Report: Scaling UK Regional FinTech

PRACTICE AREAS

Stakeholder engagement, stakeholder communications, report launch, media relations, panel preparation, video production

Report: Scaling UK Regional FinTech

In April 2024, Innovate Finance, Streets Consulting and Whitecap Consulting published the ‘Scaling UK Regional FinTech’ research report, which provides valuable insights into accelerating the growth of regional scaleups based outside of London and the South East.

The research project, undertaken by Whitecap Consulting and co-published with Innovate Finance and Streets Consulting, was designed to answer a fundamental question for the FinTech industry and the wider UK economy: How do we enable more FinTech firms to successfully scale up in the UK?

The ‘Scaling UK Regional FinTech’ research report delves into the growth and development data of 250 of the UK’s regional FinTech scaleups outside London and is supported by interviews with leaders and entrepreneurs. It reveals the challenges and opportunities FinTech scaleups face as they grow, navigate the current economic climate and strive to bring the innovation and growth that the UK economy needs. 

Key Report Findings

Market
1) 87% of FinTechs analysed have a B2B element to their go-to-market strategy, compared to 30% B2C firms (16% have both).
2) On average, B2Cs that obtain funding achieve double the revenue and employee growth of B2B only firms.
3) Firms in Lending, Banking, InsurTech, Money Management and WealthTech enjoy the strongest revenue growth.

Finances
1) Raising investment correlates to higher employee and revenue growth, but revenue grows at a proportionally lower rate. 
2) 9 out of 10 firms that attended an accelerator went on to raise funding.
3) Firms in Payments and WealthTech account for the largest number of scaleups, but PropTech firms are most likely to successfully raise funding.

People
1) Firms with female founders achieved over 30% more turnover growth than those with male-only founders – yet only 16% of firms had a female founder.
2) More than half of FinTechs had more than one founder; the average age of all founders is 38 years old.
3) The more founders, the higher their revenue growth rate (companies with up to four founders were part of the study).

Key Report Recommendations

Based on the analysis and interviews undertaken for the research report, evidence suggests the following actions would help create more FinTech scaleups across the UK:

For entrepreneurs:

  1. Vocation, not location. What you do and how you do it will define your success, not your location.
  2. Don’t go it alone. FinTech firms with multiple founders are more likely to successfully scale.
  3. Ensure gender diversity. Firms with one or more female founders outperform male-only founder teams.
  4. Join an accelerator. Companies which were part of an accelerator raised investment more successfully; the coaching, guidance and contacts within accelerator cohorts can assist as organisations scale. 

For investors, policymakers and the wider FinTech sector:

  1. Think nationally. Our analysis shows that location doesn’t matter, although being city-based has a positive impact on growth.
  2. Reduce risk for entrepreneurs. More support is required in terms of tax relief schemes and access to funding.
  3. Encourage diversity in FinTech leadership. More initiatives are required, building on the new government taskforce to create dedicated funding for female-founded businesses and to provide support for other challenges faced by female entrepreneurs. 

For a more personal view on the significance of this report, read our blog on ‘Charting the Success of UK Regional Fintech Scaleups.

Click here to download the report

Videos

Our CEO, Julia Streets, MBE and Julian Wells, Director & Fintech Lead at Whitecap Consulting, share their thoughts on the Scaling UK Regional FinTech research. Recorded at the 2024 Innovate Finance Global Summit.

Stay connected: For future updates, sign up to our newsletter.