Fledgling UK fintechs received vital new backing from the government in chancellor Philip Hammond’s Autumn Statement of 23 November.
In his Commons speech, Hammond said that he wanted to tackle “the longstanding problem of our fastest-growing technology firms being snapped up by bigger companies, rather than growing to scale”.
As such, the Treasury will inject £400m into venture capital funds via the British Business Bank, with the aim of unlocking up to £1bn of investment for firms of that type.
British Business Bank chief Keith Morgan welcomed the decision. “This additional £400m of funding for venture capital… is an important boost for scale-up businesses who need this kind of funding to help them meet their ambitious growth plans,” he said.
“Smaller companies drive our economy, and it’s our mission as the UK’s national development bank to help these companies grow and succeed.”
In tandem, the Department for International Trade (DIT) will allocate an annual £500,000 to fund so-called ‘fintech specialists’ – a term likely to include those with an overview of the industry, such as senior figures at start-up accelerators – who will advocate best practices and share their knowledge with new firms.
As part of that scheme, the DIT will establish and coordinate a network of regional fintech ‘envoys’, to ensure that the required capabilities will flourish in every part of the country.
Meanwhile, one of the UK’s most prominent accelerators – Tech City UK – has been unveiled as the managing body for two, fintech-focused initiatives that were announced earlier this year:
Tech City UK chair Eileen Burbidge said: “Along with the announcements of new regional fintech envoys to be appointed and funding for DIT fintech experts from the Autumn Statement, it’s brilliant to see that HM Treasury, and the government more broadly, are continuing to support the fast-growing fintech sector.”
She added: “I look forward to convening the new Fintech Delivery Panel in order to progress specific initiatives, and also [to the] fintech services hub, to inform younger fintech start-ups about relevant professional advisers.
“All of these new measures will undoubtedly add to the likelihood of the UK maintaining its position as the fintech capital of the world.”
To assess the effectiveness of its measures, the government also announced via Hammond’s speech an annual State of UK Fintech report for reviewing the industry’s progress.