Ten London start-ups have made inquiries about moving to Berlin since Britain voted to leave the European Union, business development group Berlin Partner said on Monday.
Along with other European cities, Berlin is jostling for a piece of London’s financial technology industry and has stepped up efforts to promote the German capital as an affordable and creative alternative to other centres.
The fintech start-ups that have made inquiries employ between 10 and 18 people each and have expressed interest in matters such as commercial property prices, the local labour market and accommodation availability, Berlin Partner Director Stefan Franzke said.
“The most concrete inquiries are coming from London fintechs. They are considering a move to Berlin so as not to lose access to the European single market,” Franzke told a news conference.
Berlin’s Senator for Economics, Technology and Research, Cornelia Yzer, has sent hundreds of letters to British businesses and has travelled to London Fintech Week to lobby start-up founders.
“There is no doubt these companies will be interested in being in the European Union,” Yzer told Reuters at Fintech Week.
More than a hundred companies have been in touch with Berlin since the Brexit vote, though not all fintech, and the German capital will open a London office in September, she said.
“Berlin is a boom town for companies focusing on fintech. Every 20 hours a new start-up is created … There is no need to speak German,” Yzer said.
Rajesh Agrawal, Deputy Mayor of London responsible for business, told Fintech Week that the UK capital is a thriving fintech sector but acknowledged the challenge posed by Britain’s Brexit vote.
“The outcome of the EU referendum is bad news for London and for fintech, it’s not what we wanted,” Agrawal said. “We are very clear about what we need. We need access to the EU single market and protection of our passporting rights,” Agrawal said.
Maintaining passporting rights for British firms to offer services across the EU must go hand in hand with allowing EU citizens to work unhindered in Britain, EU leaders have said.
Eileen Burbidge, Britain’s fintech envoy, said the UK government will re-evaluate its fintech support programmes but she expects passporting rights to be maintained.
“Even in the worst case, where people have to get a second licence to operate in other European countries … it’s not a deal breaker, it’s not going to stop momentum,” Burbidge said.
Berlin attracted almost 2 billion euros (£1.6 billion) in venture capital investment in start-ups in 2014, outpacing London, Ernst and Young said in a report last year.
The German capital has about 100 fintech start-ups, including German mobile financial services firm Number26. Affordable living costs, access to talent and the widespread use of English are among its advantages, Berlin Partner’s Franzke said.
Berlin Partner has launched a website in English and will open a pop-up lab in London in October to try to woo more companies, but Franz said he also expects interest from further afield as start-ups that were interested in London now look elsewhere.
Source: Reuters (By Caroline Copley and Huw Jones, Editing by Mark Potter and David Goodman)