Manchester Fintech – Unlocking The Northern Powerhouse’s Potential
Continuing once again with my fintech series, this time I head to the north west of England and look at the Manchester fintech scene.
Anyone that follows the goings-on in fintech knows when it comes to UK fintech, London is the dominant city. According to Startups.co.uk Only 31 of the top 100 start-ups listed (In May of this year) were based outside of the capital. Even more, interesting, Devon based crowdfunding company Crowdcube broke the London scene’s monopoly (it took the crowdfunding platform just 16 minutes to raise £1.2m from private investors to help fund its expansion plans, read more on the story here). Ernst & Young stressed in one of their reports that regional centres are a must – so it makes sense that the city behind the Northern Powerhouse is ripe for fintech.
Back in May, AccessPay secured a £1m package from Barclays to support its growth, the first in the city to benefit from the bank’s new Innovation Finance product. Anish Kapoor, Chief Executive Officer at AccessPay mentioned in Finextra : We felt that the local Barclays team in Manchester demonstrated from the start that they fully understood our market proposition and drive to make business payments as easy as possible, recognising the potential of the business to achieve rapid growth. They also saw the huge opportunity to deepen the existing working relationship between the two companies. We are very excited to be going on this journey with Barclays.”
When it comes to fintech Barclays is a leader, mainly due to its Rise centres that work alongside the digital community. Their Manchester hub is one of seven globally, and the only UK branch outside of the capital.
One commentator mentioned that the Manchester fintech scene is still in its infancy and that it is fair to say that Leeds has been stronger, due to the fact that the Yorkshire city has a background of customer contact centres and back-end processing in finance.
Manchester Fintech in DueCourse
Image Source : DueCourse
A recent Manchester fintech case study found that hit the headlines is fintech start-up Duecourse who raised £6.25 million in angel funding.
According to Tech City News, the total investment includes £1.25m equity funding, and £5m of debt for lending to UK SMEs.
DueCourse launched their invoice software a year ago and is primarily aimed at SMEs who invoice clients on a regular basis. In a nutshell, the start-up uses it’s propriety risk engine to assess and unlock cash tied up in unpaid invoices.
Company co-founder and CEO Paul Haydock told Tech City News : “We saw the opportunity for a company to disrupt the market and help SMEs get access to the cash they need to fuel their business, in real time.”
In addition, he mentioned in Manchester Evening News that the company started because they realised traditional methods of finance are completely out of sync with what today’s SMEs need. They saw the opportunity for a company to disrupt the market and help SMEs get access to the cash they need to fuel their business, in real time. In addition, DueCourse wanted to be viewed as a new kind of cash flow utility – to put it simply, once a business has linked their accounting package for free, the invoice company is there in the background for them to access the money in their unpaid invoices whenever they need it.
Invoice trading is a popular tool for SME finance and according to the Cambridge Centre for Alternative Finance (CCAF), approximately 5015 SMEs used online invoice financing during 2015 so there is plenty of room for growth. DueCourse have stated that they expect to top £16.5 million in SME advances by the end of the year.
Manchester Fintech : Standing on the shoulders of giants
It’s fair to say a lot of firms have taken inspiration from the fintech scene in the capital and this form of disruptive form of tech seems to be of an opportunity rather than a threat.
However, there are challenges that remain, the need more for more infrastructure within the city as well as continuing to attract talented individuals hat can meet the pace of expansion will be a major area of focus.
Focusing more on the Northern Powerhouse will help transform another UK fintech centre, the likes of Tech North and Tech UK will help support companies that are dotted around the city by giving them the best advice, networks, support and inspiration they need to further the growth and success.