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Lessons You Can Learn From the Best Fintech Startups in London

The UK startup market is thriving

The UK startup market is thriving. Despite political uncertainty, 660,000 new businesses registered across the UK in 2018. That’s a 5.7% increase on 2017 – which sets a record high. And the capital is experiencing a similar influx amid an exciting landscape – one that includes office space devoted to startup growth. In London alone, 216,000 new businesses registered in 2018 – equating to a year-on-year growth of 6.45%.

The Fintech boom is driving its fair share of the hype thanks to the UK’s strong Venture Capital (VC) landscape, which has paved the way for new disruptive tech entrants according to research by Barclays. In fact, City AM also reported that VC and private equity investment in British Fintech businesses “rose to an all-time high of $3.3 billion (£2.6 billion), up 18% compared to 2017’s levels”.

It’s true the market has momentum. The list of UK Fintech companies paving the way is plentiful: Transferwise, OakNorth, Monzo, Checkout.com, Funding Circle, Revolut, SumUp, WorldRemit, Starling Bank, Soldo, OpenFin…

But as Neil Patel, London-born entrepreneur and founder of Kissmetrics, points out in his Forbes piece, 90% of startups fail. While that’s a hard fact to stomach, it’s a comfort to learn from everyone else’s failure and success.

To help you scale up, we take a close-up look at three Fintech companies in London, tracking their humble beginnings to their successful funding stories. We ask how they started, who helped fund them and why they are so successful.

By deciding to invest in product and sales we are in effect targeting a larger revenue and profit base, but later on.
Carlo Gualandri
Founder of Soldo

Soldo

Soldo helps businesses across Europe spend smarter with its prepaid card that does your expenses for you.

How did Soldo start? 

Carlo Gualandri had a wealth of experience in building innovative businesses before Soldo, especially in industries waiting to be disrupted. To name a few, he founded Gioco Digitale, Matrix and FinecoBank. 

According to TechCrunch, most companies are using “reimbursable expenses, spreadsheets and manual processes to manage the expense management cycle”. So naturally, Soldo’s main competition is the antiquated and traditional way of managing company expenses. 

Soldo’s funding history

In July 2019, Soldo closed $61 million in Series B funding, bringing the total amount raised to $82 million. The round’s VC backers included Battery Ventures and Dawn Capital, but previous backers like Accel and Connect Ventures also participated. 

According to Soldo’s website, it’s also supported by InReach Ventures, U-Start and Connect Ventures. It’s proud to join portfolios that include Facebook, Spotify, Monzo, Slack and Citymapper.

Why is Soldo so successful?

Investing in product and sales. Soldo’s granular spending controls gives each employee, contractor or spending department the chance to have different expense criteria. All spending is also internally trackable. Plus, it’s easy to integrate Soldo with frequently used company accounting packages like QuickBooks and Xero.

Where is Soldo based?

Soldo’s London office is in Marylebone. Here’s everything you need to know about Marylebone.

Add to this some major heavyweights investing in and backing the business, and you have a potential success on your hands.
Chris Skinner
Author and Commentator

Transferwise

Transferwise is a fast, cheap way to send money abroad for a set fee of 0.5% at the mid-market rate.

The Guardian reported that some banks make 10% of their global profits from international money transfers. That’s why new competitors like Transferwise are eating up market share.

How did Transferwise start? 

It was a simple mistake. When co-founder Kristo Käärmann transferred his £10,000 Christmas bonus from London to Estonia, he paid a £15 fee but then lost an additional £500 because the bank used a poor exchange rate. 

Likewise, his friend (and now co-founder), Taavet Hinrikus, was the first employee at Skype and was struggling to find an economical way to pay for his London bills with his euros.

They wanted to cut banks out of the process.

Transferwise’s funding history

After relying on their savings for a year, the pair were turned down by 15 investors in Europe, so they ventured west and received funding from IA Ventures in New York. Because the company grew so quickly, other investors started catching on – including Richard Branson, who invested in 2014. 

According to crunchbase, it’s had 10 funding rounds in total. In May 2019, Forbes reported that: “With its shiny new $3.5 billion price tag, TransferWise has become the most valuable Fintech firm in Europe.”

Why is Transferwise so successful?

Chris Skinner, one of the most authoritative voices in Fintech says Transferwise’s growth comes down to no hidden fees and a cheap, easy-to-use product. He continued: “Add to this some major heavyweights investing in and backing the business, and you have a potential success on your hands.”

Where is Transferwise based? 

Transferwise’s London office is in Shoreditch. Here’s everything you need to know about Shoreditch. 

 
We fell in love with the strong product-market fit of Wagestream. We very rarely hear such universal positive feedback from all who have tried a product.
Rob Moffat
Partner, Balderton Capital

Wagestream

When around half of employees worry about money at work, Wagestream tackles the anxious world of financial wellbeing. To end the “payday poverty cycle”, the company offers a get-paid-as-you-earn income stream to employees for a flat fee of £1.75.

On the Wagestream website, the service is said to boost staff retention by 40%, job applications by 100% and hours worked by 22% because around half of employees worry about money at work.

How did Wagestream start? 

According to an article in TechCrunch, it was the disaster of the ‘payday loan’ provider Wonga, and an article in the WSJ about every day becoming payday that inspired Wagestream’s founder Peter Briffett to innovate the market. 

Wagestream’s funding history

City AM reported in May 2019 that Wagestream closed a £15 million series A round, co-led by VC investors Northzone and Balderton Capital. 

Including its additional credit facility of up to £25m from Shawbrook Bank, Wagestream has received the “UK’s largest pool of social impact investment”.

Why is Wagestream so successful?

VC backer Balderton Capital praised Wagestream’s product-market fit and positive product feedback. Rob Moffat, Partner, Balderton Capital, explained: "We fell in love with the strong product-market fit of Wagestream. We very rarely hear such universal positive feedback from all who have tried a product".

Where is Wagestream based? 

Wagestream’s London office is in Holborn. Here’s everything you need to know about Holborn.

216,000

new businesses registered in London in 2018, equating to a year-on-year growth of 6.45%

How you can grow your startup

Scaling up has its fair share of challenges – one of which is finding the perfect office space to grow. A collaborative, non-traditional office – commonly known as a coworking space – can improve your chance of survival.

A recent study by The Harvard Business Review (HBR) found that “coworking spaces help new businesses make a positive impression on potential clientele” and “coworking spaces give some members a sense of professionalism and credibility that traditional remote working does not”.

Indeed, the workplace is now considered a token of “legitimacy” – especially for startups. Contributing to the HBR research, a small, WeWork-based businesses owner explained: “I identify with the other startups in the WeWork labs.”

He believed his office space makes his “small company a legitimate one.” What’s more, respondents explained that a WeWork office in a prestigious location offered a sense of “pride and confidence.” In fact, over 50% of respondents viewed the location of their WeWork office as a benefit to their business. 

We take the weight off your shoulders when you’re looking for office space to rent in London – and our service doesn’t cost you a penny. We’ll advise you on your best options, arrange your viewings and get you the best deal.

Amanda Lim

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