Brexodus: “over 100” fintechs plan to flee London for Berlin

Outcome of referendum forces London-based fintech firms to rethink their loyalty to the city

Scores of young, hungry fintech firms are planning to move from London to Berlin in the wake of the UK’s vote for Brexit, according to the German capital’s senator for economics, technology and research, Cornelia Yzer.

In a keynote speech during London Fintech Week, held from 15 to 22 July, Yzer stressed that the potential for the UK to be shut out of the single market had forced many fintech bosses to re-evaluate their location, and take steps towards rehoming their companies.

Speaking about the number of London-based firms that had approached her department with a view to resettling in Berlin, she said, “Not 10, or 20, or 30… more – over 100” firms had been in touch to talk over the logistics.

The main attraction, Yzer noted, was Berlin’s fertility for “three Ts: talent, technology and tolerance”.

She explained: “Berlin is a boom town for companies focusing on fintech, ecommerce and mobile apps. A growing number of multinational companies are coming into town and opening incubators, accelerators and digital units to cooperate with the start-up community. Every 20 hours a new start-up is founded.”

Turning to the UK’s landmark EU referendum, Yzer commented: “I have to respect the British vote on Brexit, but I am mourning because I love to go to London. I spend most of my time outside Germany in London – more than in any other place in the world.

“But I also understand the young talent in London that voted to be in, because they see their future in the European Union and in global markets. What I can promise to them is that Berlin is open for business, and that it is the place where you can live your dreams.”

Highlighting the various financial incentives that her city offers start-ups, Yzer pointed out that the majority of government-funded programmes for seed funding and growth capital are run by the state-owned Investitionsbank Berlin (IBB).

“The IBB runs the most successful venture-capital fund for early-stage investments in Germany,” she said. “As a government, we put public money in – EU funding as well. And when you ask the EU Commission, they will tell you that this is one of the best-practice examples in the Euro area of how to deal with venture-capital money.”

Yzer noted: “The Berlin government does not only provide funding, but also support, to guarantee companies that want to relocate to Berlin a soft landing.” She added that commercial office space in her city can be obtained for a fifth of the typical cost of London rents.

However, in a separate speech, London deputy mayor for business Rajesh Agrawal assured fintech industry players that he would strive to maintain the city’s single-market access through passporting rights.

“Let’s not have any elephants in the room – or Pokémon for that matter,” Agrawal said, referring to the recent outbreak of the augmented-reality craze. “The EU referendum was bad news for London.

“I will be fighting tooth and nail to ensure [single-market access] is top of the [negotiating] agenda. It is imperative that London has a strong voice and a seat at table when it comes to EU negotiations. We got through the Great Fire of London, The Plague, The Blitz and Lehman Brothers, and I’m sure we can survive Brexit.”

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