According to Dealroom, London received €5 billion in startup funding in 2017, the most out of any city in Europe, making it Europe’s main startup hub!

2017 was marked by big funding rounds which have led to more local unicorns — companies valued at over US$1 billion — such as meal delivery startup Deliveroo (€330 million raised in 2017), simulation software Improbable (€433 million raised in 2017) and mobile challenger bank Revolut (€61.9 million raised in 2017).

With over 5,000 startups in its ecosystem, London is able to offer opportunities to companies from a wide variety of industries to discover new ways of working that can address key business challenges.

Strong support systems have been key in the dynamic growth of startups, even in highly-regulated industries such as financial services, due to London offering an environment supporting experimentation. For example, Britain’s Financial Conduct Authority (FCA) launched its UK sandbox in 2016, allowing for innovative  fintech development without requiring a full, strict regulatory process for testing. According to FCA board member and Director of Strategy and Competition Christopher Woolard, 90 percent of the companies that participated in the first round of applications for the UK sandbox, including blockchain companies and startups, have “gone on to market.” He also added that “many firms find it easier to get funding as a result of participating in the sandbox [because they have learned] an enormous amount about how new technologies are being applied.”

Other crucial developments in London include the growth of coworking spaces such as Level39 which support fast-growing tech companies by giving access to world-class customers, talent and infrastructure with mentorship support from leaders at companies like Morgan Stanley, UBS and Citi. The space has since grown into a community of 1,250 leaders in fintech, cybersecurity and retail tech!

With London’s status as a key financial center, it comes as no surprise that it has sparked the development of strong financial technology (fintech) startups. 2017 saw London’s fintech startups attracting a record US$1.3 billion (€1.12 billion) in venture capital, making up 20% of all VC investment in London!

Digital and mobile-only challenger banks have been the most prominent examples. The UK boasts local players like Revolut, Monzo as well as Starling Bank and has also seen the entrance of other European competitors such as Germany’s N26.

Revolut has been especially successful, raising an estimated €290 million, to expand its services in Europe and beyond. The startup offers banking services to both consumers and businesses. It has focused on offering a better banking experience adapted to today’s needs with initiatives such as Vaults — a savings system — which allows customers to round out their purchases and save the difference in their local currency or cryptocurrency; for example a customer would buy a smoothie for £1.50 and Revolut would also be automatically buying £0.50 worth of Bitcoin and storing it in the customer’s Vault.

With the high costs of operating a business in London, there has also been strong development in AI-powered solutions which can automate key processes, enabling companies to gain business efficiencies.

One such startup is DigitalGenius which has a Human+AI platform that integrates with existing CRM tools to give human operators some chatbot assistance for the more repetitive parts of customer service. Its AI aims to understand the customers’ objectives, before driving automated resolutions through APIs that connect seamlessly to a business’ own backend systems, working with companies such as the airline KLM Royal Dutch Airlines.