28 September 2018

Fintech innovation gets a legal boost

Investment fund 2018 winners announced by Simmons & Simmons, offering legal support as fintech comes to a tipping point.

Simmons & Simmons has announced the businesses that will make up the third cohort to receive support from the firm’s fintech fund. The four businesses operate in the artificial intelligence, insurtech and peer-to-peer fields.

Legal support

Launched in May 2016, the fund supports start-up fintech businesses through the various legal challenges they can face in their early stages with £100,000 set aside and free legal advice, taking the firm’s total investment in the sector to over £300,000. Angus McLean, partner at Simmons & Simmons and head of the firm’s international fintech team, said 2018 looks to be a milestone year for the UK FinTech, stating ‘the Financial Conduct Authority’s consultation on the loan-based crowdfunding regime, following the publication of its long-awaited post-implementation review of the UK’s crowdfunding regulations, will have a material effect on the direction of the peer-to-peer industry in the UK. The UK authorities also look poised to intervene in the crypto-asset sector for the first time, with new regulations in that area looking highly likely.  Challenger banks and FinTechs focusing on the SME market are also vying for a share of the £775million fund that is now available as a result of the European Commission’s recent approval of the Royal Bank of Scotland’s ‘Alternative Remedies Package’.  The appetite of the public markets for the UK FinTech sector is also being tested in earnest for the first time.’

Tipping point

The four winners of the 2018 FinTech Fund are: Marshmallow, a technology-first car insurer for international drivers; Axyon AI, which collaborates closely with data scientists at the University of Modena in Italy, providing predictive solutions focussed on asset allocation strategies and the syndicated loan market; EdAid, which offers increased access to education enabling students through interest free loans; and, Nimbla, which provides micro-insurance that protects small business and caters to the unbundling of financial services. Mr McLean explained, ‘we are at a tipping point in the development of the fintech industry in the UK.  We look likely to see the most significant regulatory changes targeted at the nascent sector to date at the same time as the industry deals with the ongoing uncertainty over Brexit.’