The financial technology (FinTech) sector is responsible for a record hike in venture capital being poured into London's startup scene, a report has revealed ahead of our own WIRED Money event this week.
London and Partners, a public-private partnership created with backing from the Mayor of London and designed to promote the Capital outside the UK, announced on Friday that of the $1.47bn (£94m) VC funding raised during the first half of the year, $1.18bn (£75m) was invested into London businesses and of that, 40 percent was being directly invested into local FinTech.
FinTech businesses based in London, including Funding Circle, Azimo, WorldRemit (the company, due to take the stage at WIRED Money, raised $100m/£64m in February) and Currency Cloud, raised $472m (£302m) between January and July 2015.
Tech companies in general raised 80 percent of total funding and 70 percent of deals, the report adds. "Last year it took London tech firms nine months to reach the billion dollar mark, this year they've done it in six months," commented Eileen Burbidge, partner at early stage venture fund Passion Capital and the Mayor of London's tech ambassador. "The city has become such a tech powerhouse because it excels over other tech hubs around the world. London combines the technology and digital innovation of Silicon Valley with the Wall Street financing heritage of New York and the policy making of Washington DC -- all in one phenomenal city."
Those are some pretty weighty comparisons. But Burbidge might also have noted that despite bringing together the best bits of three of America's most successful cities, London's proud stats pale in comparison to Silicon Valley's: the region saw $5.05bn (£3.23bn) of VC investment in only the first quarter of 2015. And that figure represented the third consecutive quarter drop in VC spending for the city -- I.E., it was a bad month for funding. Even so London has recently been judged ahead of many cities including San Francisco for its ability to capture innovation, and the sense is that momentum is gathering.
Being a Boris Johnson-backed venture, London and Partners was also keen to point out how London's transformation into a tech hub powerhouse has aligned with the launch of the government-funded Tech City five years ago -- VC funding has increased tenfold since 2010 (to find out more about what the organisation actually does, you can read our interview with Tech City's CEO Gerard Grech). It also points to research not carried out by a promotional body, that states London's digital tech scene will contribute $18bn (£11.5bn) to the capital's economy in 2015.
Speaking to London and Partners about the announcement, Hazim Medani, DoPay CEO, whose company raised $2.4m (£1.5m) this year, called for a focus on more early-stage funding. "The money will allow us to push ahead with our growth across Egypt and expand into new markets across West Africa," he said.
To find out more about the city's booming FinTech scene, or to catch some of the most exciting startups vying for that early stage funding, you can still buy tickets to WIRED Money, taking place 8 July at The British Museum.
This article was originally published by WIRED UK
