YORKSHIRE has phenomenal potential to become a hub for financial technology - or fintech - companies because it is starting to attract fast-growing firms that have moved from London, according to a leading entrepreneur.
Daniel Rajkumar, the owner of investUP, which is based in the Leeds Digital Hub, believes that the region’s traditional financial services sector can join forces with technology firms to secure jobs and investment.
investUP, a peer-to-peer lending aggregation platform that can automatically place investments for time-conscious investors, was originally based in London. It was recently acquired by White Label Crowdfunding, (WLCF) a Leeds-based software company that creates, launches and hosts crowdfunding sites.
WLCF is 90 per cent owned by Mr Rajkumar, a Leeds University graduate who is best known as the founder of Rebuildingsociety, which helps businesses raise funds through its online community. InvestUP is offering shares to early adopting investors.
Mr Rajkumar said that InvestUP, which has five staff, “had a pretty heavy burn rate” when it was based in the centre of London.
He said fintechs needed to be nimble and resourceful, which can be hard if you’re based in London because of the high wage inflation and other costs.
He said: “The eco-system in Leeds for fintech is phenomenal. You’ve got a large traditional financial sector, so you’ve got access to the compliance skills, you’ve got access to people who are investment advisers, and it’s got a great technology scene as well, with a lot of media companies and a lot of big-name brands that can help with web-oriented innovation.
“It’s within a small footprint as well, unlike London where you have access to that, but it’s actually fairly broadly spread. The cost of doing business there can be quite prohibitive.”
Mr Rajkumar believes there is great scope to grow the region’s fintech sector, and initiatives like the Leeds Digital Hub are helping to promote collaboration.
He added: “It is about bringing together talent, investment and the appetite for getting involved in these types of ventures.”
In an inter-connected world, there is no reason for businesses to be based in London, Mr Rajkumar said.
The peer-to- peer lending industry is growing at a rate of around 30 per cent a year.
It is expected to be worth more than £5bn by the end of 2017, and it is now regulated by the Financial Conduct Authority (FCA). investUP facilitates automatic lending for investors in the peer-to-peer lending industry. The site, which was recently authorised by the FCA, will provide investors with easy access to this new market.
The Leeds Digital Hub is a tech office and co-working space which is run in partnership between Leeds Beckett University and The Yorkshire Post. It is part of a network of Leeds Beckett University Business Centres which have been operating for more than 15 years.
More than 200 businesses across the region are currently located in the university’s private, shared and co-working spaces, which have supported over 800 businesses to accelerate their growth. The hub’s tenants work across a diverse range of sectors including tourism, education and event planning.