What are the top fintech companies in the UK?
I’ve put together a list of companies that are leading the Fintech scene in the UK. The criteria: nearly all of them have been valued at over £100 million (with a couple exceeding £1 billion!), are considered leaders in their specific subsection of Fintech and have won some prestigious awards.
The UK is a special place for Fintech. The mix of talent, supportive regulatory scene and practical timezone means the UK is placed as the second biggest fintech market in the world after the US. In 2019 alone, the UK fintech sector attracted $4.9 billion!
I’ve had the great fortune to work in the Fintech space in several different countries now (Malaysia, Spain and the UK), and every time I’ve been fascinated at the incredible creativity, motivation and collaboration between Fintechs. The list I’ve put together gathers Fintechs in the UK from a diverse number of sectors: lending, neobanking, payment processing, identity verification and more. This list of Fintech companies is by no means exhaustive - there are several thousands of fintech companies in the UK with new fintech startups launching every month! This article will be continuously updated as the Fintech scene keeps evolving.
1. TrueLayer (B2B)
TrueLayer is a B2B company that helps Fintech companies use their customers’ banking data without having to build their own systems.
Instead of spending months trying to figure out how Open Banking and PSD2 works, Fintechs can partner with TrueLayer and use their PSD2 license to build their own system foundation.
TrueLayer raised $7.5 million in funding in 2018 and $35 million in 2019, and are used by all the big names in the UK such as Zopa, Revolut and Monzo. One could describe them as “selling shovels to gold diggers” - with the Fintech boom, someone needs to provide the tech for startups to launch with.
2. OakNorth Bank (B2B and B2C)
OakNorth is a bank that caters to both businesses and individuals. They offer loans, financing and savings to entrepreneurs and small companies, and have been described as a “bank for entrepreneurs by entrepreneurs”.
They’re proud of the fact they’ve reached net carbon zero emissions for scope 1 and 2 emissions and have been named Europe’s Most Valuable Fintech. That’s because in 2019 the bank increased its pre-tax profits by 95%! Since its launch in 2015, OakNorth has lent more than £3.3 billion and provided over 55,000 savings accounts to customers.
How is OakNorth different to other Fintechs? It’s actually profitable! This is mostly due to its highly developed technology which allows it to lend up to $25 million to banks at very competitive rates. The truth is that small businesses are still largely ignored by big banks (remember 2008, and now 2020!), meaning there’s a huge underserved market that needs Fintech lending in the UK.
3. Revolut (B2C and B2B)
Revolut is a neobank that offers current accounts through an app. They send your debit card in the mail and you can easily track all your expenses from your phone app. They started out as a currency exchange app, and now offer travel insurance, cryptocurrency trading and stock market investing.
They’re an ambitious company, with Storonsky’s (the CEO) clearly stating Revolut’s objective to become the best Fintech bank, as well as plans to exceed a $10 billion valuation. They’re currently planning on launching in 24 markets and hiring 3,500 new staff after partnering with Visa. They’ve tripled and quadrupled their revenue in the past few years, with their latest funding round raising $500 million. With a valuation of $5.5 billion, they’re one of the prized unicorns in Europe.
They recently have had a bit of bad press about poor compliance and a toxic startup culture, but the CEO has been very open about Revolut making mistakes and learning from them. They’re most definitely pushing the boundaries of banking, customer experience and marketing - I greatly enjoyed listening to their Communications director (who’s Scottish!) chat about Revolut’s marketing strategies on the Fintech Marketing Podcast.
4. SumUp (B2B)
SumUp is a Fintech that allows merchants to accept payments through “smart devices”.
These devices range from different card readers that connect to your mobile phone, to a charging station and printer. Their slick looking card readers allow you to accept contactless and Apple payments, with an option to request payments through email.
So far, they’ve raised £304 million and have big plans to launch in new markets. In 2018 they were named the fastest growing company in Europe by Inc 5000 and reported 4,000 companies joining their platform every day (wow!).
5. Funding Circle (B2B)
Funding Circle is one of the main peer-to-peer lenders in the UK; they provide a marketplace for investors to lend and gain a higher return on investments, and businesses to receive loans that the big banks won’t offer.
Their application process is quick, simple and easy for small businesses, which makes the platform popular for companies who need loans relatively quickly. Once again, this Fintech is catering to an underserved segment of the market.
They are also the only Fintech on this list that have gone public. Funding Circle raised £300 million and was recently valued at £1.5 billion (unicorn!). They have over £3.7 billion in loans under management, and claim to have helped over 50,000 small businesses receive loans.
6. Cleo (B2C)
Cleo is a banking app like no other: it’s an AI powered current account that manages your money through a chatbot. You really need to try it to understand it. 🤖
They’re completely in step with the Gen Z generation: emojis everywhere, sassy tone of voice and you can even get roasted by the chatbot, Cleo. Every week you can play games on the app, get quizzed and even get your money horoscope.
Although they started in the UK, they saw much more success in the US, with 90% of its users coming from the US. They boast of 1,000 new signups every day, and have raised $13.3 million in their total funding round. A smaller funding compared to the others on this list, but the unique product and technology behind this Fintech gives it a place amongst the big players.
7. Nutmeg (B2C)
Nutmeg is a digital investment firm that helps investors manage their portfolios through their robo advisor platform.
Investors can set a goal, choose how to invest their money and choose an investment style. According to the investor’s preferences, Nutmeg builds a portfolio that allows customers to easily track and monitor their investments. They’re proud of being transparent, charging lower fees and staying away from complex financial jargon. Depending on the product picked, investors can start with as a little as £100.
Nutmeg has raised a total of $153.6 million. They manage £1.5 billion in assets and have the backing of well known institutions such as Goldman Sachs and Schroders. Although growing rapidly, they struggle with year on year losses and are planning to increase revenue by licensing its service to other banks and financial institutions. It should be very interesting to see the impact of the 2020 crisis on wealth managers such as Nutmeg.
8. Onfido (B2B)
Onfido is a software-as-a-service that helps companies verify their users' identity using AI.
They mostly cater to other Fintechs, since anything to do with financial data requires a KYC (Know Your Customer) process when users sign up. When a user downloads a cool neobank app, they’ll need to follow instructions such as blinking, smiling and turning their head to one side. Onfido then takes live pictures which are compared with the photo ID provided. They also do a background check and ID risk profile which they then send over to the client company. By using facial biometrics and a photo ID, users can verify accounts everywhere in a few minutes.
This type of service will be in high demand in the coming years, especially now in 2020 when going digital is a necessity rather than a luxury (pandemic!). Onfido are used by other big names such as Revolut, Orange and Bunq.
Onfido was founded in 2012 and has since raised $182 million to date. They claim to catch 98.7% of ID fraud attempts, and have been growing at 130% every year.
These top fintech companies in the UK are pushing the boundaries of money management, lending and business financing. Some are also pushing the boundaries of branding, marketing and customer experience. This is largely what makes Fintechs different to large incumbents: a focus on personalisation and customer experience.
The data driven trends and reports are all showing it: companies are moving away from increasing individual sales and instead are focusing on the value of the customer itself. The more personalised a product (through data), the more a product can meet a customer’s specific needs and demands. This increases trust with the customer which makes it easier to upsell and sell more expensive, higher margin products.
Uber, Amazon and Google were the first wave of companies to use this business approach, and now Fintechs are able to too thanks to regulations such as Open Banking and PSD2. It’s the companies that embrace this new way to do business that will come out ahead, especially during and after a crisis like the Coronavirus pandemic in 2020. Make sure to bookmark this post and see which are the top companies in 6 months.
