Can London continue as fintech start-up capital after Brexit?
While other major European capitals play to Brexit fears in a bid to steal the UK’s leading fintech hub status, it is reassuring to hear that Belgium is taking a different approach.
An assignment led by Belgian finance minister Johan van Overtveldt has initiated talks with UK fintech agency Innovate Finance. The aim being to establish a collaboration between the two communities and to announce the launch of a new Brussels-based hub to support financial technology start-ups in the UK and Europe.
“Brexit will not get in the way of fintech advancing in the UK and Europe,” says Lawrence Wintermeyer, CEO of Innovate Finance. “Many continental fintechs continue to see London as an attractive destination and we are keen to support future collaborations.”
To couple this, in a release by van Overtveldt, it is stated that Belgium wants to build close ties with London, to scout technology companies that want to establish additional offices on the continent and to promote the UK capital as an attractive destination for growth companies from Belgium.
According to figures obtained under the Freedom of Information Act, HMRC statistics showed a 70% drop in entrepreneurs founding start-ups around “Silicon Roundabout”, London’s fintech start-up cluster.
However, it is reassuring to hear that last year it was reported that City Road, just north of Old Street roundabout, experienced a 75% increase in the number of new businesses founded in 2016. Also, rather unexpectedly, Leicester Square, saw a 142% increase in start-up creation in 2016, possibly fuelled by the presence of neighbouring Google’s London HQ.
So it’s not just start-ups that are neglecting “Silicon Roundabout”. Silicon Valley firms like Google, Facebook, and Apple have chosen to set up their UK headquarters in other parts of London too.
It may not be that Brexit strips London of its fintech start-up capital title, it may just be that we continue to see new businesses popping up in different locations across the capital instead. This could be due to a variety of knock on effects of Brexit fears, soaring rent prices in and around previously popular start-up locations, or the fact that previous start-ups who came to the areas have established themselves and are still occupying the space, leaving little room for new startups to move in.