London’s First Fintech Unicorn Says Brexit Means It Would Look Elsewhere NowBy
TransferWise CEO Hinrikus cites uncertainty about immigration
Makes comments at tech conference featuring Carney and Hammond
When Taavet Hinrikus co-founded TransferWise Ltd., an exemplar of the U.K.’s fintech scene, he chose London as its base. If he had to do it all over again, he’d go elsewhere. The reason: Brexit.
That was the message Hinrikus delivered on Wednesday at the International Fintech Conference in London, an event hosted by the Treasury and the Department for International Trade and attended by Mark Carney, governor of the Bank of England, and Chancellor of the Exchequer Philip Hammond.
“While we’re happily headquartered here in London, if I were setting up TransferWise today I would not choose London,” said Hinrikus, whose “unicorn” or startup worth more than $1 billion, employs 650 people and transfers $1.2 billion in 40 currencies every month. “We have no idea what Brexit will mean for the city or for the country and that uncertainty is damaging.”
Anxiety is mounting among some in the startup community that Brexit will spoil what made London a hothouse for fintech development. International cooperation is important to this sector, and more than 40 percent of the tech startups in the U.K. were founded by people who studied abroad, according to a survey by venture fund, Balderton Capital. Venture capitalists have invested more than $2.6 billion in British fintech startups since 2010, far more than any other European nation.
“Talent is the lifeblood of a fast-growing company,” Hinrikus, 35, said in an interview before his speech. “The question is what will the U.K. do now? It has supported visas for entrepreneurs and tax breaks for startups. It needs to double down on this.”
His speech struck a sober note at an event meant to showcase the U.K. as the world’s No. 1 hub for financial technology innovation. Screens behind the speakers bore slogans reading “Welcome to a land alive with opportunity,” and an adjoining hall was filled with booths from dozens of fintech firms.
Not every entrepreneur agrees with Hinrikus. Samir Desai, the co-founder and head of Funding Circle Ltd., said London’s position as a global financial center will continue to make it a magnet for fintech firms. “It’s still a great place to start a company," said Desai, whose firm is the No. 1 online lender in Britain. “You have the ecosystem, the talent, and the support of the government.”