Wales’ fintech unicorn is on its way, says admiring Lord Mayor
WALES has a compelling story to tell on its emerging fintech sector, with prospects high for it producing its first unicorn business, says Lord Mayor of the City of London William Russell.
With an ambassadorial role for the UK’s financial services industry, the Lord Mayor earlier this week held virtual discussions with key figures in the Welsh fintech sector including chief executive of FinTech Wales Sarah Williams-Gardener.
The City of London Corporation, which Mr Russell leads, is aiming to strengthen its ties with financial and life sciences hubs across the UK.
A recent UK Government-commissioned review of the UK’s fintech sector, carried out by former Wordplay chief executive Ron Kalifa, identified Cardiff and south Wales among 10 fintech clusters across the UK with the potential to drive the economic recovery and create a new wave of high-skilled and well-paid jobs.
The report also recommended the establishment of a £1bn fintech startup investment fund.
Mr Russell said the sector in Wales already has businesses with the potential to become unicorns (startups reaching a valuation of $1bn), citing the likes of Cardiff-based Yoello, the mobile order-and-pay platform provider, and Sonovate, the UK’s leading finance and back-office tech provider to recruitment agencies and consultancies.
The Lord Mayor said: “There is such a good story to tell about what is going on in Wales and we need to get that message out. And we will do anything we can from a City of London perspective, as I am a fintech envoy for the whole of Great Britain.
“What Yoello is doing, for example, is incredibly exciting. This time last year they had five employees and now they have more than 60. One of the things about being Lord Mayor is that soft convening power. They are now looking at another [funding] round later in the year and that is where I am going to help them by introducing them to people.
“It was also encouraging to hear such positive things about Sonovate and there is a lot of excitement about them becoming a unicorn.”
He said that funding will find its way to fintech start-ups in Wales and doesn’t believe an element of a proposed £1bn fintech start-up fund in the Kalifa report should be ringfenced for investment into Wales if realised.
He said many private equity and venture capital funders that back the sector were based overseas, adding: “A lot of them invest over platforms like Zoom. They don’t mind where you are, whether that is Wales or wherever, as it is about the quality of the businesses.”
He said ensuring talent in the sector doesn’t migrate out of Wales is crucial.
He added: “The key thing for me is maintaining that talent. Birmingham claims that 55% of graduates from their universities stay and for Manchester it is 60%. But I think it is happening anyway [in Wales]. Whether it’s firms like Delio or Amplyfi, you have got some great businesses. So Wales has a story to tell and the City can help these firms access new markets across the globe and tap into new opportunities. Collaboration between our successful fintechs will be crucial to maintaining the UK’s role as a global leader in this sector.”
He said Wales’ life sciences expertise is also internationally prominent and will be a key part of the UK’s economic recovery.
Mr Russell said investors in tech and fintech firms in Wales could also play a key role in promotional efforts.
He added: “So it is also about getting investors into firms like Sonovate (which has raised more than £100m) to talk about why they came to Wales.”
The Lord Mayor said that while hybrid working was here to stay as a result of the pandemic, talk of the demise of the office market was overstated.
He added: “We would love the City to have 500,000 people coming back into it, but the reality is that the hybrid model is already happening and it is very noticeable how quieter the City is on a Monday and a Friday.
“However, the office isn’t dead and we are still going to have people coming in, as I genuinely believe that corporate culture, mentoring and social elements are very important around creativity and idea-generation.”
Sina Yamani, chief executive of Yoello, who was part of the virtual discussions with the Lord Mayor, said: “We are about two-and-a-half years old and we have grown significantly over the last year or so. This time last year there was probably about five of us. From there we have scaled massively and we are now 60 people. We have staff based globally in all the jurisdictions that we are in, but over 60%-70% of our staff are in the UK.
“The City of London Corporation has been very helpful with their trade missions. The Department for International Trade can also put us in touch with representatives in any country we want to work with. This has opened many doors for us. We want to be in every country in the next three or four years. But the UK will remain our headquarters.”