Top 10 UK Fintech Startups that have expanded overseas
The financial technology industry has grown significantly in recent years, and Europe has seen its fair share of success. In 2016, the continent saw a record 450 fintech deals, closing for more than $2 billion. Many fintech businesses are seeking expansion abroad – making this the perfect time to look at the ten most successful fintech expansions.
GoCardless is a direct debit platform which offers a simple way to accept and process payments for individuals and businesses. GoCardless aims to rival the traditional debit and credit card method for processing payments, many of which involve excessive fees and lengthy processing times. The platform has also been favoured by small businesses, who have been attracted by the ability to accept payments in bulk.
With clients including Tripadvisor, Thomas Cook, the Guardian, the FT and plenty more, GoCardless has over 35,000 customers, and is already responsible for processing over £5 billion in direct debit payments every year.
GoCardless aim to benefit from the new PSD2 legislation, which came into effect earlier this year. Thanks to PSD2, all bank customers – both businesses and consumers – can now use third-party providers to manage their finances if they choose. PSD2 also builds on the framework established by the previous PSD framework, and acknowledges the rise in ‘FinTech’ companies that specialise in online payments.
PSD2 has the potential to benefit bank customers; rather than going to the bank to push individual transactions and waiting two to four days, payments can now be authorised immediately.
Given the success and popularity of GoCardless to date, the company has ambitious plans for global expansion, and is set to open between 10 to 15 new international offices within the next two years.
Funding Circle is a tool both for businesses looking to borrow money and individuals seeking high-yield investments. The online platform allows individual investors to loan money directly to small businesses, cutting out the banks and providing more efficient interest rates than usual savings accounts.
Funding Circle works by investors directly lending to businesses. Businesses then benefit from this funding to grow, creating jobs to help support local communities and the economy, while investors also benefit with attractive returns. The platform aimed to address a gap in the market, where it was felt that businesses weren’t being given the finance to grow, and that investors were making poor returns. Funding Circle was a convenient means to support both businesses and investors.
Although the post-Brexit climate has been one of uncertainty for the fintech industry, the business has received an £82 million capital investment in the past year. This has been spent largely on overseas expansion, ensuring that the business remains attractive to businesses and local governments on all fronts.
Founded in 2010, Funding Circle is among London’s top fintech startups, and to date $1 billion worth of loans have been financed on the platform. Funding Circle also received a £100 million pledge from the European Investment Bank in 2016.
Transferwise is one of the most successful fintech platforms of recent years, challenging the overseas exchange rates of most traditional banks. The software enables users to send currencies between countries with ease, while significantly reducing transfer costs and receiving favourable exchange rates.
The company was founded by Taavet Hinrikus (Skype’s first employee) and Kristo Käärmann, a financial consultant. Through their first hand experience of transferring money abroad, they noticed the excessive bank costs and inconvenience people had to endure. They decided to solve this issue and began to develop Transferwise, a platform which helps people all over the world move money across borders without bank fees.
Transferwise is London’s fastest growing startup, and hit a major milestone this year. A $58 million investment by venture capital firm Andreessen Horowizt made it one of the UK’s few ‘tech unicorns’, pushing the company to a $1 billion valuation. The platform now successfully transfers more than $2 billion every month globally, reportedly saving people £50 million in hidden charges.
By March 2019, Transferwise plans to move its European headquarters from London to the continent, and have its global headquarters remain in London. The platform has also recently launched an Asia-Pacific hub and nine other small offices overseas.
eToro was born when three entrepreneurs intended to make trading accessible to everyone, and to reduce dependency on traditional financial organisations. Their platform is designed for ‘social trading’, allowing users to automatically copy leading trades from their online community.
They offer a balance between easy access for beginner traders and improved elements for more experienced traders, using both their online platform and convenient mobile app. The eToro platform is similar to many other social networks: its newsfeed enables traders to receive updates from other traders, and each trader can share relevant information. The tool helps beginners by teaching them about the best trades, and allows more advanced traders to see the latest trading updates in their community.
eToro have already expanded to offices in Israel, Cyprus and Australia, and recently raised $39 million for further expansion to Russia and China. Given their global popularity, and their £47.5 million funding to date, the business is keen to continue expanding overseas.
