I’ve been sitting on a story idea for some time: the role accelerator programmes have in the wider fintech ecosystem. It is fair to ask why this feature has been held in limbo for quite as long as it has. There are a number of reasons.
In 2015, I embarked on an odd adventure where I took up the managing director role at the London outpost of Startupbootcamp Fintech. It was by far the strangest, most difficult — educational in a way I hadn’t anticipated — work experience of my life.
I was Alice walking through the looking glass to a world where nothing made sense, and where everyone spoke a language I didn’t understand. Through trial and error, I slowly became fluent in the language of start-up culture — lean, agile, product market fit, hockey stick growth, valuations and exits.
I had a new toolbox of words and phrases I could use to express my frustration with an industry that promised one thing (business model acceleration, commercial partnerships with brand-name banks and firms), but was primarily interested in something else entirely (returns on investment and exits).
Because of this experience I formed a number of “opinions”. My views were so strong that I felt my abilities as a journalist to report on the impact of accelerators on the wider fintech ecosystem would be unduly influenced by my own biases and prejudices. I let the topic fester in the “ideas” folder on my laptop and went about my working day.
However, a few things caught my eye recently.
A few weeks ago, Whitecap Consulting, Streets Consulting and Innovate Finance released the Scaling UK Regional Fintech report. The report surveyed 250 regionally based fintech companies to find out how they grew and what lessons could be learned.
There are a number of interesting statistics in the report. One is that firms with female founders achieved annual turnover growth of 30 per cent or more compared to their male-led counterparts — but only 16 per cent of firms had a female founder. And the average age of founders at inception was 38 years old.
However, this finding stood out to me: nine out of 10 firms that attended an accelerator went on to raise funding. In fact the report recommends that fintech start-ups join one of these programmes, saying: “Companies which were part of an accelerator raised investment more successfully; the coaching, guidance and contacts within accelerator cohorts can provide assistance as organisations scale.”
This confirms, in my head, that when accelerators are about funding, access to investors, with a focus on ROI and exits, they work. For this reason, long-standing start-up accelerators, such as Y Combinator, are considered the gold standard for many in the general tech industry.
However, I was more interested in those aimed at fintech firms that were run by either a single bank or a consortium of banks. In 2015, Startupbootcamp Fintech London was funded by partnerships with Lloyds Banking Group, Rabobank, Intesa Sanpaolo and Mastercard, among others.
Today many banks are in the fostering fintech start-ups game. Barclays in the UK has for many years been involved in long-standing start-up activities via their Rise division. Banks ranging from Bank of America and Morgan Stanley to Lloyds advertise a range of programmes from feedback sessions, mentoring activities and full-service accelerator programmes.
Recently Tamara van den Ban, customer propositions director at Lloyds Banking Group, spoke to me about Launch 2024, a five-month programme run by the bank, for anywhere between 18 and 24 fintech companies who qualify for the programme.
Starting on May 20, the bank will look for fintech start-ups who can solve one of five strategic business challenges. Those include helping customers through their life moments, helping customers with their everyday lives, optimising customer experience across channels, leveraging technology to enhance internal risk control, and increasing customer understanding of their finances through gamification.
These companies need to have a minimum viable product, but it does not need to be live or to have been previously tested with customers, says van den Ban.
Lloyds claims that “Launch 2024 provides focused activity towards fuelling individual and business growth through commercial experiments” and will have support from “senior stakeholders and subject matter experts within Lloyds Banking Group”.
However, van den Ban does say that “at the end of the programme, successful companies will complete a commercial experiment with [the bank]; any companies who are not successful in securing an experiment will be entitled to comprehensive feedback from senior stakeholders”.
Notice how van den Bank mentions “commercial experiment” rather than commercial relationship. That end goal, the commercial relationship, is what I am interested in. Most fintech companies I have encountered that join programmes with well-known financial institutions as partners are looking for a commercial partnership. Fintech firms who obtain this elusive prize can then use that top-tier bank logo on pitch decks for future funding rounds — the logo serving as a seal of approval, a risk marker, illustrating for potential investors that this company is solid, sustainable and, more importantly, can work well with the customer base they sell into.
Lloyds expects a number of participants to secure a commercial experiment at the end of Launch 2024. “The number of experiment contracts available is not fixed; each experiment proposal is considered individually, with relevant stakeholders choosing whether or not to take the proposal forward,” says van den Ban. “In the last two years of the programme about one-third of the cohort went on to secure a commercial experiment.”
The Launch programme started in 2021, and about 50 fintech and insurtech companies have come through the programme. “Over half of these progressed through to the ‘Craft’ phase, which is a bespoke process to refine experiment design and confirm feasibility,” says van den Ban. “One of our successful candidates, Caura from the Launch 2022 programme, has gone on to receive a £4mn investment from Lloyds Banking Group Fintech Investment team.”
This is my ask: I want to hear from some of these fintech founders and fintech companies. I’m looking for real stories: the good, bad and the ugly.
- Why did you choose an accelerator run by a bank?
- What were your end goals as a founder?
- Did the accelerator meet those goals?
- What were the major benefits for your company?
- What frustrated you about being part of this programme?
Please get in touch; I would love to gather up some founder stories to find out the real truth, not just the PR promotion, of how much accelerators support and grow the global fintech community.
Liz is deputy editor of The Banker. You can connect with Liz on LinkedIn, or follow her on Bluesky.
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