QuickView #1 - FinTech

FinTechSonovate QuickView Series #1

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The Situation

As the digital revolution drives change through global industries, the UK has positioned itself as a hub for some of the world’s most innovative and exciting tech companies to operate in. In 2014, companies operating in the UK tech sector received a record £1.4bn in venture capital funding.The significance of the investment is reflected in the growth of startups, their contribution to the economy and their impact on the jobs market. In 2014 over 8,500 startups operated across the UK in thriving tech clusters. With particular emphasis on FinTech and ecommerce, the sector is driving serious growth, contributing around £72bn to the UK economy (5% of the UK total).

With continued investment pouring into the UK, a government led policy to make London the ‘tech capital of the world’ and evidence of blossoming tech hubs in Sheffield, Leeds and Manchester, the tech sector is one of the hottest markets for recruiters to operate in.

£1.4bn UK Tech Sector Venture Capital Funding

£72bn

Total UKEconomy

Tech Sector Contributionto UK Economy

5%

261

333

253

504

161351

413522

433

38491283

261

UK Startups


£1.4bn FinTechA contraction of ‘financial’ and ‘technology’ FinTech is the term used for any technology applied to financial services; encompassing payments and transactions, trading, peer to peer lending, crowdfunding, retail banking, digital and alternative currencies and financial advisory services.

The UK’s FinTech market is currently worth £20bn in annual revenue and the inaugural companies from the government-backed Future Fifty scheme together generated around £2.1bn in revenue in 2014, with an average growth of over 60 per cent. The four firms which listed on the London stock market have a combined value of £3.7bn.

FinTech RevolutionThe global financial crisis is credited in large part with the development of FinTech. Public distrust with the ‘establishment’ coupled with growth in consumer take-up of online transactions provided an excellent platform for FinTechs to leverage the power of the internet to provide faster, cheaper and more innovative solutions.

London CallingIn a city where one of the world’s largest financial centres is a stones throw away from a thriving startup technology community, London has the ideal conditions for fintech innovation.

Rivalling New York in terms of professionals employed and global influence, London’s booming FinTech sector went from strength to strength in 2014, receiving a record £342.6m venture capital investments and triple the amount raised in 2013.

In 2014, companies operatingin the UK tech sectorreceived a record £1.4bn inventure capital funding.As the digital revolutiondrives change throughglobal industries, the UK haspositioned itself as a hub forsome of the world’s mostinnovative and exciting techcompanies to operate in.

WORKERSPER CITY London: 44,000New York: 42,000San Francisco: 11,000

£20bn UK FinTech MarketAnnual Revenue

London FinTechVenture CapitalInvestments

2013

2014

£343M

£114M


Payments

Largest micro sector

Dominated by well established and large players such as Transferwise, GoCardless, Pingit, Braintree and Square

Based on the level of innovation and scale it is broadly spilt into infrastructure and online segments

Size: £10bn (£8.1bn Infrastructure, £1.9bn Online)

Financial and data analytics

Businesses in this microsector collect a diverse range of financial data on individuals, corporates and particular market activities (e.g. trading)

Grouped based on type of data into:

Credit reference £1bn Capital markets £2.2bn Insurance and data analytics £0.6bn

Financial Software

Microsector dominated by large international tech companies and are mostly headquartered outside the UK

Offer a range of solutions to financial institutions including:

Risk management Payments software Core banking, insurance, asset management and capital market software

Accounting software Size: £4.2bn

Platforms

Microsector varies significantly depending on the market segment and includes:

Peer-to-peer platforms Trading platforms Personal wealth platforms Aggregators

Size: £2bn

Immediate FutureAccording to research group CB Insights for London & Partners, UK tech companies attracted £1.4bn in venture capital funding, (£0.9bn into London companies) over the last 12 months. This is twice as high as last year and 20 times higher than in 2010. The huge increase reflects a shifting sentiment among investors, who are now choosing to spread their technology investments beyond Silicon Valley.

With the increasing shift towards digitalisation of major services in finance and across the wider economy the rise of fintech has opened up a world of possibilities. Businesses can offer more services than ever and for a fraction of the price of what it would have cost before. Driven by the UK government to make London the global fintech centre and with evidence of blossoming tech hubs in Sheffield, Leeds and Manchester, the tech sector offers great opportunities for recruitment businesses to play a pivotal role in the growth.

Sizing the UK FinTech MarketIn 2014, the UK Fintech sector generated £20bn in revenue annually. Broken down into four microsectors, this is the key information you need to know.


FinTech Funding Growth

Startups will map out hires as they move through the financing stages. Typically, as shown in the graphic, there is a startup phase - typically self-funded and then rounds of financing, leading to an IPO or sale of the business. Recruiters should seek to network with the startups at an early stage, so they understand the business plan and are in prime position to support their hiring during phases of growth. Maintaining close ties will enable the recruiter to resource skilled professionals to join the startup when funding is achieved.

Networking FinTech Businesses

Some of the best networking events to check out include:

FinTech 50 2015

Startupbootcamp FinTech London Accelerator

FinTech Week

Finovate Europe

The Reference Shelf

London: Digital City on The RiseTelegraph - UK High Growth Companies Increase by 30pcTechcityUKBanking ExchangeFuture FiftyAdzunaCity AMEY Foundation - Landscaping UK FinTech

Startup Financing Cycle

Reve

nue

Time

Jobs Growth

Startup IPO

Angels,FFF SeedCapital

VCs, Aqusitions & Mergers& Strategic Alliances

Revenue Growth

IT

CTOIT DirectorTechnical AnalystDeveloper (Java, Golang, LAMP, Javascript, Python) Front-End DeveloperSenior JavaScript Engineer

Finance

Finance DirectorFinance ManagerOperations Manager

Sales

Account ManagerBusiness Development ManagerSales ExecutiveBusiness Analyst

Marketing

CMOMarketing DirectorMarketing ManagerContent Marketing ManagerDirect MarketingDigital Marketing Manager PR ManagerPress Officer

IT41%

Sales27%

PR, Advertising and Marketing12%

Accounting & Finance6%

Consultancy4%

Creative & Design4%

Customer Services2%

Graduate2%

Admin2%

Spread of JobsWithin FinTechBusinesses

*Source: Adzuna


FinTech 50

50 FinTechs you should be working with:

AdyenAlgomiBehavioSecBlockchainBUXByhirasCalastoneCommuter ClubCredit BenchmarkCrowdcubeCurrency CloudCybertillDarwinexDuedilEarthportEburyeToroETRONIKAFidor GroupFive DegreesFund AppsFunding CircleGoCardlessGuidantsHolviinslyInvoice SharingIxarisKlarnaKreditechLendInvestMambumBank with efigenceMerit SoftwareNutmegOpenGammaOsperParmenion CapitalSonovateSquirrelStockomendationSybenetixSymetricsSynerscopeTinkTransferWiseTraxpayTrunomiTrustlyWora PayZooz

FinTech

Recruiting & HR

QuickView #1 - FinTech