We seem to hear conflicting things about the UK tech scene seemingly every day. One day we’re being told that everyone is going to leave the country (I coined the term ‘Brexodus’ but it hasn’t seemed to catch on) for pastures new, while the next we hear that London is still the "undisputed tech capital of Europe". All in all it’s a bit confusing. The latest news however is a tick in the latter column, as Sky News has reported that one of Facebook’s earliest backers has increased his stake in British financial technology pioneer TransferWise.
According to the report, prominent Silicon Valley investor, Andreessen Horowitz, has agreed to invest a whole load of cash in the fintech firm. He’s apparently agreed to the purchase of a chunk of shares in recent weeks at a valuation broadly consistent with TransferWise’s last major fundraising in May 2016.
TransferWise, for those of you who are unaware, is a website that allows users to send money using real exchange rates for a nominal fee. It was set up by two former Skype employee and has grown rapidly since its launch, now processing hundreds of millions of pounds of transfers each month.
In recent times, the firm has undertaken an aggressive international expansion, with investments from the likes of Richard Branson and Edinburgh-based fund manager Baillie Gifford. This has seen the company launch into markets including China and Sri Lanka, while also signing a partnership with Number26, a start-up which enables users to open a bank account within eight minutes.
The success story has been somewhat tarnished by a fine from US authorities which found that the company was operating without the correct licence, and it was forced to modify its advertising claims in the UK. In spite of this, the firm is one of relatively few British technology companies to have achieved what’s referred to as ‘unicorn’ status – reaching a valuation of more than $1bn (£800m).
A TransferWise spokeswoman said: "Some of the early angel investors have sold some of their shares and those were bought by existing investors including Andreessen Horowitz who wanted to increase their investment.
"We don’t share the detail on the size of their investment."
So what does this mean for the channel?
In reality, not a whole lot. Fintech isn’t really anything to do with the IT channel, and the amount of money being made by the now-international company isn’t a huge indicator of the overall success of the British tech scene.However, what can be seen from not only this, but also Snapchat’s recently announced intentions to set up shop in the UK, is that investors are not being scared off by Brexit.
This news comes at the same time as other European start-up hubs such as Berlin and Amsterdan have been vocally looking to poach business from the UK. A huge investment from Silicon Valley in a UK-based company flies in the face of uncertainty about visa restrictions and single market access in the wake of the Brexit vote.