London's top 20 Fin-Tech start-ups
As one of the world’s biggest finance centres, is it any wonder we have a booming start-up ecosystem supporting it and shaking it up?
London’s tech start-up scene is pretty sexy.
It’s clustered around the hippest part of town. It’s populated by throngs of young, good looking, be-spectacled charmsters and many of its CEOs are treated with the reverence of rock stars. Not mentioning any names…ahem Michael Acton Smith.
But not all of the Shoreditch start-ups get the same traction in the media. The colourful, consumer-facing brands get all of the air time. It’s all Moshi Monsters, Moo.com and Songkick. And there ain’t nothing wrong with that, they are fantastic companies, pushing boundaries and banging the drum for Silicon Roundabout.
There is however, a stream of start-ups that don’t get the attention they perhaps deserve. Finance technology or Fin-Tech is huge in London. According to a study by IC Dowson & William Garrity Associates Ltd and London New Finance, a whopping $1.92bn in cumulative investment has been ploughed into the industry to date.
It’s easy to see why; we have a world class financial sector which requires the disruption and innovation provided by the scrappy start-ups to stay ahead of the game. Their products are largely B2B and so media attention, nay, adoration isn’t always as forthcoming.
With that in mind we have decided to give a little should out to some of the finest in Fin-Tech.
Here’s our top twenty:
This peer-to-peer platform allows people to transfer money abroad at a lower cost than is traditionally offered by the banks. The system works by making sure there are people to want to swap euros for pounds, at the same time as someone wants to transfer pounds from the UK. Very clever.
Founders Taavet Hinrikus (first employee at Skype) and Kristo Kaarmann (Deloitte and PWC) came up with the idea out of frustration at the amount they were paying sending money back to their native Estonia.
It has had $1m investment from a group of savvy investors including IA Ventures and Index Ventures and recently partnered with start-up peer The Currency Cloud to add more currencies to its roster.
Paul Aitken founded Borro in 2008 to become the world’s first online asset lender. It offers short-term loans of £1,000 to £1m which it secures against personal assets including jewellery, fine art, classic cars etc.
Having made its first £1m loan last year to an antiques dealer, the company expects a turnover of £10m for this year.
Founded in 2010 Crowdcube sees itself as the next generation of business investment. The platform allows entrepreneurs to pitch for investment from the public. By getting a group of smaller investments from Joe Public, start-ups can by-pass the somewhat painful traditional ways of raising finance.
This time last year the company helped to raise a whopping £1m for bar group, Rushmore.
4. The Currency Cloud
Dissatisfied with the international payment services offered by our friendly neighbourhood banks, The Currency Cloud founders set out to solve the problem of cross-border payments for small businesses by creating a system that is transparent and cost effective.
It deals in 140 currencies in 200 countries. This year The Currency Cloud has partnered with Transferwise and secured a £2m round of funding to help it expand globally.
It’s a business journalist’s dream. A free-to-access, database of company information that is damn easy to navigate. Duedil (a play on due diligence) aggregates information from various sources such as Companies House and credit ratings.
The team has tripled in size over the twelve months and received investment from heavy hitters such as Passion Capital, Sherry Coutu and Wonga’s Jonty Hurwitz. Seventy five of the FTSE 100 companies use the service.
Although free to use at the moment it will be unveiling premium services soon and operate a freemium model.
Interbank transfers. They’re a cheaper and more convenient way to pay bills but often they are only available when paying bills from big companies. GoCardless is a Y Combinator-backed start-up allowing small merchants to set up interbank transfers for customers.
GoCardless has $1.5 million in funding from Accel Partners, Passion Capital, SV Angel, Start Fund, and Y Combinator. Over 70% of its current customers are using it for B2B payments.
Nutmeg is an online investment manager that makes investments for you based on your aims and the level of risk you are willing to take. You can monitor your investments at any time, withdraw or top up whenever you like. You can put in as little as £100 per month or £1,000 for the year.
