Silicon Valley Bank’s EMEA head Erin Platts on the European fintech scene and whether the UK ecosystem can thrive after Brexit.

Erin Platts

The Covid-19 pandemic certainly hasn’t taken the shine off the fintech space; in fact, European fintech was by far the most funded sector in 2020, attracting $9.3bn in venture capital investment, according to Atomico. “It’s remarkable how resilient the European fintech sector, and the innovation economy more generally, has been,” says Erin Platts, head of Europe, the Middle East and Africa and president of the UK branch at Silicon Valley Bank (SVB), which provides financial services to innovators and their investors.

Career history: Erin Platts  

  • 2019 Silicon Valley Bank (SVB), head of EMEA and president of the UK branch
  • 2018 SVB, head of relationship banking, Europe
  • 2016 SVB, head of commercial banking, UK
  • 2013 SVB, managing director, commercial banking

Mega-rounds have comprised much of the funding uptick in 2020, says Ms Platts, pointing to UK-headquartered Checkout.com’s recent Series C round as a prime example. The payments solutions provider raised $450m in January and is now valued at $15bn, making it Europe’s most valuable venture-backed fintech.

However, she also notes that the pandemic has continued to bifurcate the market. “Covid has highlighted how expensive and complex some of these business models are and how difficult they are to scale. It’s created a division between the haves and have-nots within fintechs,” she says.

Sectors to watch

The winners in 2020 go beyond those providing front-end financial services. For example, the shift to working from home has accelerated the need for middle- and back-office process automation. “Covid has uncovered the need for not just innovation on the front end around customer pain points,” Ms Platts says, “but the less sexy back office automation space. This space had a great year and I predict that 2021 will be even better.”

Regtech is another sub-sector that has done well, she says, pointing to identity verification startup Onfido, which raised $100m in April, and financial crime platform, ComplyAdvantage, which raised $50m in July.

“The other popular buzzword is banking-as-a-service, or embedded finance,” she adds. “The innovation there will allow a faster and simpler route to market for many more companies to add financial services to a traditionally non-financial service or product.”

Covid has highlighted how expensive and complex some of [fintech] business models are and how difficult they are to scale

Erin Platts, Silicon Valley Bank

She believes that market consolidation is on the cards for 2021, particularly in the retail banking and product space. “We will see much more M&A activity, whether challenger banks or single-product companies that are struggling with the continued lockdown and ability to expand from a product perspective,” she says. “Some will be gobbled up by an incumbent bank, or even a challenger bank that is looking to double down in certain segments and accelerate that product expansion and income stream story.”

Beyond Brexit

Ms Platts is convinced that this year will see greater levels of European fintech investment than 2020, even with Brexit, because there is a lot of pent-up demand from UK and European investors, as well as US-based funds.

But while plenty of money is available, the number of rounds has gone down. “I am keeping an eye on new company creation, which concerns me more than capital amounts for the future health of the UK and European innovation economy,” she says. “This is an important leading indicator which could derail the potential for continued growth.”

A self-confessed optimist, Ms Platts believes that the UK’s innovation ecosystem will continue to thrive. “But the UK needs to get a few things right in order to ensure that it can reach its potential and not inadvertently push innovation ... outside the country,” she says. “For example, access to talent continues to be the number one issue that our clients raise globally, and is the greatest indicator for success.”

She points to positive initiatives around a UK technology visa, but argues that a special permit should cover a broader talent set. “To have a leading innovation economy, you also need great sales, marketing and finance talent, etc,” she says. “If we can get that right, then there’s no stopping us from continuing to realise impressive growth over the next decade.”

Talent acquisition must include ensuring diversity, equity and inclusion (DE&I), which is an acknowledged issue in the fintech community. “Regardless of Brexit, there’s an expectation and obligation to make more progress on DE&I,” Ms Platts says.

Client support

SVB has gone back to basics during the Covid-19 pandemic. While it increased digital thought leadership and connectivity through webinars and platforms like Zoom, the real value-add came from “old school” relationship management. “Sitting down with chief executives and chief financial officers and helping them navigate a complex, fast moving and, for many of our clients, high-risk environment, went a long way,” Ms Platts says. “In addition, being a consistent partner and lender through Covid has created a lot of goodwill.” The bank also brought to bear its global network remotely to address clients’ networking constraints.

In 2021, the bank is looking to partner more with its clients. For example, it is on the cusp of signing one of its healthtech clients to help in mental health and wellbeing, employee engagement and DE&I. “We are looking to be not just providers of services to our clients, but consumers of their services and products as well,” she says.

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