Yesterday marked the launch of Innovate Finance, a London based industry body promising to be the ‘voice of UK fintech’, with more than 50 founding members onboard and the backing of the government.
Innovate Finance aims to make the UK the centre of this rapidly growing market, bringing together diverse FinTech scene; startups and big banks under one umbrella to promote the industry’s interests and foster collaboration.
Closir is proud to be a founding member of Innovate Finance and we wanted share a few thoughts on what we think this initiative means for us as well as for companies and investors globally.
What is the role of the technology sector in today’s economy and what relevance does Investor Relations (IR) have?
While many think of technology as a niche industry in itself, we would argue that innovation stemming from the tech world is increasingly the foundation for competitiveness for most industries today. Therefore, we have a lot to gain by making our own companies more competitive in global markets by supporting young entrepreneurs and their ideas very early in the product cycle. We are seeing the evidence of this by watching the significant rise of “strategic investment” teams at most large financial institutions today. Bringing us all closer to each other, through initiatives such as Innovate Finance, can only be positive.
In terms of Investor Relations, we believe that investors, whether those invested in private or public companies will continue embarking on the current trend of researching and investing in companies outside their home market and on a global basis. This means hugely increased opportunity pool for both. For instance, for a company listed on the Moscow Stock Exchange, the the number of potential institutional investors with ‘Emerging Market’ mandates are now in tens of thousands, rather than in thousands five years ago or hundreds ten years ago. With limited resources, how will companies be able to capitalise on this opportunity? How will London’s Venture Capital investors research and engage with interesting opportunities in, foe example, south of Turkey? We feel strongly that Investor Relations tools based on technology will be part of the answer.
Engagement aside, rapidly moving developments in trading, fund raising, distribution landscapes will surely provide interesting perspectives and opportunities relevant to mainstream Investor Relations.
In terms of IR, is there anything private companies and startups can learn from the their counterparts listed on global stock exchanges ?
Absolutely. We would argue that the increasingly strategic role that IR plays within our world of public companies is already paramount in the world of start- ups… perhaps without it being immediately apparent. Many of the elements that make up a sound IR strategy for public companies, such as formulating an appealing investment proposition, creating an honest and consistent two-way channel of communication, and managing expectations, require skills that we in the IR profession have been perfecting for the last 15 years or so. This is also where we believe we have a lot to offer our more junior counterparts who deal not with institutional investors or sell-side analysts, but with angel, venture capital or private equity investors – all of whom demand the very same level of excellence in IR. In addition to that, there is a great deal to be learnt by public companies too. When was the last time an IR Officer of a FTSE 100 company had to do a 90 second ‘elevator pitch’ for a prospective investor?
Where do you see London fitting in global tech scene?
With many of the team having lived and travelled extensively in the Middle East, Asia, Europe and the US, we believe that London possesses many of the characteristics required for success as a start-up hub: with some of the top universities, it has been successful in attracting talent from across Europe and beyond; from an infrastructure perspective, it is well connected to other major cities across the world and operates in a convenient time zone. It also has a clear competitive advantage in certain sectors, notably in banking in finance, which I believe can go a long way to benefit the young and growing community of FinTech entrepreneurs. To put it into context, within the five miles that span the west edges of the City and Canary Wharf, we have the largest concentration of banks, investors, and brokers anywhere in the world. This has to be positive for small companies with innovative ideas to bring into the marketplace, especially during the time of profound change for the industry. The development of entrepreneurial communities around relatively new initiatives such as Innovate Finance can only accelerate London’s ambitions to become a global technology hub. This also backs the UK and EU economies and helps existing companies become more competitive globally.
We look forward to playing our part in supporting the movement.