In the vibrant FinTech startup community of northern England, particularly in the Manchester area, a burgeoning ecosystem is rapidly emerging. However, despite significant growth and innovation, these non-London-based FinTechs are encountering challenges in attracting the attention of investors and accessing vital funding opportunities.
According to a recent report by Bloomberg News, the number of FinTech startups and scaleups in the northern region of the UK has tripled to 124 in 2023 over a span of three years, positioning it as one of Europe’s fastest-growing tech hubs. Notable among these companies is Financielle, a money-saving app tailored for women, spearheaded by founders Laura Pomfret and Holly Holland.
Despite their innovative offerings and ambitious growth plans, Pomfret and Holland lament the London-centric nature of the UK’s investment landscape. They highlight the struggle faced by non-London FinTechs in garnering attention and securing funding from the country’s financial and investment epicenter.
In an effort to overcome these challenges, Pomfret and Holland embarked on a winter journey across Europe to court potential investors, underscoring the proactive measures taken by northern FinTechs to expand their networks and attract funding.
The disparity in investment focus between London and other regions of the UK is palpable, with established finance firms predominantly concentrated in the capital. However, northern cities like Manchester boast a burgeoning FinTech ecosystem, with prominent players such as Revolut, Adyen, Klarna, Lloyds, and Bank of New York Mellon having a notable presence in the region.
Despite the growing momentum and potential of northern FinTechs, recent data from S&P Global suggests that the industry is facing pressure in terms of deal-making and funding. In the first quarter of 2024, global FinTech funding rounds witnessed a decline in both the number of deals and the total dollar value compared to the previous year.
Nevertheless, there remains optimism for the future, particularly within AI-focused firms, which are attracting significant attention and activity. Industry experts anticipate a resurgence in growth and investment activity in the latter half of the year, buoyed by recent mergers and acquisitions, including Nuvei’s multi-billion-dollar transactions.
As non-London FinTechs continue to innovate and drive forward the UK’s FinTech landscape, the need for greater investment diversification and recognition of regional hubs like Manchester becomes increasingly apparent. With concerted efforts to foster collaboration and investment outside of London, the UK’s FinTech ecosystem can truly thrive and reach its full potential.