The UK’s FinTech sector presents various opportunities for “agile and innovative startups,” according to Ron Kalifa, vice chairman of Worldpay – credited with being the UK’s largest IPO last year.
Delivering a keynote speech at today’s Innovate Finance Global Summit, held in London, Kalifa spoke about the UK’s long-history of innovation, whilst noting that UK FinTech was ripe with opportunities for startups.
“There’s an opportunity for smaller players,” he said, noting the regulatory climate was also favourable for innovative firms to prosper in the FinTech scene.
“Think about regulation as a positive thing, not a negative. It serves to create the necessary standards and protocols,” he said.
With regards to payments, Kalifa spoke about customers’ increasing desire to find new ways to make payments, and it is for this reason, he said, firms should consider a strategic approach in this space.
FinTech disruptors: driving innovation
Eileen Burbidge, chair at Tech City UK and partner at Passion Capital, moderated a session which featured, Nick Hungerford, of Nutmeg; Damien Kimmelman, of Duedil: Gonçalo de Vasconcelos, of Syndicate Room; and Wendy Jephson, of Sybenetix.
Burbidge began the proceedings by asking Hungerford why he thought the UK was such an obvious place for FinTech.
Despite having conceived Nutmeg in Silicon Valley and working very hard to make the firm a success over there, Hungerford said he was looking for a country that could provide him and his team with “regulatory inspiration”, similar to what is in place today in the UK.
Hungerford shared his advice with fellow FinTech entrepreneurs, highlighting that the industry tends to enjoy varying degrees of positive reputation.
“FinTech goes up and down in terms of reputation. I feel that this year it’s a bit cooler but we’re lacking a bit of substance.
“I would say don’t worry too much about the cycles of reputation … keep a level head, we’re in this industry to drive real change,” he concluded.
Kimmelman weighed in on the discussion, expressing his belief that the UK is uniquely positioned to be the centre of FinTech, due to the fact it sits between two of the world’s biggest economies – China and the US.
Despite his optimism, Kimmelman spoke about the challenges currently faced by startups in the sector. “Disrupting a market will take a long time,” he added, noting that doing so should only be done by those who are incredibly passionate about their product.
Jephson spoke about the industry’s potential, noting “the opportunity is enormous”.
The rise of private valuations
Christian May, CityAm’s editor, moderated a discussion that featured Mike Sigal, of 500 Startups; Gareth Jones, of FinTech Collective; Nadeem Sheikh, of Anthemis; Jeppe Zink, of Northzone and Reshma Sohoni, of Seedcamp.
Jones spoke about the differences between the UK and the US tech investment scenes, explaining that he believed maturity was key.
“If you think about what’s going on in Silicon Valley, it’s been going on for 40 years,” he said.
Speaking on the topic of valuations, Jones noted that, despite seeing a cooling down period across the sector, he urged startups to consider building relationships with investors early on.
Sigal spoke about the need for entrepreneurs to understand the way in which investors think and for them to also grasp the milestones that have to be met along the growth journey.
Having worked in the sector for the last two decades, Sigal said he had seen one very important change: “It’s much easier to start a company, but much more expensive to scale one.”
Sohoni advised entrepreneurs to raise capital as early as possible if they seek to succeed.
“Capital is the key differentiator,” she said, adding: “The earlier you can raise significant capital, the better positioned you are to survive the next few years.”
When it comes to spending the capital, though, Sohoni noted that funds should be destined to the fundamentals, such as building a team and ensuring the business evolves into a multi-product global brand.
“If they are going to be here in the next 20 years, all startups will have to take a multi-product approach,” she said.
For now though, Sohoni added it is important to take into account the uncertainty posed by a possible Brexit.
“It is London’s year, definitely, but Brexit is a big question mark. It will have an impact,” she concluded.