Following last year’s launch of FinTech Innovation Lab, a new fintech accelerator has emerged in London, courtesy of a partnership between Barclays and Techstars. Similar to previous programs run on behalf of Nike and Microsoft in the U.S., the Barclays Accelerator is a three month bootcamp-style programme, “powered by Techstars”, but specifically targeting fintech startups — a first for the international accelerator.
It also means that Techstars now operates two accelerator programmes in the UK capital city, having launched Techstars London in February this year, the first Techstars outpost outside of the U.S. after it merged with Jon Bradford’s UK-based Springboard.
Though based in London’s Mile End, near “Tech City”, startups who meet the programme’s fintech remit — in particular with applications focused on improving the banking experience for consumers — can apply from anywhere in the world. Ten companies will be accepted in total, with applications closing on March 21st 2014, while the programme itself kicks off in mid-June 2014.
Barclays Accelerator startups get £12.5k of funding in return for giving up 6 percent equity, though it’s the value of the Techstars mentoring and business development support, and the programme’s ties to Barclays, that’s intended to be its biggest draw.
Specifically, mentoring will be provided by executives from Barclays, including Group Chief Information Officer, Darryl West, and Chief Design Officer, Derek White, alongside those from Techstars, including Jon Bradford, Managing Director of Techstars in London and David Cohen, founder and CEO of Techstars. The programme culminates with a Barclays Executive Demo Day and a Public Investor Demo Day in London.
There are also good commercial reasons for doing this, including being around smart people and innovation from the startup community.
It should also be noted that Techstars are the investors here. Even though Barclays and Techstars have committed to working together to offer six different accelerator programmes over three years, Barclays itself will have no direct ownership, interests, or options in the companies that enter its programme.
Instead, says Techstars’ Jon Bradford, the finance behemoth is “adopting a pay forward model”, which he thinks will ultimately create greater longterm value for Barclays.
“There are also good commercial reasons for doing this, including being around smart people and innovation from the startup community, business development and possible M&A/future investment/partnerships. But it is important to emphasis that all of the above is at the startups’ option and never Barclays.”
In terms of the kind of fintech startups that Techstars are on the look out for, or who might apply to the programme, Bradford says he thinks there will be companies from a broad spectrum of the financial industry and also companies who want early access to the Pingit platform, Barclays’ mobile payments app, as it opens up to developers.
“I’m sure it will appealing to a wide variety of companies who would like to partner with Barclays as well,” he says.
The idea of a major international bank paying it forward is an interesting development in context of the slightly uncomfortable relationship that London’s startups have historically had with the city’s financial sector. Higher wages paid for engineering talent by the banks has always been seen as creating a “brain drain” that many believe has held back the local startup scene.
However, after the global financial meltdown, in which London was particularly exposed, thankfully that’s begun to change.
Projects like the Silicon Milkroundabout job fair, and the general ‘cool’-factor of the East London ‘Tech City’ tech cluster, have also made a good case for startup life over working for a large financial institution.
Fintech, of course, plays to the strengths of both London’s financial district and the neighbouring startup cluster, so it seems natural to see the emergence of dedicated fintech accelerators in the UK capital.
Meanwhile, initiatives like CityMeetsTech are attempting to get the City of London banking community to actually invest in technology startups.
Image credit: Chris McKenna via Wikipedia.