For those looking to invest in a business, the underlying stereotype is that you need a large amount of money. Seedrs decided that this wasn’t the case, and looked to exploit this gap in the market. Their aim is to allow anyone to enter the investment world, buying into businesses and sharing their successes, with any amount of funds.
Seedrs is an equity crowdfunding platform which allows anyone to invest in a startup from as little as £10. On the platform, you can either invest in any of the business opportunities available, or submit your company to help raise the funds. Whatever their stake, investors can see the successes as soon as the company grows, and invest in projects they are truly passionate about. Businesses on Seedrs meanwhile have the opportunity to gain many shareholders, and amass support from the wider business community.
Seedrs funding has broken $2 million to date, and last year saw the platform raise $4 million alone, which has led them to grow rapidly overseas. Alongside their base in London, the company has offices in Lisbon, Berlin, Amsterdam and New York.
Algomi is a social network for people looking to either buy or sell bonds. The platform emerged when its founders spotted a key gap in the market: that the connection between buyers and sellers was essentially initiated through phone calls.
This platform works as a bond market network, which enables market participants to make valuable financial trading connections online. The process behind the platform is simple: it allows you to make those efficient connections faster, and replaces the traditional phone call method. Whether you’re looking to buy or sell bonds, it aims to maximise the relationships between traders and investors.
Founded in 2012 by UBS bankers, this London startup is used by some of the world’s biggest banks, and has been backed by investments from Lakestar, Euronext, AllianceBernstein and S&P Global. This success has led the company to expand to overseas offices in New York, Hong Kong, San Francisco and Chicago, with plans for an even bigger US push.
iwoca is an online flexible lending platform for small businesses across Europe, set up under the premise that small businesses don’t always get the same funding opportunities as their larger peers.
Small businesses can apply for the service online, uploading all their business accounts and banks statements. From there, iwoca will analyse your business, and provide an answer to your loans within a day. The chief benefit for small businesses is there are no upfront costs or long-term commitments.
Founded in 2012 by two successful bankers, the platform has seen loans grow by 250% in the past year, and recently raised £12.8 million from two German investors. Having already grown into one of Europe’s leading fintech lenders, the recent investment is planned to be used for further international expansion.
The founders of Currencycloud saw how much banks were charging to send money overseas, and made it their mission to make a tool that was easy and economical to use for businesses.
Their platform is a global payments system, which aims to make it easier to send money internationally. Benefits to businesses include that it can be used to pay employees, make business transactions, refund customers and manage the funds which have been sent.
The platform has been a resounding success, and processed over £6 billion in payments in the last year alone across 212 countries. This success has led the London startup to expand overseas to a shiny new US office in New York.
Behavox is an analytics tool which gathers and interprets employee data to understand the behavior of a business. Its founders aimed to create a people analytic platform, to analyse behavioural patterns within a business, and identify potential insider threats
The tool works by analysing internal and external online interactions, and generating the data, which can then be queried to discover any threats or misconduct. By using this tool, businesses can benefit from a smarter, more secure and more successful company.
The London based startup has received a $20 million deal in the past year from Citigroup, with a total valuation of around $200 million. Citygroup intend to use the Behavox service to improve customer relations; this shouldn’t be an issue for Behavox, who have already expanded to New York, San Francisco and Singapore offices.
Dopay aims to become a ‘day-to-day’ bank in markets with largely unbanked and financially underserved populations. The platform’s chief difference to usual payment tools is its focus on regions without a strong financial system.
Dopay works through a payroll service, and allows employers to calculate salaries and pay employees electronically. Unbanked employees can receive a salary through their Dopay account, which comes with its own debit card. The Dopay app also provides additional benefits, including managing your finances and sending money anytime.
Dopay is headquartered in London, and has already expanded overseas to the Netherlands, Egypt and Ghana, with plans to expand to more locations.
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