Back in the days when co-working meant making a cappuccino in Starbucks last an entire morning, London’s digital entrepreneurs were much more of a curiosity than a community.
In the last decade, that has changed, and although its FinTech scene might be smaller than Silicon Valley in scale, London sees no shortage of capital flowing in as startups far and wide make the city their chosen base for European expansion.
Clark said in her view, London is perhaps one of the most advanced eCommerce markets globally, second only to China.
That’s the reason why Clearco recently chose to set up office in London when it moved out of its home base in North America for the first time. It’s far from the only company to choose London, either. Recently, accounting workflow software firm FloQast made a similar move in order to direct its expansion into Europe, the Middle East, and Africa (EMEA).
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“We chose London not just because it’s a FinTech hub but because it’s also an accounting and auditing hub,” said FloQast Managing Director of EMEA Adam Zoucha. “If you look around, the big four are all here, plus dozens of other major accounting and auditing firms that we can look to draw talent from.”
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That London is so choc-a-block with startups and accounting firms makes it a very exciting place to be for any FinTech that’s looking to expand and land. It’s a place where new ideas are born every day, where companies can come and learn about new ways of doing business and how those alternative models might impact other markets.
“The penetration of eCommerce in general retail here is three-times what it is in North America,” Clark said. “In terms of the merchants that we serve, there’s a fantastic community here. And the trends that we see here in the U.K. then tend to follow across the rest of Europe and often to North America a few years later.”
For a company like Clearco, which is in the business of providing capital to startups based on their transactional data as opposed to traditional underwriting methods, being at the heart of those trends has enormous value.
“Being able to serve those kinds of cutting-edge merchants and understand about their business, and then support similar models as they roll out elsewhere is immensely helpful for us,” Clark said.
By the Book
Zoucha talked about how the startup scene in London is very open to new concepts and new ideas that can save time and money. FloQast’s software is used by accountants to automate almost anything they do workflow-wise. A big part of its focus is on the monthly financial close process.
“Every month, organizations go through a rigorous multiday process of closing the books,” he said. “FloQast enables that to go more smoothly and faster. So, we give accountants and folks more time for analysis and the other things that really matter.”
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One of the problems in many enterprise financial departments is that inertia tends to get in the way of them adopting modern solutions to make their processes go more smoothly. That’s not so in London, Zoucha said.
“A lot of what we’re doing is educational right now,” he explained. “People ask, ‘What is that? What does it do?’ but the moment you start talking to group financial controllers and financial departments and CFOs about the many pains and problems they have at the end of the month, they feel those pains.”
“Then it’s just about educating them that there are solutions to really solve those problems,” he added.
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Attracting talent hasn’t really been an issue for Clearco or FloQast. Whereas employers in most other startup hubs struggle with a talent crunch, neither company has faced such difficulty in London.
Clark told Webster that Clearco no doubt benefited from its association with SoftBank, which has made it a much more prominent name in the U.K. On the other hand, Zoucha said the unique nature of FloQast’s business model, which sees it hiring people from accounting backgrounds and putting them to work in software, has given it an edge.
“A part of why London is so great is that people know what B2B [Software-as-a-Service (SaaS)] and FinTech is; those are not foreign terms to them,” he said. “These are hardworking people, they have the right ethic, they’ve been trained the right way. It’s not much of an adjustment for them.”
London’s other big draw, according to Clark, is that it’s not just a hotbed in terms of talent and opportunity, but also its incredible diversity. She said it’s a place where people of all backgrounds, all ethnicities and all genders can come together and do business.
“When we look at the profile of the businesses and of the founders of those businesses we are funding here in the U.K., we see something like eight-times the number of female-led businesses relative to a traditional venture capital fund,” she said. “You can find fantastic high-growth businesses up and down the U.K. led by people of all creeds and colors and genders. For me it is really lovely to be part of that.”