Leeds has become home to Dotforge, the first financial services technology (fintech) accelerator outside London.
Dedicated to fintech startup companiesin the north, Dotforge hopes to create more than 20 jobs in the first 12 months, and will invest £I.25m over 18 months. It is expected to create 60 new fintech jobs over next three years.
The programme has been supported by Leeds and Partners to help find investors for the accelerator and provide networking within the fintech market. Like London and Partners, Leeds and Partners works alongside the council to help raise the business profile of Leeds. The organisation works with key private and public sector partners to attract investment and drive economic growth – helping to create and sustain jobs and employment opportunities in the region.
The Dotforge programme aims to be up and running from early 2015 and will deliver three tranches of investment and support over the next three years. It will start by looking for 10 businesses to receive £50,000 of first-round investment, with the potential for up to five to receive a further £50,000 to support their second round of investment raising.
The companies are then expected to attract a further £1m of funding from other investors in the first 18 months of the programme.
Our agenda is to build six accelerators across the north
Dotforge co-founder Lee Strafford said: “Our agenda is to build six accelerators across the north and to build and connect the technology and investment community. We want to connect the supply chain of talent across the whole of the north to add value.
“The two logical verticals for Leeds are absolutely fintech and medtech or digital health. The reasons we’re choosing Leeds is because there are a number of head offices here. But, just as importantly, it has the back offices as well. So the access to industry and the access to the people who are trying to solve some of the industry problems are here. What we are going to be looking for are individuals and teams to solve those problems.”
At the beginning of the month, Computer Weekly asked whether fintech companies could survive outside London’s booming financial services sector. Experts have mixed views on whether this is possible, but Russ Shaw, founder of Tech London Advocates, said the HS2 and possible HS3 future rail networks could make a faster connection between the north and south that could lead to a fintech hub emerging in the north over the next decade.
Shaw said Leeds has a history of banking and credit agencies and he has noticed a number of fintech companies growing in this area. He said it will be areas like Leeds with existing talent pools that will produce the best home for these fintech startups.
“Those cities will have talent and skillsets that understand financial services really well,” he said. “Because those experts are on the ground, the companies will follow where the talent is going.”
But Shaw added that he didn’t expect Leeds to become as big or as vibrant as London. “I wouldn’t expect Leeds to replicate London, but if the two cities are connected, that’s a good thing.”
Peter Cunnane, economic development officer at the City of London Corporation, added: “The fintech industry needs the right ecosystem to thrive: a centre for financial services, leading academia and strong civic leadership. With these three components, there’s no reason why the Leeds city region cannot become a global hub for fintech.
“The region can provide access to market through the high number of banks and building societies based in the area and, with growing technology and digital sectors, as well as a wealth of understanding and knowledge around the financial market, the Leeds region is a natural choice for fintech.”