Confidence in London’s financial technology (FinTech) startup community, and indeed its wider startup sector, was understandably at an all time high yesterday as another of the City’s rising tech stars completed a funding round reaching a $1bn (£663m) valuation.
Raising growth-stage capital is often cited as a challenge for tech businesses with global ambitions in London. But the co-founder of TransferWise, the international money transfer startup which raised $50m in venture capital funding on Sunday, believes London has overcome this hurdle.
“I don’t think that’s a problem anymore,” says Taavet Hinrikus, who was Skype’s first employee before he later launched TransferWise. “It’s not only us, but you can look at other examples of fast growing companies like Funding Circle for example, who are raising money from US investors.”
Indeed fellow London-headquartered tech star Shazam last week reached a $1bn valuation when it raised $30m in a new funding round from undisclosed investors who have not previously backed the company.
The funds being raised will be some help in sweeping away the sentiment that London, which lagged far behind Silicon Valley in terms of financing last year with its tech cluster receiving a total of $1.4bn in investments compared to the Californian hub’s $22bn, cannot compete with the businesses of the US.
Hinrikus says TransferWise raised this funding in order to transform into a global business, with US and Australian launches planned soon. But, even with global ambitions, he remains committed to keeping TransferWise based in the British capital.
“I think London is a fantastic base for any global company, the ease of doing business from London to Japan, from London to California. It’s uniquely positioned to be the headquarter for global businesses.”