Big Bang 2.0: Radical shake-up planned to breathe life back into the City of London – and ignite a UK fintech boom
- This week Chancellor Rishiunak told bankers to prepare for the ‘Big Bang 2.0’
- This promises to reignite financial services ahead of regulatory talks with the EU
- A fintech review is being led by Ron Kalifa, former chief executive of Worldpay
- This aims at making the UK the best place to set up and grow a fintech business
Post-Brexit, London is looking to reinvent and solidify its position as one of the world’s premier financial hubs.
Earlier this week Chancellor Rishiunak told bankers and traders to prepare for what he named ‘Big Bang 2.0’, promising to reignite financial services ahead of regulatory talks with the European Union, and after a pandemic that has left Square Mile looking and feeling like a ghost town.
While the Chancellor’s plans have so far been light on detail, former banker Lord Jitesh Gadhia says there are three areas where there could be radical change for the City of London.
Post-Brexit, London is looking to reinvent and solidify its position as one of the world’s premier financial hubs
First, the Government is reviewing how to make listing on the London Stock Exchange more attractive. Second, it is considering cutting back European regulation on how much capital banks and insurance firms must hold.
But perhaps most important is the fintech review being led by Ron Kalifa, former chief executive of Worldpay, which is looking at making the UK the best place to set up and grow a fintech business. The UK is a global leader in this space, with a list that includes companies such as Revolut, Monzo, Transferwise and Nutmeg.
But one company that could trump them all is Checkout, a little-known payments firm that has secured a whopping £11 billion valuation after raising £334 million in new funding this week, making it the fourth largest fintech company in the world – and the UK’s biggest.
Founded in 2012, with headquarters in London, it processes online payments for websites and customers including Deliveroo, fashion website The Hut Group and upmarket furniture seller Heal’s. Its most recent results showed annual revenues of £54 million.
Customers say that Checkout’s technology works better than traditional payments processors such as Visa and Mastercard, particularly on mobile, adding that it allows customers to pay using a range of different methods, including cryptocurrencies.
Every time a user makes a transaction, Checkout takes a small fee for processing it, as well as a flat fee. As a result, Checkout is processing billions of dollars every year in more than 150 currencies.
Hot property: Checkout founder Guillaume Pousaz and wife Laure
The brains behind it is a Swiss national called Guillaume Pousaz who, despite being a multi-millionaire at 39, shuns the limelight. According to people who are close to Pousaz, he is not the usual tech geek but a razor-sharp, suave businessmen who before the pandemic spent 300 days a year travelling.
He is a resident of Dubai, where his wife Laure Pousaz and two children live, but having chosen to base Checkout’s headquarters in Fitzrovia, he spends most nights at the five-star Edition Hotel in central London. F
ormer Prime Minister Theresa May would have termed him a ‘citizen of nowhere’. He has quipped in the past that his wife is afraid Checkout ‘becomes a lifetime company that takes me to my grave, like the late Steve Jobs’. Checkout now boasts 1,000 employees globally, with 500, mostly engineers, in the UK.
Pousaz says the money from the latest funding round will be used to open offices in New York and Denver and hire another 700 people this year. But he is a man under pressure as the funding rounds have brought high-profile investors who all expect a return in the near-future.
The biggest shareholders include New York-based investment firms Insight Ventures, Tiger Global Management, Coatue Management and Greenoaks Capital, which is based in San Francisco. Pousaz says he has formed close relationships with his investors, adding that he’s desperate to impress them.
He says that he wants the company to go public in the future and has held discussions about the process with a board member from Insight Ventures. For the moment, Pousaz has his eyes set on New York and the Nasdaq, But Russ Shaw at Tech London Advocates believes the Government should be doing everything in its power to make sure that Checkout is listed in the UK.
Shaw said: ‘It’s exactly the type of tech business that should be floating on the London Stock Exchange. There needs be a big push by the Chancellor and reform on listing conditions and dual listings. We can’t afford to lose companies like this.’
As Sunak prepares the Square Mile for life outside the EU, his most important allies might not be the bankers but the UK’s budding fintech entrepreneurs.