Fintechs fear funding issues in post-Brexit UK

UK based Fintech firms remain uncertain of the future following the UK’s EU referendum result.

In the wake of Brexit panic, several Fintech companies are worried about funding following the UK’s exit from the European Union.

Rhydian Lewis, CEO and co-founder at peer-to-peer lending company RateSetter, said: “Even now, no-one is quite sure precisely what Brexit will entail, so it’s difficult to say with certainty what impact Brexit might have on our industry or the wider economy”.

Several external commentators have also offered their opinions on how the Brexit will affect overall startups in the coming months. Philip Rooke, the British CEO of Germany-based graphic design company Spreadshirt, said in an opinion piece this weekend: “There will be immediate consequences in the UK online business sector as investors choose to put their money into mainland European businesses rather than a UK business. A tighter border will make it much tougher for UK businesses”.

Rooke claimed that uncertainty is already slowing down investment and UK-based companies are going to face serious complications because of isolation in a global market.

Zopa, Europe’s largest peer-to-peer lending company, claimed that the referendum will have serious impact on not only the fintech industry but the economy as a whole. “We expect the economic environment to be uncertain over the coming months. In periods of uncertainty, we prefer to be cautious. As a result, we have tightened our underwriting standards. “

Some experts however, are arguing that the referendum has not had a serious effect on the Fintech industry at all. According to an analysis by Business Insider UK, British fintech startups have seen at least £40 million of new investment since the referendum announcement.

Some CEOs are even claiming that Brexit will have little to no effect on the industry as a whole.

 Jeff Lynn, CEO & co-founder at fintech investment company seedrs, said: “We haven’t seen a notable slowdown since the referendum in spite of fear mongering around the country. The UK is still attractive and safe for investment and will continue to be one of the number one destinations for entrepreneurs to set up a business with its favorable tax reliefs, streamlined business incorporation and simple transport abroad.”