It seems apt to be writing about angel investment into fintech today, after spending last night at a dinner hosted by renowned angel investor Jason Calacanis. The unicorn chaser is in Sydney this week for Launch Festival Sydney, and most likely using the platform to spot baby unicorns in the making.
A report from the British Business Bank has found fintech is popular with Jason’s British counterparts, with 25% of respondents surveyed indicating the sector was their top area for investment. Healthcare and life sciences beat out fintech for top podium honours.
For those would be, British based investees, the report shed some interesting insights from a targeting perspective.
Younger age groups (18-34, 35-44) were more likely to have invested in Fintech,
London and South East based fintechs received the most investment from angels, compared to other verticals in the same region. Fintech investment is lower down the ranks for all other areas.
The British Business Bank has had a stellar run to date. In September of last year it reported its commercial arm – British Business Investments plc – booked a pre-tax profit for tax payers of £55.1m for the year ending 31 March 2017. A solid increase of 37% year on year, and something the government should be proud of. The arm of the bank invests in challenger banks, non-bank lenders and venture and growth capital funds to increase finance options and choices available to small and medium businesses.
Earlier in June, the bank also announced the creation of British Patient Capital, a £2.5bn program designed to support UK businesses with high growth potential to access long-term financing needed to scale up. Working hand in hand with the local VC and private equity community, around £7.5bn is expected to be deployed over the tenure of the program. The initiative will look to address the gap in VC activity in the UK, compared to the US. According to the bank, VC in the US is twice as large as it is in the UK, even when normalised by the size of the two economies.
For venture scale ups, cash for equity seems outdated and tired as a model – as the ICO market is proving. We need more of these sorts of initiatives to help tech businesses scale and founders to remain vested and committed for the time that takes to happen.
Maybe Jason needs to head to the UK next for some fresh Unicorn hunting opportunities…
Daily Fintech Advisers provides strategic consulting to organizations with business and investment interests in Fintech. Jessica Ellerm is a thought leader specializing in Small Business and the Gig Economy and is the CEO and Co-Founder of Zuper, a new superannuation startup in Australia.