by Joseph Young
Technology-driven investment companies and venture capital firms generally disfavor the formation of startup accelerators for emerging trends like fintech because it hinders core investment strategies. Yet, a young investment firm called Octopus Investments is moving off-trail to fund and house innovative fintech startups in London.
Most technology investors refrain from housing emerging fintech startups as it could alter the vision of the company significantly. For instance, a venture capital firm with billions in capital will disprove the idea of accelerating fintech startups with substantially low revenue margins as it is more beneficial for the company to fund individual medium-sized startups for potential acquisitions.
Accelerating fintech startups posses a different denotation than most investors or entrepreneurs assume. Acceleration of startups requires the accelerator or the parent investment firm to provide mentors, vision for startups, opportunities, investments, and financial advisers. On top of that, startups require various resources especially at its early stages to maintain their operations at the lowest cost possible.
Thus, it is difficult for established investment firms with explicit investment strategies to alter their programs to fund early stage startups. Octopus Investments is taking an approach that has not been exploited by investors before.
Instead of funding individual companies, it is starting out with a fintech accelerator program with a vision of filling the gaps in the fintech market today.
The timing of Octopus Investments could not have been more impeccable. The investment firm launched its accelerator program for fintech startups and entrepreneurs immediately after the U.K. government’s decision to boost the financial sector by introducing more startup-friendly regulatory frameworks and policies.
With fair and transparent regulations in place, Octopus Investments will house fintech startups to target every sector of the fintech market, including mobile banking, peer-to-peer lending, corporate finance, wealth management, and financial advisory.
“Our London-based accelerator program is overseen by a renown team of industry executives and leaders. Their close, personal mentorship specializes in guiding late-stage fintech startups into the marketplace,” explains Octopus Investments Director Sam Handfield-Jones.
The company further emphasizes that its fintech startups will receive crucial connections to the market such as major retail networks and fintech programmers to help test their platforms across many industries. More importantly, fintech startups will receive full services from the company’s legal experts that will guide startups through both local and international regulations for safe and compliant launching of fintech platforms and services.
“Our central London offices offers startups with an inspiring workspace, a targeted curriculum specific to their needs, access to a retail network of nearly 9000 customers and the help of our top-notch fintech programmers, designers and legal experts. It’s an exhilarating and unique program of cutting-edge financial technology that no other accelerator can offer,” Handfield-Jones adds.
According to the Outlier Ventures research team, 16.7 percent of the world’s blockchain startups are based in the United Kingdom. Interestingly, the research team states that the U.K.’s blockchain firms demonstrate the largest diversity in services and target industries, with blockchain firms working to merge fintech and other industries like real estate and insurance together.
Whereas, 38.9 percent of blockchain startups that are based in the U.S. are specifically focused on bringing fintech to the financial industry, which restricts the blockchain technology from being applied to a wide range of markets.
The U.K. fintech space has a significant advantage over its competitors like the U.S., as its startups offer diversity and unique services. With investment companies like Octopus Investments present in the UK, these extraordinary fintech startups can burst out of norm to implement their services and products to platforms and companies that are in need of blockchain-based decentralized networks.
The establishment of fintech accelerator programs sets a positive precedent for other investment firms in the fintech industry, The continuous emergence of fintech-focused investors will close gaps in the fintech market, which will lead to the emergence of more non-bank financial services and products in the near future.