FTF on Tour – InvestTech: Insurgents, Incumbents, Investors & FCA innovation hub

By Efi Pylarinou

Fintech Forum organized a high quality happening in London focused only on InvestTech, this past Friday. The event had representative stakeholders from the entire financial ecosystem. The regulator, the incumbents, the insurgents, and investors, were all represented.

Fast-rewind backwards, to the beginning of the event: The bright wide corridor leading towards the new EY building at Churchill place was full of huge colorful posters, left and right, a visual prelude to the undergoing transformation in financial services. The forum was hosted in a brand new auditorium of EY.

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Anna Wallace, head of FCA innovation hub was the keynote speaker. She spoke about the leadership that has seeded all the initiatives of the FCA innovation hub over the past 10 months. She conveyed an entrepreneurial enthusiasm that keeps fueling their new services and tools for the entire community. Their mission is to promote competition, to support good innovation that always benefits consumers; by making sure that rules and regulations are respected. The FCA innovation hub has created tools and services geared for startups so that they safely and efficiently experiment. At the same time, they cater also to the incumbent stakeholders that are vulnerable and need support in the undergoing transformation.

The twenty startups pitching at the event were mainly European and deliberately, more from outside the hosting country (UK). German, Austrian, Swiss dominated and a few from France, Italy, and Poland; two British, one from the US, and one from Israel. Mostly aspiring to be micro multinationals; i.e. headquartered in one country, with offices and customers in a variety of other countries.

Roughly half were pure B2B and the rest B2C already branching out towards B2B that increases their B2C distribution and revenues. The rest were also wanabees of this hybrid business model that is emerging as the dominant trend for customer acquisition. One of the incumbent asset managers supporting and attending the event, emphasized that their philosophy towards the startups that approach them (even those that they don’t choose to partner or invest in) is to help them (a) improve their product, by giving them their feedback that encapsulates broad and diverse market experience, and (b) make introductions to others in the financial ecosystem much like a strategic investor would do.

The event was an interactive forum with lots of good questions from the audience. It actually provided throughout the day, collective insights towards the topic of the closing roundtable discussion: InvestTech startups: Threat, Partner, or Talent pool for incumbents? Moderated by Anna Irrera from Financial News / Dow Jones. Two VCs, two incumbents, two insurgents, participated and exchanged points of view on the how startups are scaling up, how incumbents are transforming, and where investments are piling.

Inevitably, the subsector of InvestTech focused on automating investing and asset management (coined “robo-advisors”) that of course, includes a variety of services and clientele; was the most represented. Cognizant of the risk of oversimplification in grouping the startups pitching, I list them below:

AdviseOnly (Robo)

In2expereince (Robo)

Vaamo (Robo)

Fincite (Robo)

Cashboard (asset manager)

Scalable Capital (asset manager)

Stockpulse (asset manager)

United Signals (social trading)

Crypto Facilities (multi-asset digital online broker)

BondIT (bond portfolio management)

There was one startup purely focused on internal security, Qumram. Four startups that were in the space of Big data: Scaled Risk (real-time management of petabytes of data), Sentifi (innovation in managing unstructured data), Prophis (innovation in managing structured data), Valutico (innovation in business valuation).

And lastly, four companies offering tools or partial stacks for InvestTech: Xignite (financial data APIs), Empirica (tools for algorithmic trading), Quantstore (tools for digital Wealth Mgt), and Niio (tools for Wealth Mgt).

Most startups at the forum are looking to raise capital to complete their development and implement their go-to-market strategic plans. Xignite was probably the more mature in terms of revenues. Most incumbent financial institutions at the forum are looking to adapt to the digital cultural transformation, which will reduce their costs and enable them to more efficiently serve their clients.

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