PEER-TO-PEER lending may be one of the central elements of the UK’s burgeoning fintech sector but the majority of platforms seem to be eschewing the government’s much flaunted Silicon Roundabout as a base.
The area around Old Street and Shoreditch in East London is known for many technology startups and support networks but of the main P2P platforms, only MarketInvoice has chosen this area as a location.
Anil Stocker, chief executive and co-founder of MarketInvoice, says the company feels at home in Shoreditch.
“The Silicon Roundabout represents the spiritual home of fintech and the wider tech community,” he said. “We have previously been based in the West End and in mid-town but here in Shoreditch we feel in our own skin.
“Fintech flourishes best – being creative, disruptive and empowering – in its own skin, so we feel at home here.
“We’re a stone’s throw from the City and next door to TechCityUK who we work collaboratively with especially now that I am part of the Fintech Delivery Panel working with Eileen Burbidge and HM Treasury.
“The culture and vibrancy of the locale here plays so much to our own people and business values of ‘making it happen’ and ‘always be learning’. We have 91 people in this office over four floors and an amazing roof-top terrace to boot.”
Of the other Peer-to-Peer Finance Association (P2PFA) members, Zopa is located in Southwark, while Funding Circle and RateSetter have chosen a base in the City of London. Lending Works is near Chancery Lane, Landbay is in Victoria and LendInvest is in the West End.
Not all of the P2PFA members are even based in London: ThinCats is based in Leicestershire and Folk2Folk is headquartered in Cornwall.
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Explaining the rationale behind RateSetter’s location, a spokesman said several options were explored before they opted for the City.
“We started off in an office in Southwark, which was great for an early-stage business but we ultimately outgrew it,” he said.
“Once the team got beyond a certain size, we were spread over a few rooms which is more expensive and also acts as a barrier as it stops staff from interacting as easily.
“We wanted a large, open-plan, modern office – this is good for culture and means that our employees interact with each other more and don’t end up being siloed. The City has a lot of modern, high-quality and purpose-built office space, and is accessible and competitively priced.”
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A number of firms have snubbed London – with its eye-watering rental costs – altogether.
“Although there is a concentration of fintech expertise in London with hubs like Silicon Roundabout, the UK also has very highly skilled fintech talent across the country,” said a spokesman for Launceston-based Folk2Folk.
“Even in London many of the leading fintech firms choose to base themselves in more affordable areas where office space is more cost-effective than the Old Street area.
“Additionally, with technology not being dependent on a London postcode, there is a healthy number of fintech firms basing themselves in other UK cities and towns where operating costs tend to be cheaper but access to talent is still available.
“Some of the leading fintech companies are now based in smaller cities and rural areas including the likes of Folk2Folk, CrowdCube and Atom Bank.”
Outside of the P2PFA, other platforms can be found dotted around the country. For example, Assetz Capital is based in Stockport and Kuflink can be found in Kent.
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Dan Westley, associate director of property consultancy the CBRE, said more established technology players tend to be attracted to Silicon Roundabout while others look further afield.
“Canary Wharf has seen some clustering activity amongst the start-up community, whilst the likes of Capital One and Stripe have moved in the last 12 months to Old St Roundabout,” he said.
“Some start-ups seem to be attracted to Canary Wharf, Level 39 which is in close proximity to the banks. The roundabout has seen one or two of the more established companies locate there in the belief that it will be a prime location for attracting talent.”