The start-up launched the platform in beta mode in May of this year and has had £3.4m investment to date.
The internet has made it increasingly difficult for content creators to monetise their products – be it blogs, music, photography or film. Flattr has set out to address this by creating a platform where content lovers can give a little to the creators.
Users decide how much they would like to give each month. As they surf the net, if they find something they want to donate to and there is a Flattr button next to it – they simply press it. At the end of the month their initial donation is divvied-up between all of the people whose Flattr buttons they pushed.
MarketInvoice turns outstanding invoices into cash for UK-based SMEs. It is the first company of its kind in Europe and acts as an auction house for invoices. It hopes to solve cash flow problems that many smaller companies face.
Institutional investors bid for the invoices, like eBay for outstanding bills. Medium-sized companies set up a payment platforms for their small suppliers to get paid within five days in return for a discount of between 3% and 5% on invoice value.
Founder Tom Higgins spotted a gap in the market to enhance the FX trading process for retail brokers. Gold-i now develops products which give retail brokers the same execution and risk management tools as institutional brokers at a fraction of the cost.
Its flagship product, Gold-i Gate Bridge connects brokers’ trading systems to global banks. Each transaction through this platform generates revenue for the start-up which is on course to turnover £1.5m this year. Its revenues have been increasing 100% year-on-year since launch.
Tradable, the world’s first open trading platform, will allow traders to create a completely bespoke, online platform so they can work in a way that best suits them.
The platform has only just launched but is already getting attention, winning “most innovative financial company” in the Forex Magnates summit on the day of the launch. According to CEO Jannik Malling the company is already looking at global expansion.
Enterprise social media has really exploded this year with “techsters” shouting about supposed increased collaboration, efficiency and innovation which comes with using social tools in the workplace.
James Fabricant (formerly of MySpace) has created a safe, social media platform for financial services professions – specially designed for highly regulated industries.
It may sound like a mouthful but Iwoca stands for instant working capital.
It has jumped on the speedy, online-retailing bandwagon and offers loans to online businesses. Online sellers are expected to be generating £20bn in the next five years, these online retailers often need access to capital before they get their invoices paid. Iwoca is there to help them. It asses the risk of lending based on quality of customer feedback, social media presence and credit history.
Typical loan lengths are for three months.
MoBank Group creates and operates transactional systems for mobile commerce, banking and payments. MoBank is an app which allows you to manage all of your accounts from your smartphone. You can check your balance, your transaction history and set up spending alerts.
You might gather from the name, this is a wine trading platform which allows you to buy and sell fine wines directly with other investors – cutting out the brokers. Fees are £50 per trade as opposed to an average of 10-20% charged by traditional wine brokers.
The founders were frustrated with the existing online wine investment services and set it up as an easy-to-use, transparent service.
Providers of P2P lending, Zopa brings people together to lend and borrow money. The platform gives better rates for both lenders and borrowers and tends to be more efficient than lending from banks.
It claims to be the first lending and borrowing marketplace.
Gekko Global Markets is a dedicated service provider of spread betting and CFDs.
Gekko has set out to empower its clients by providing the most innovative, transparent, cost-efficient and intuitive execution of financial products in the market place. The interface – TradeHub is designed to be easy to use and customisable.
Fixnetix provides outsourced services for ultra-low latency trading. In June 2011 its iX-eCute Field Programmable Gate Array microchip for ultra-low latency trading became the world’s fastest trading appliance for the financial markets.
The company was founded in London during 2006. The three co-founders come from investment banking, technology and prime brokerage.
Retail financial services expert ChilliMint is a consultancy which aims to help retail clients transform banking and card payments.
FundApps as you may gather works with the fund industry.
It provides cloud-based compliance and risk monitoring to various fund management companies. Based in the Silicon Roundabout mothership TechHub, the company was founded in 2010. It aims to create intuitive software which doesn’t require hefty installation processes.
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