No products in the cart.
- Latest
- Trending
ADVERTISEMENT
A growth fund to support Fintech in the UK is one of many proposals put forward by Ron Kalifa in a broader report on the industry published in February 2021.
Ax Ali, UK Private Equity and Fintech Partner at EY
The tentatively named Fintech Growth Fund (FGF), designed to fill the 2bn funding gap in the UK fintech sector highlighted in the Khalifa review, is set to be independent from the government It has raised funds from institutional investors and is aiming to scale up in the Series B stage. A formal announcement is likely before the end of the year.
to discuss moving fintech futures We spoke with Ax Ali, a fintech partner at UK private equity and consulting firm EY, one of the key architects behind FGF’s endorsement in Kalifa Review.
It’s important to note that the UK is doing many things right when it comes to fintech. The UK ranks her second in the Global Fintech Index, second only to the US, the world’s largest economy, in terms of the strength of its ecosystem.
It’s also worth noting the high rate of fintech adoption in the UK, says Ali. He is now at 71%, above the world average of 64%.
A “key ingredient” to the UK’s success, according to Ali, is a supportive regulatory environment. For example, sandboxes allow companies to test innovative proposals in the marketplace with real consumers.
Add in the various government agencies and bodies, industry associations and associations working to enhance the profile and growth of the fintech sector, and all mixed together, it makes the UK very attractive for both fintech investors and founders. You’ve got the secret sauce that makes a place. .
According to Ali, the recommendation to set up a Fintech Growth Fund is based on an analysis of the factors that contributed to fintech moving beyond early stage development to becoming a global operator or listed company.
The early-stage UK ecosystem for fintech is robust, and from the innovation hub stage to the provision of capital, the UK has pumped more money into fintech than all of Europe combined, but the analysis identified There was one gap. Financing for the scaling stage. .
But the Fintech Growth Fund doesn’t just apply plaster to the problem in hopes of bridging the gap.
How can the fund meet the needs of different fintech subsectors? And what can we offer other than a capital injection?
Achieving these outcomes requires a dedicated fund focused on the fintech sector with a high degree of specialized expertise, from investment teams, investor relations and fund management.
At the Bank of England, in preparation for the Khalifa review, Ali spoke with some key figures in government, business, venture capital and fintech founders. Despite this diverse and broad cohort of advisors and experts, there was one thing they all agreed on. That is the importance of the fintech sector to the UK economy.
The review included interaction and engagement with a wide range of stakeholders within the fintech ecosystem, all of whom believed in the need to invest in the necessary relevant skills and talents. says Ali.
And while the Kalifa Review covered many areas, “there were many key factors” deemed essential to strengthening the fintech ecosystem as a whole.
For example, the government is advancing key recommendations from the Khalifa Review on key capital markets, attracting talent and establishing and mobilizing the Center for Finance, Innovation and Technology (CFIT), said Ali.
As a result of this applied consultation with key players in the field, the Kalifa Review’s recommendations (including the Fintech Growth Fund) are “well received.”
Nevertheless, there is a reason the Khalifa review was launched. The global competition for talent, ideas and capital is so fierce that Britain cannot afford to back down and do its best.
Fortunately, there are many levers to pull and buttons to push on government dashboards that could make the UK an even more attractive place to set up, develop and invest in fintech.
One area that needs further development can focus on making the fintech value chain more cohesive. This includes an early focus on education and skills to build the talent pool, easier access to the right resources for founders to succeed, and expert investors to address capital concerns. and building analyst skill sets, he said. Say.
Governments also need to ensure that further investment in fintech is facilitated in more innovative ways. Ali added that other regulatory and policy initiatives that could be optimized from the perspective of investors and founders also need to be explored.
Ultimately, there is no single vehicle that can continue to drive the success of the fintech sector. Is required.”
