UK launches £2.5bn startup initiative

UK launches £2.5bn startup initiative

The UK government has launched a series of initiatives designed to attract more foreign fintech experts to work for UK startups and to encourage those same startups to remain in the UK rather than uproot to an EU-based neighbouring jurisdiction.

The £2.5bn Patient Capital Fund has been launched to support UK companies with "high growth potential" and to enable them to access long-term investment. The government is also planning to open two international tech hubs in Brazil and South Africa.

In addition, the UK government has announced Startup Visa, a new visa path that proposes to streamline the application process for entrepreneurs and tech experts. It will replace the existing visa fastrack programme that was exclusively for graduates and will enable applicants to use endorsements from business sponsors or fintech accelerators as well as universities. 

The new visa plan, which is expected to launch in early 2019, was announced by home secretary Sajid Javid. "The UK can be proud that we are a leading nation when it comes to tech and innovation but we want to do more to attract businesses to the UK and our migration system plays a key part in that," he said.

The initiative is also a concession to the numerous fintech figures that have called on the government to ease its hardline, post-Brexit stance on immigration, arguing that it could negatively affect the UK's ability to attract the best talent amid an ongoing battle among Europe's financial centres to become the international fintech hub of choice. 

In addition, the UK government's Tech Nation programme is launching its first talent contest, a programme designed to encourage UK fintechs to stay in the country by offering the chosen applicants free networking lunches, trips to meet potential partners in the US and tips from established fintech executives. 

The programme, which will begin in September, will be open to early-stage fintech firms that are based in the UK and can demonstrate some form of market success to a judging panel of fintech luminaries including Anne Boden, chief executive of Starling Bank. 

A lack of post-Brexit clarity has rattled the UK's fintech sector and also led other EU financial centres such as Paris, Dublin and Frankfurt to make explicit overtures to London-based startups to relocate. 

The City of London has consistently called on the UK government to do more to protect its fintech sector, calling for a digital skills visa in July 2017 and then calling for a single policy vision for fintechs in October 2017.

It remains to be seen whether the Tech Nation initiative will satisfy the City of London's demands but financial services minister John Glen was bullish in his promotion of the initiative. "The programme will help to give some of these start-ups a boost to the next stage, and with it bring innovative new products to the market,” he said. 

 

 

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