London calling: Dear Malcolm Turnbull, act now or see best fintech talent lured away
Startup founders that participated in the recent fintech week in the UK have a blunt message for the Australian government: act now or lose even more talent overseas.
Ten Australian startups were flown to London by UK Trade and Investment at the start of October for the London Fintech Week, with many viewing it as an open attempt at poaching these companies from Australian shores.
Now one of the ten startups has made the first move, with peer-to-peer real estate lending platform Lend2Fund to soon relocate to London, as the Australian Financial Review reports.
It was a combination of more transparent regulations and readily available seed funding that convinced co-founder Paul Missio to make the leap.
“Australia can’t match the powerhouse of London for a fintech company that has global ambitions. The UK nurtures fintech for global scale but we aren’t seeing a cohesive ‘global’ vision in Australia,” Missio told the AFR.
“I dare say others will be tempted to make the move to friendly waters.”
The lure of London
A number of other startups that participated in the trip say the Australian government needs to act now on regulatory concerns and other fintech issues in order to keep these potentially huge companies on Australian shores.
Simply Wall St, a Sydney-based startup that creates infographics to simplify stocks information, also made the trip to London, and co-founder Nick van den Berg says it’s inevitable that Aussie fintech companies will look overseas.
“You will go where you think you have the highest chance of succeeding,” van den Berg tells StartupSmart.
“If the government is serious about keeping entrepreneurs here they need to do everything possible, and look around the world.
“As much as I love Australia, your patriotic feelings only go so far.”
The trip to London was “fascinating”, and he says there was little doubt about what the ultimate intention of it was.
“A government isn’t going to fly all these startups over if there isn’t an aim there,” van den Berg says.
“Undoubtedly the aim was to highlight the benefits of operating in the UK, whether for a complete relocation or setting up an office presence. They were very good at highlighting the benefits of what’s over there.
“Lend2Fund are doing what they think they can to maximise success, and that’s what people should do. That’s why we went on the trip.”
An impressive ecosystem
On-Market BookBuilds founder Ben Bucknell, who also took part in the trip, says the fintech scene on show in the UK was very impressive.
“It’s amazing how quickly they’ve established a growth industry,” Bucknell says.
“They’ve taken a very proactive approach in creating an environment that’s conducive to fintechs, and they’ve really shown a lot of strong initiatives in terms of the policies that the government has put in place. That’s paying dividends.”
But Bucknell’s startup won’t be moving to the other side of the world just yet.
“Our focus is very much on ensuring we’re delivering an absolutely fantastic product to the market we’re in,” he says.
For the moment, Simply Wall St will also be staying in Australia, but a relocation overseas is definitely on the cards at some point unless the situation improves Down Under.
“The big thing for us was whether we need to be in a different location to succeed,” van den Berg says.
“In the immediate future we answered that with a ‘no’. There’s a lot we can achieve here in Australia – 75% of our users are from outside Australia. We’re already global from day one.
“Down the track it’s absolutely on the table. We’ll go wherever we need to succeed.”
What the government has to do
The big appeal in the UK seems to be regulations that are considered more transparent and collaborative, and the recently introduced tax rebates for angel investors.
Van den Berg says the Australian government should be looking to the policies in the UK, as well the likes of New Zealand and Singapore.
“It’s pretty simple – copy everyone else,” he says.
“There needs to be less talk and more action – from a tax perspective, with rebates for investors and with founders’ relief.
“If you really want to do it just take the best market practices and steal what everyone else is doing. They need to start acting like a startup and stop talking – that’s how you build the confidence to keep these companies.”
A lack of access to capital for startups and the regulatory web are the key barriers to operating a fintech business in Australia, Bucknell says.
“People are going to go where the capital is,” he says.
“You can’t spend years doing anything without money. If you’re doing something entirely new you’re not going to have that cash flow – you need to try something that hasn’t been done before.
“There needs to be an environment that is conducive to raising capital so you can attract the highly qualified, capable people that could have alternative careers in banking or law.
“There needs to be greater upfront capital commitments and more government support, particularly when other parts of the world are already providing it.”
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