In the early days of fintech, much was made of the potential of start-ups to disrupt the retail banking industry winning over customers on the virtue of improved user experience and capitalising on a decline in levels of confidence in banks following the Global Financial Crisis (GFC). London proved to be a remarkably fertile ecosystem for the emerging sector on account of three major factors: talent, regulation, and funding.
All tech start-ups require capital, but none so much as fintech start-ups, particularly those in the lending space. While the UK may have relatively low liquidity in comparison to China and the US, it does boast a strong funding ecosystem, with most activity concentrated in London and the South East.
The capital has long been Europe’s top venture capital hub and over the past two years the UK has almost attracted twice as much VC than France, its closest rival in terms of tech funding2.