By Ryan Weeks on Wednesday 21 March 2018
The majority of fintech firms are sizing up international expansion, with the US, China and UK highest up on the agenda.
The London Stock Exchange and TheCityUK have released their “Finance for Fintech” report, based on the results of surveys answered by over 400 fintech firms spread across eight different countries. In the midst of what has been proclaimed “fintech week” in London, the report highlights the UK’s leading position within the global fintech ecosystem.
The independent survey, carried out by YouGov, surveyed firms in Australia, Germany, Hong Kong, Israel, Singapore, Turkey, UK and the US, all of which have staged at least a series A funding round.
The headline finding is that fintechs are increasingly taking an international outlook. 72 per cent of those surveyed plan to expand into new countries, with the US (33 per cent), China (30 per cent) and the UK (24 per cent) looming as the top destinations for expansion.
Growth in general is the de facto expectation of fintech firms. Respondents expect to grow revenues by an average of 80 per cent over the next three years, with those that have reached series D rounds or beyond anticipating average growth rates of 320 per cent. Whether this is to be seen as encouragingly or concerningly optimistic is up for debate.
33 per cent see themselves floating on a public market versus 46 per cent expecting to remain privately owned. However, a massive 85 per cent of fintech companies anticipate raising either equity or debt funding on the public markets within the next three years. This last finding is just one part of a general thirst for capital. 35 per cent of firms see raising finance as their top priority.
New York (43 per cent), London (38 per cent) and Hong Kong (32 per cent) are seen as the top three markets on which fintechs would consider issuing equity or debt. London in general enjoyed a strong showing in the results. UK-based fintechs expect 88 per cent growth on average over the next three years, higher than the average of the other 8 countries surveyed. Public market fundraising is generally seen as easier in the UK, according to the findings.
“Our fintech sector contributes £6.6 billion to the UK economy each year, and employs over 60,000 people across 1,600 companies,” said the new City Minister and Economic Secretary to the Treasury John Glen. “As this report shows, we’re a global leader in fintech not by accident, but by design – our outstanding expertise, robust regulation and fair taxation gives us an edge above the rest, and we’re committed to ensuring that it stays this way.”