Navigating Growth: Strategies from UK’s Regional Fintech Scaleups

Firms led by female founders are achieving higher turnover growth than those with male-only founders – an accomplishment overshadowed by the reality that only 16 per cent of firms in the UK fintech sector have a female founder.

That’s according to the ‘Scaling UK Regional FinTech’ research report, which delves into the growth and development data of regional fintech scaleups outside of London and the South East.

The report, from Innovate Finance, Streets Consulting and Whitecap Consulting, analyses key data of 250 scaleup companies based across the UK. It exposes the hurdles and prospects confronting fintech scaleups during their growth journey, as they navigate the present economic climate and endeavour to deliver the innovation and expansion essential for the UK economy.

Key findings:

• Fintech firms with female founders achieved over 30 per cent more turnover growth than those with male only founders – yet only 16 per cent of firms had a female founder
• More than half of fintechs had more than one founder; the average age of all founders is 38 years old.
• The more founders, the higher their revenue growth rate
• 87 per cent of fintechs have a B2B element to their go to market strategy, compared to 30 per cent B2C (16 per cent have both)
• Firms in lending, banking, insurtech, money management and wealthtech enjoy the strongest revenue growth

What’s next?

The research report’s analysis and interviews suggest strategic actions to foster the growth of fintech scaleups across the UK.

Entrepreneurs are encouraged to prioritise vocation over location, with success defined by what and how they operate rather than their geographical base. The report advocates for collaboration among founders, highlighting that fintech firms with multiple founders are more likely to scale effectively.

Moreover, promoting gender diversity within teams is crucial, as firms with female founders consistently outperform male-only teams. The report recommends that fintechs actively participate in accelerators, as these programmes offer invaluable resources, mentorship, and networking opportunities crucial for scaling operations.

For investors, policymakers, and the broader fintech sector, the report highlights the importance of thinking nationally rather than regionally, as location proves less significant in the context of growth. To reduce risk for entrepreneurs, there’s a call for increased support through tax relief schemes and improved access to funding.

The report also outlines actively fostering diversity in fintech leadership, particularly through initiatives aimed at supporting female-founded businesses and tackling challenges encountered by female entrepreneurs. These efforts build upon the groundwork established by the government’s recent taskforce initiatives.

Thoughts on the report

Julian Wells, director and fintech lead at Whitecap Consulting, said: “The research highlights some fascinating and surprising trends, but also contains valuable advice from those founders who have ‘been there and done that’ in terms of creating and growing new fintechs. The main message for us from this report is that in today’s world where you scale a business is nowhere near as important as how you scale a business.

“What is not a surprise to us, is to see so many regional fintech innovators succeeding outside of London – there is an extremely vibrant ecosystem of fintech innovators across all four corners of our nation. These are exactly the kinds of data and insights which can help shape the UK’s effort to maintain its position as a true leader in global fintech.”

While Julia Streets, CEO of Streets Consulting, also added: “The data on diversity from this report is bitter-sweet. Once again we see the benefits of diversity and inclusion, since fintechs founded by women significantly outperform those founded by men; but once again we see the size of the challenge, as fewer than a fifth of fintech firms are founded by women.”

Additionally, Janine Hirt, CEO of Innovate Finance, said: “The report tells the inspiring story of fintech innovators across the UK, showing their incredible contributions and determination to grow successful businesses and drive so much positive change for a more democratic, transparent and inclusive financial services sector that benefits both consumers and businesses alike”.