XERO CEO: London's fintech scene is 'world class' and will stay that way post-Brexit
Rod Drury, founder and CEO of Xero, told Business Insider during a recent interview in London: "We love the fintech innovation happening in London, it's absolutely world-class. When you see the apps that are being built here, they will go global. We're really impressed by the quality of the finch thinking that goes on here."
London has become a European hub for financial technology - fintech - companies since the 2008 financial crisis. London boasts both a global finance hub in the City of London and Canary Wharf and a flourishing tech scene, centred around Old Street roundabout in East London, making it the perfect city for fintech.
Hundreds of millions of pounds have been poured into the sector in London and leading fintech companies that have emerged in the capital over the last decade, include small business loans marketplace Funding Circle, valued at over $1 billion, and online money transfer service TransferWise.
However, many fear that Britain's vote to leave the European Union could disrupt the growing sector by putting off investors and talent. Tom Blomfield, the founder of startup bank Monzo, told BI shortly after the June 23 referendum: "We had a gem here and I think we've just smashed it up."
Drury says he thinks London's fintech sector will survive the turbulence of Brexit, saying: "I think the UK is [a world leader in fintech] and I think it is for a few reasons. One, it's very dense. This is a world banking sector and it's very, very dense. You see it with the amount of fintech companies starting here, they get to scale quite quickly. The US is relatively fragmented. I think that's why the UK finch solutions are some of the top in the world."
He added that Xero hopes to become "the foundation of the next generation of fintech." Xero acts as a platform for other finance businesses to build their apps on top of. For example, London startups like GoCardless (direct debit), MarketInvoice (invoice financing), and Receipt Bank (expenses) all integrate with Xero to offer their services through the platform.
"We're the core system of record for a lot of fintech. A lot of fintech companies are great apps but it takes a long time and a lot of money to build a true platform."
Drury said Brexit hadn't changed Xero's plans for the UK, where it employs 172 people and has close to 200,000 customers. Drury says he expects the uncertainty surrounding Brexit to lead to more people setting up on their own, which should provide a boost for Xero.
Xero's UK MD Gary Turner added: "Brexit is kind of interesting but we've got a tonne of stuff to be getting on with anyway." He cited the Treasury's "Making Tax Digital" initiative, working with the UK's large number of startup banks, and helping more established banks modernise their back office as just some of Xero's UK priorities.
Microsoft recently announced that it will increase the price of its enterprise software in the UK following the collapse of the pound in the wake of the Brexit vote. Asked if Xero would similarly hike prices, Drury said: "We're still adding lots and lots of services. It's not a primary strategy to put up price.
"We've done a few little price things over the years. Really it's more about adding more and more value. Online accounting is more or less done in terms of the accounting, now we're moving to the front office and business apps, which we've already proved by all the add-on partners who are building new apps."