to the economy each year. It also employs more than 60,000 people.

“As this report shows, we’re a global leader in Fintech not by accident, but by design – our outstanding expertise, robust regulation and fair taxation gives us an edge above the rest, and we’re committed to ensuring that it stays this way.”

[clickToTweet tweet=”we’re a global leader in Fintech not by accident, but by design – our outstanding expertise, robust regulation and fair taxation gives us an edge above the rest, and we’re committed to ensuring that it stays this way’ #UK” quote=”we’re a global leader in Fintech not by accident, but by design – our outstanding expertise, robust regulation and fair taxation gives us an edge above the rest, and we’re committed to ensuring that it stays this way’ #UK”]

Key findings from the LSE / TheCityUK research includes:

  • 72% plan to expand into new countries
  • The US (33%), China (30%) and UK (24%) are the top three markets for businesses looking to expand internationally
  • Fintechs have their sights set firmly on significant growth
  • Companies expect to grow revenues by an average of 80% over the next three years
  • Those that have reached Series D funding rounds or above anticipate achieving average growth rates of 320%
  • 46% have long-term plans to build themselves into large privately owned businesses and 33% are aiming to float on a public market
  • 73% believe they will need to move into or develop new market sectors in order to grow; 73% believe they will need to develop new technology to drive at least part of their expected growth
  • Fintechs will continue to raise capital, increasingly through the public markets
  • 35% say that raising finance is their top priority, ahead of R&D (34%), international expansion (31%), and sales and marketing (30%)
  • 85% of Fintech companies surveyed are very or reasonably likely to raise funds on the public markets (equity & debt) within the next three years
  • New York (43%), London (38%) and Hong Kong (32%) are the top three markets where Fintechs would consider issuing equity or debt
  • 35% of US-based companies identify the UK as their main non-domestic market

So what are the hurdles that Fintechs face? Competition (43%) and wider economic confidence (35%) are seen as the largest barriers to growth. Additionally, 66% identify at least one government controlled factor, such as regulation/compliance, access to skilled staff and costs to business, including tax as a barrier to growth
UK-based Fintechs.

UK based Fintech’s see the process of raising capital in the UK as more straight forward than in other countries with fewer barriers. This could be a byproduct of effective online capital formation regulations that has experienced dramatic growth and partnerships with leading VC firms.

[clickToTweet tweet=”UK based #Fintech’s see the process of raising capital in the UK as more straight forward than in other countries with fewer barriers” quote=”UK based #Fintech’s see the process of raising capital in the UK as more straight forward than in other countries with fewer barriers”]

 



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