You’d be forgiven for thinking that London’s lacklustre stock market activity is a sign there’s scant new business springing up to whet investor appetites.
The reality is anything but. A brief peer into developments in the fintech industry shows the capital is teeming with innovation.
Shoreditch-based Kriya is one example. It works with merchants to offer favourable payment terms to businesses – a Klarna of the B2B world. Firms use it to make bulk orders and defer payment by up to 60 days – a potential life-saver for small businesses wrestling with tight cashflows who can now pay for stock after they’ve passed it to customers.
Kriya has secured a new £50 million finance facility, as we report today – giving it the firepower to fund an extra £1 billion in payments over the next two years.
Elsewhere, money transfer app Monese built an in-house banking platform so much more advanced than older incumbents that it spun the tech out into a separate company, XYB, and is now installing it at some of the biggest banks around the world.
Speak to the founders of tech start-ups in London and they’ll tell you that early-stage funding for their ideas is plentiful. But getting the cash to scale up – the so-called series B and C rounds – is much harder in Britain, and that’s when they pick up the phone to investors in the US – sometimes relocating the business in the process.
That is the gap that the public markets could and should fill – but neither of these firms look keen to float. As the boss of one of them tells me, they don’t want to take a big knock to their valuation, which is what joining the LSE entails. As small investors continue yanking money out of UK stocks at record pace, that attitude looks set to persist – and we all suffer as a result.
