December 2015

15 Scale-ups join Tech City UK’s Future 50 Program

2784224532_695072f78d_bEarlier this week, Tech City UK announced 15 new members for its Future 50 programme. E-commerce is the dominant theme this year, with a third of the new companies providing innovative e-commerce solutions.

“The UK is developing a global reputation for world-class digital innovation in sectors such as fin-tech and e-commerce” said Eileen Burbudge, chair at Tech City UK. “In turn, this is attracting increasing investment activity, talent and expertise into the country”.

Looking at the regional-spread of the 15 companies, nine are based in London, while the others hail from Brighton, Ricksmanworth, Exeter, Basingstoke, and Sheffield. To date the 15 companies have raised just under £450m collectively.

Previous Future 50 graduates include Hailo, Shazam, made.com, and Secret Escapes. Gerard Grech, CEO of Tech City UK, has said: “In a rich and varied marketplace, these entrepreneurs are united by global ambition and enormous potential”.

The 15 new joiners are:

Brandwatch

Buddi

Crowdcube

Deliveroo

FundApps

Iwoca

LoopUp

Lost My Name

MWR InfoSecurity

NewVoiceMedia

Peak

Powa Technologies

Space Ape Games

The Floow Limited

Yieldify

British Business Bank and Rate Setter team-up to help SMEs

VCT schemesBritish Business Bank will now lend to small and medium-sized UK businesses. The government-owned bank has announced it will expand its lending remit, after agreeing to do so via peer-to-peer (P2P) lending platform RateSetter.

While the British Business Bank’s commercial arm, British Business Bank Investments (BBBI), has been lending to sole traders and partnerships since July 2014, is it now expanding operations to include small businesses.

The BBBI has announced it will lend at the same rates as other investors, to encourage “lending to the real economy”. The commercial arm is also working to bolster the position of alternative finance  solutions – such as P2P lending.

RateSetter, the London-based firm facilitating the new initiative, aims to provide loans to businesses within 48 hours. The scale-up, which has raised 5 fundraisings to date, has seen a significant increase in small business lending.

“In recent years banks have pulled the shutters down firmly on lending to small businesses” says Rhydian Lewis, RateSetter CEO and founder. “RateSetter is helping to reverse that trend and our books of loans to small businesses is growing strongly – business loans make up £137m of our outstanding loan book”.

He added “ we are very pleased that our partnership with British Business Bank Investments Ltd. has delivered finance for almost 1,000 creditworthy sole traders across the UK, and it is great news that this will now be extended to small businesses”.

UK firms partner-up in blockchain collaboration

Shadows of office workers entering officeThe Linux Foundation has had its numbers bolstered by two, as the London Stock Exchange Group, and Isle of Man-based Credits join the initiative.

The foundation, which includes, amongst others, ANZ Bank, Cisco, CLS, Digital Asset Holdings, Fujitsu, IBM, Intel, and Wells Fargo, aims to nurture and create an enterprise-grade, open-source ledger framework. The hope is that it will enable developers to engineer esoteric applications to support business transactions world-wide.

“Distributed ledgers are poised to transform a wide range of industries’ says Jim Zemlin, executive director at the Linux Foundation,“from banking and shipping to the Internet of Things, among others”.

“As with any early-stage, highly-complex technology that demonstrates the ability to change the way we live our lives and conduct business”, he added, “blockchain demands a cross-industry, open source collaboration to advance the technology for all”.

However, this not the first blockchain related project for either of the two companies. Credits has worked with the Isle of Man government to develop a blockchain-based registry, while the London Stock Exchange has already collaborated with a number of financial institutions to explore to possible use of blockchain.

Altruistic AI attracts $1bn

OpenAI, the non-profit venture developing artificial intelligence (AI) ‘to benefit humanity’, has been pledged $1bn by leading tech executives. Backers include the visionary Elon Musk; CEO of Tesla Motors, and Space X, Peter Thiel, co-founder of Paypal, as well as Amazon Wed Services, and Infosys.

While prominent scientists have warned of the dangers of AI, Open AI has announced that its research will focus on having a “positive human impact”. Indeed, last year, British theoretical physicist Stephen Hawking warned AI may be able to “re-design itself at an ever increasing rate” – eventually superseding humans.

AI is humanity’s “biggest existential threat” to date, agrees Elon Musk. A view the entrepreneur shared in a recent talk to students at the Massachusetts Institute of Technology (MIT). Some experts, however, agree the risk is still minimal.

“[our goal is] to advance digital intelligence in the way that is most likely to benefit humanity as a whole, unconstrained by a need to generate financial return”, expresses OpenAI, communicating on its website. “[AI] should be an extension of individual human wills and, in the spirit of liberty, as broadly and evenly distributed as is possible safely”.

Start-ups fare better in London than other European capitals

2784224532_695072f78d_bAccording to research conducted by Creditsafe, businesses started in London are more likely to survive than those launched in other European capitals.

Looking at data collected between January 2014 and July 2015, it’s clear London is the most hospitable capital for young fast-growth companies. Indeed, just 0.39% of London start-ups failed compared to 0.75% businesses in Berlin, 2.95% in Paris, and 3.15% in Brussels.

However, while London scored a better start-up survival rate, its increase in the number of active businesses was less than in Berlin and Paris. The UK capital, though, is still significantly ahead in terms of total start-up numbers. 

“The analysis points to a huge variance in economic recovery and growth across Europe”, says Rachel Mainwaring, operations director of Creditsafe. “While London, Berlin and Paris are all successfully incubating new businesses, Brussels in going in reverse.” She concluded rather grimly, however, that “even in rapidly expanding cities thousands of businesses are still failing each year”. 

