Despite the effect of Covid-19 pandemic on innovations, London’s financial technology (Fintech) industry is gaining more traction than any other region in the European Union (EU). More than £50 billion has been invested since the start of 2019 in the UK’s fintech industry.
The city is now a top EU destination for technology venture capital and this has helped in the widespread of high technology entrepreneurship including establishment of blockchain firms, and crowdfunding has become a more established form of financing.
London is EU’s Fintech hub
London is famous for its convivial landscape and ease with which innovators and entrepreneurs can create new innovations or do business. The friendly environment in the United Kingdom has attracted entrepreneurs and high quality personnel to a region hence forming a reputable circle of new enterprise development, innovation, and economic growth. There are over 50k digital technology employees in London and this shows a booming scene for fintech startups.
Startups plus growth firms including blockchain and fintech companies operating within London attracted funding worth more than $10 bln which makes over a quarter of overall investments within Europe and is about 3 times the level in Paris (France), Berlin (Germany), Stockholm (Sweden), according to the data by Dealroom.
There are over 1,850 fintech enterprises in the UK and this number is projected to double within the next decade. London also harbors more than 85 fintech unicorns - and this number exceeds the total number generated from adding all the unicorns from Paris, Berlin and Amsterdam (Netherlands).
According to the London Calling Report 2021, more than 8,500 United States headquarter businesses have opened up branches in EU’s digital hub. More and more international fintech businesses are flocking to expand their businesses including cryptocurrency exchanges into London.
Top fintech and blockchain startups in the UK 2021
Blockchain technology, an underlying tool behind cryptocurrency such as Bitcoin (BTC), is remodeling everything from payment transactions including cross-border payments, to how funds (ICOs) are raised in the private industry.
Some of the leading 50 of the most promising DLT firms are located in London, and some of these companies include Polkadot that focuses on software development, Vostok Project that focuses on certification, registration plus data tracking, Blockchain.com, an online platform that makes using BTC safe transparent secure and easy.
SETL that focuses on payments, BlockEx which manages the whole lifecycle of DLT-powered cryptoassets, Medicalchain that focuses on decentralized health care, Energi Mine which uses artificial intelligence and DLT to assist purchasers to buy power and calculate power usage data, BABB that focuses on decentralized banking, Pillar Project that focuses on blockchain-powered data storage, Aventus Systems that focuses of blockchain-based ticketing and many others.
Some of the most successful fintech startups in the UK 2021 include Revolut (this has raised over £690m), OakNorth Bank (has fund raised over £637m), Atom (£482m), Monzo (over £444m), iwoca (over £401m), Paymentsense (more than £329m), WorldRemit (over £314mln), SumUp (£317 mln) and many others.
Regulation favoring fintech in London
The UK regulated venture capital (VC) investment plus the private equity (PE) in the country, so the soaring rate of these enterprises is not a surprise. The UK government is implementing the RegTech using automation, blockchain and AI to ensure the fintech companies meet regulatory requirements such as CDD (customer due diligence), AML, and KYC.
The government has been profound to support innovation plus the adoption of decentralized technologies in monetary services with the FCA Innovation Hub and Regulatory Sandbox. The watchdogs in the UK are also formulating a worldwide sandbox under the GFIN.
Fintech has been recognized by the UK administration and other individuals including the Chancellor of Exchequer Rishi Sunak, as a key sector. More than £1.3 billion package has been invested to protect fintech startup firms fueling innovation in the country, plus over £500 mln investment fund for fintech high-growth firms. The trajectory is likely going to continue and the city expects to register more foreign fintech companies and this will revolutionize the composition of the job market in the country.
