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The UK fintech startup scene

Currently, there are more than 1,400 high-growth fintech companies in the UK, 20 unicorns (around half of the UK’s billion-dollar startups), and more venture capital investment than any other industry. A total of £21.9b has been raised in equity funding by UK fintech companies so far, with a staggering £7.41b secured in 2021 alone.

As these fintech startups and scaleups grow, they disrupt the traditional financial services industry while fostering innovation. “Fintech”, or financial technology, is an industry that seeks to make financial services more accessible and efficient for businesses and consumers. Companies such as challenger banks, payment processors, budgeting apps, and cryptocurrency startups fall into the “fintech” machine. Along with other digital banking technologies, fintechs often use artificial intelligence, machine learning algorithms, blockchains, and automation.

A word on London fintech

A staggering two-thirds of UK fintechs are headquartered in London, one of the top three fintech hubs in the world. There are few cities in the world that can match London’s depth of financial, technical and creative talent in fintech.

The new way of classifying startups

Due to their uniqueness and innovation, startups grow at different rates. Regardless of the sector or location, you must be able to classify and analyze large data sets on ambitious businesses. With Beauhurst’s cross-sectoral classification system, they conduct more informed analyses, and identify key trends, areas of potential, or underfunded industries reliably. Take a look at how they’ve described the startup evolution stages:

Seed: new startups, with few employees and limited equity funding.

Venture: companies that have been around for a few more years, perhaps with more established products/services and likely a valuation in the millions.

Growth: profitable companies with a multi-million turnover that have been around for at least five years. They’re likely to have secured multiple fundraisings and to be expanding their product range and international activities.

Established: firms that are 15+ years old, or 5+ years old with three consecutive years of £20m+ turnover or £5m+ profit.

Zombie: those that have had long periods of inactivity or are suspected to be close to Dead stage.

Dead: for instance, when a company is dissolved or announces that it’s ceased trading.

Exited: companies that have exited via an acquisition or initial public offering (IPO).

Contact us for an exploratory call.

In our role as specialist UK fintech accountants in London, we work with fintechs at any stage of their growth. We have a team of leaders who have years of fintech experience, as well as vast banking experience. We invite you to get in touch, for an exploratory call. See where we can elevate your business! If you’d like to see more about our accounting services to fintech companies, visit our page here. Or take a look at our client success stories here.

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