British Patient Capital chief praises Kalifa Review ahead of upcoming anniversary
British Patient Capital chief executive Judith Hartley has praised the Kalifa Review ahead of its upcoming one-year anniversary as an “important milestone” in the development of the UK’s fintech sector.
On 26 February last year, the independent review into the UK’s fintech sector, commissioned by the government, and led by Ron Kalifa OBE, found that increased government support, growth funding and regulatory sandboxes could lead the UK to the top of the global fintech league table.
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Kalifa outlined several recommendations which could help to create highly skilled jobs across the UK and boost trade, including the creation of a £1bn fintech ‘growth fund’; a ‘fintech scale-up’ visa route for specialists and a ‘scalebox’ to provide regulatory support for growing firms.
Hartley (pictured) said the review ensured the UK can retain its position as the fintech capital of Europe and the past year has been “exceptional” for UK fintech with “phenomenal levels” of investment.
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“The launch of the Kalifa Review was an important milestone in the development of the UK’s fintech sector, acknowledging both the important role the sector is playing in the economy and ensuring the UK can retain its position as the fintech capital of Europe,” Hartley said.
“Over the past year, we have seen considerable market activity with phenomenal levels of investment. In our own underlying portfolio, we saw banking software developer Thought Machine and insurtech business Zego become unicorns in 2021, and digital bank Revolut became a decacorn when it was valued at $33bn (£24.4bn) in a funding round in July. By any measure, it has been an exceptional time for UK fintech.
“But structural issues remain. While funding nearly doubled in 2021, the majority of private market capital continues to come from outside the country, with UK institutional investors in particular being reticent when it comes to investing in domestic innovation.
“By not investing in UK venture and venture growth funds, UK institutional investors are failing to capture the value being created by fast-growing businesses operating in some of the most exciting and dynamic sectors in the economy.
“The UK has a history of innovation in the finance sector, and many of our current generation of home-grown start-ups and scale-ups are poised to become global leaders in financial services. Yet, in order to do so, access to capital is crucial.”
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Hartley said that British Patient Capital has deployed over £1.3bn since its inception in 2018, and while it is sector agnostic, a significant portion of its underlying portfolio companies are in the fintech space.
“By taking a long-term patient capital approach, institutional investors can fuel the growth of the UK’s most promising and innovative fintech companies, capture the value they create, and help ambitious entrepreneurs on their growth journey,” she added.