Last Sunday marked the three-year anniversary since the UK voted to leave the European Union. There was barely a mention of this milestone in the financial media but I thought it was worth noting for one reason. Despite all the uncertainty that Brexit has wrought UK fintech is booming.
If we go back to the summer of 2016 in the UK Revolut had just 200,000 customers and was worth £42 million after their £6.7 million Series A. Monzo was still called Mondo (they changed their name in August 2016) and was valued at £30 million. Zopa was still a P2P lending platform with no hint of their future plans to obtain a banking license.
Back then many publications were calling for the death of London as a leading fintech hub after the Brexit vote. The FT ran an article about Berlin seeking to replace London as the post-Brexit fintech capital and Business Insider said there was a surge of fintech workers looking to leave London for Berlin. There was even talk of small cities like Vilnius taking advantage of the Brexit situation. Goldman Sachs was forecasting a Brexit-induced recession in the UK in 2017.
Fast forward to today and we see a UK fintech sector that is booming. So much so that there was an article earlier this month in Business Insider that said London may soon eclipse Silicon Valley as the leading fintech hub. That idea would have been laughable back in the summer of 2016. I don’t think anyone expected the UK fintech industry to thrive like it has done.
Since that fateful summer, most of the established fintech companies in the UK have gone from strength to strength. With few exceptions, these companies are growing and raising money at ever higher valuations. There are more fintech unicorns in London today than in San Francisco (although, once you take the broader Bay Area, London still trails in this metric).