Fintech start-up Curve raises $2m

Architecture

London-based Curve, the fintech start-up ‘reimagining’ the bank card, has completed a $2m fundraising with co-investors Speedinvest, Seedcamp, and the Mayor of London’s London Co-investment Fund. Several renowned angels also participated in the round, including Ed Wray of Tandem, Taavet Hinrikus of TransferWise, Ricky Knox of Tandem, and previous members of Google Wallet.

Curve’s product, which remains in closed beta, has been described as sitting ‘in the intersection between mobile payment systems such as Apple Pay, and that of the traditional bankcard’.

“At Curve, we’re focussed on building a product that will bypass the issues that currently hinder mobile payments adoption, and are thrilled to have attracted the backing and commitment from our incredible investors” said Curve CEO Shachar Bialick. “We are using the funds to further grow our amazing team, alongside developing the product with our users”.

Founded by three INSEAD MBA graduates, the start-up has announced plans for full launch early in the coming year. A start-studded advisory board includes Adrian Kamellard, former CEO of the UK Payments Council, Tomer Michaeli, co-founder of fintech start-up Fundbox, and Stefan Kestil, a  partner at Speedinvest.

The sound of start-ups: Jukedeck wins TechCrunch competition

Photo of businesspeople crossing the finish line

London-based Jukedeck, the start-up that marries music composition with artificial intelligence, was announced as the winner of TechCrunch’s Battlefield Competition earlier this week.

The musical meastro beat three other innovative finalists to the plaudit, including product marketing monitor Yoobic, delivery service MAX, and freelancer management platform Listable. In all, 15 start-ups were selected to participate in the Startup Battlefield competition for a top prize of £30,000. The 15 were whittled down to 4, which were then judged by a panel of experts. The final judging panel included Eileen Burbidge, of Passion Capital; Alex Depledge, of Hassle; Fred Destin, of Accel Partners; and Matthew Panzarino of TechCrunch.

Jukedeck, which has also scooped up a LeWeb startup, and Pitch@Palace award, generates royalty-free soundtracks for those looking to add music to video. Users have the option of tweaking both the tempo and instruments to suit the content of the video. Big clients include Google, the Natural History Museum, and a number of YouTube creators.

Worldpay’s new financing scheme for small businesses

financingWorldpay has launched a new and alternative funding scheme which will help small businesses gain access to finance. In partnership with London-based financial institution Liberis, Worldpay has devised an initiative that will allow small businesses to receive an unsecured cash advance based on future credit and debit card sales.

Through Worldpay Business Finance, small businesses’ payments are staggered according to a pre-arranged percentage of business card transactions. This ensures businesses owners are only repaying while they are earning.

Other accommodating measures include an absence of a fixed term, no interest charges, and no fines for late payment.

“We’ve been concerned that the lack of affordable funding available to Britain’s small businesses is stopping great businesses from growing and thriving” says Dave Hobday, managing director WorldPay UK. “Unlike traditional loans, the flexibility of Worldpay Business Finance means that payments can be structured in a way that better suits the models of small businesses.”

Rob Straathof, managing director at Liberis UK, voiced his enthusiasm for the scheme: “ We’re excited to be partnering with Wordplay to expand flexible funding to even more small businesses across the UK”. He added: “We understand how hard small businesses work an how important a fairly-priced and flexible credit solution is to help companies grow”.

Manchester gets Life Science Enterprise Zone

SONY DSC

The Greater Manchester Local Enterprise Partnership has been awarded a new Life Science Enterprise Zone by the Department for Communities and Local Government.

The new Enterprise Zone will promote innovation within the North West’s Life Science Sector – a sector heralded by Osborne as one of the three vehicles to drive his Northern Powerhouse initiative. Acting as a catalyst for new businesses, the new Enterprise Zone will allow the LEP to reinvest business rate growth and attract investor attention.

“This Enterprise Zone will provide a welcome boost to the Life Sector in Greater Manchester”, says Mike Blackburn, chair of the Greater Manchester LEP. “Our city is built on innovation and this sector is key for the future of our economy. It will attract top rate life science companies to the area and help make Corridor Manchester one of the top innovation districts in Europe”.

Rowena Burns, MSP chief executive, was similarly enthusiastic: “The additional jobs created as a result of the Life Science Enterprise Zone will be of high value, in a priority economic sector with the potential to benefit not just Greater Manchester but UK plc as a whole. It will deliver immediate financial and economic benefits”.

Lloyds lend helping hand to fin-tech start-up Swave

Lloyds Banking Group has opened its doors to UK start-up Swave. The fledgling fin-tech company will benefit from the bank’s digital experts for a period of 12 weeks.

Llloyds Bank has been on a spree of-sorts recently, launching a number of digital propositions in the last few months. The bank is running in-house innovation labs to test and assess potential fin-tech products and services, with customers.

“Having supported Innovate UK’s innovation challenge” said Marc Lien, Lloyds Banking Group’s Director of innovation & digital support, “we were able to see first hand the fantastic potential that Swave’s app will provide to help encourage regular savings and people to manage their money in an easy and convenient way”.

At the end of the 12 week incubation period, Swave will hopefully launch a pilot app in preparation for its full rollout early next year.

“Being able to base ourselves right in the centre of Lloyd’s innovation team” said Swave’s Ross Tappin, “means that we can appreciate the considerations that we need to make to ensure what we’re offering not only offers a great user experience, but that also we need to think about when hiring new employees as we continue to grow”.