London being crowned global fintech capital at the end of May didn’t surprise me – but there is a case to be made for launching and growing a business elsewhere
When I launched Myprotein from a lock-up garage in Manchester in 2004, I was a young 23-year-old lad, with one GCSE and no formal business qualifications.
My parents and friends weren’t really into business at that time. I had no mentors or business partners. And, in contrast to the booming start-up sector in the North West now, there were very few support groups helping businesses to launch in the region.
Today, the Northern Powerhouse has earned its name.
According to data released last year by RSM, there were 1,079 software development and programming businesses incorporated in the North West in the prior 12 months – a 48 per cent increase on the previous year, and the highest growth of any region in the United Kingdom.
And it’s not just tech start-ups that are benefitting from the lower living and operating costs. Some of the most successful companies in the past decade have based their headquarters in the region, including The Hut Group, Boohoo, Auto Trader and PushDoctor. Additionally, the launch of Media City housing the BBC and ITV has also created a booming media economy in Salford.
But we have a long way to go before we can truly compete with the south. London has a global power that the north can never match, and I wasn’t surprised to hear at the end of May that the capital has become the global leader in fintech. Since 2018, the UK fintech market has outstripped both the US and Europe, and the first quarter of this year – before the COVID-19 pandemic took hold – saw double the amount of investment deals than its competitors.
Fintech capital – good or bad?
While these figures relate mostly to deals placed in London, the start-up sector is booming across the UK as a whole. Aside from Manchester, the likes of Liverpool and Sheffield are becoming known for their innovation, and although still in close proximity to London, Oxford was recently named sixth in the rankings for venture capital investment per capita, while Leeds saw a 777 per cent increase in capital invested within the city in the past decade – the 16th highest in the world.
These figures are clear indicators that the opportunities across the UK are as open as those in London.
Although this level of investment was unheard of in 2004, I was personally never tempted to relocate Myprotein to London – although it should be noted that I wasn’t seeking investment, having bootstrapped the company. My love for my home region also, perhaps subconsciously, played a part in its eventual sale.
At the time, the company was the number-one sports nutrition brand in Europe, employing over 100 people, and therefore the sales process was heavily contested.
I had offers from some of the largest blue-chip, FMCG brands, institutional investors and private equity companies, mostly London-based. Ultimately I chose to sell to The Hut Group – another Manchester success story – in a combined shares-and-cash consideration. It felt right to sell to a northern company, and it proved that the region can compete on just as big a scale as those in the south.
Nearly ten years later, and such investment deals taking place in the North West are now commonplace. Although funding for start-ups still isn’t as accessible as London, we are seeing movement in terms of access to venture capitalists, angel investors, and business accelerators, including Mercia Asset Management, GC Angels and bodies such as Tech Nation who are really helping to set a precedent for the region.
The current pandemic will undoubtedly hit the market nationwide and globally, and I’ve seen some reports of the investor market already stuttering. But the real test of whether the North West can keep its growing reputation will come in the next few months as the market shifts once again to a post-COVID economy. If the region can continue to support the start-up scene as it has been, the next decade could bring Manchester into the worldwide spotlight, and not before time.