In the wake of the Brexit, European financial hubs are competing to attract London-based firms looking to relocate in order to ensure the stability of their operations. If the true impact of the Brexit on the Fintech sector cannot be accurately predicted at this point, actors like money-transfer and payment companies might be tempted to move from London to another European city, which could guarantee a more stable political environment.
In the words of Valérie Pécresse, President of the Ile de France Region (in which Paris and the financial district of La Défense are located): “The sensible choice [for businesses] is not to stay in a land that could leave Europe one day, but to make a choice to invest long term in a land that will always stay in Europe.”
Consequently, countries all over Europe aim to attract talents and businesses seeking a more stable footing within the European Single Market. But few have been as vocal as the French trying to convince Fintech companies to cross the Channel and establish themselves in Paris. Jean-Louis Missika, deputy mayor of Paris, for instance stating that he “will be rolling out the red carpet” to welcome entrepreneurs and companies within the Parisian ecosystem. Moreover, in a recent interview Prime Minister Manuel Valls made a statement directed to international businesses that might consider leaving London: “Come and invest in France! […] We are working on schemes that could allow us to improve our attractiveness. I'm especially thinking of taxation and expatriates' status.” Among other advantages (extended tax deductions for foreigners in residence, creation of international schools…), Mr Valls mentioned plans to cut corporate taxes from 33 to 28 percent.
Paris doesn’t always naturally comes to mind as a potential Fintech hub; which is why French government agencies have already decided to publish leaflets listing reasons to choose Paris as a base for companies looking to enter the European market. For instance underlining the fact that “four French banks feature in Europe’s top 10, including two of the top three”, or that “the Paris metropolitan area is home to 12,000 startups”. And indeed, the Paris region is home to nearly 100 business incubators, including Le Cargo, Europe’s largest. Even bigger, the Halle Freyssinet is a structure set to open in January 2017, and that will be able to host up to 1,000 startups. Paris will then become home of the world’s largest incubator.
Despite relatively heavy operating costs, Paris is centrally located and has a well-connected infrastructure; and in its quest to claim London’s Fintech crown, Paris should be able to rely on the credibility of its financial services and the availability of talented employees. Overall, the Parisian financial marketplace is (self) described as “up to speed with new ways of financing SMEs, including private equity and crowdfunding”. A statement backed up by the presence of well established Fintech firms, such as Younited Credit (formerly known as Prêt d’Union) a platform that allows private individuals and institutional investors to lend money through a secured bond marketplace. So far, Younited Credit has managed over €350 million in loans. Similarly, the acquisition of Leetchi/Mangopay by Crédit Mutuel Arkéa (one of France’s major banks) in 2015 illustrates the ties between established institutions and a disruptive sector. Leetchi started as a crowdfunding platform that allowed individuals to collect and manage funds for private events (birthdays, gifts, etc) and MangoPay was created when emerged the need for Leetchi to use a payment processing service provider that would comply with European regulations. Today, Leetchi is the leading platform in Europe on the ‘online money pots’ segment and MangoPay is the European leading payment solution for the sharing economy and online marketplaces.
However, only time will tell if France will be able to attract London Fintech firms: other countries like Ireland (with Dublin) and Germany (Frankfurt & Berlin) are also pursuing a similar objective - the strengths and specificities of their respective financial places making them serious contenders to the Fintech crown.
Consequently, countries all over Europe aim to attract talents and businesses seeking a more stable footing within the European Single Market. But few have been as vocal as the French trying to convince Fintech companies to cross the Channel and establish themselves in Paris. Jean-Louis Missika, deputy mayor of Paris, for instance stating that he “will be rolling out the red carpet” to welcome entrepreneurs and companies within the Parisian ecosystem. Moreover, in a recent interview Prime Minister Manuel Valls made a statement directed to international businesses that might consider leaving London: “Come and invest in France! […] We are working on schemes that could allow us to improve our attractiveness. I'm especially thinking of taxation and expatriates' status.” Among other advantages (extended tax deductions for foreigners in residence, creation of international schools…), Mr Valls mentioned plans to cut corporate taxes from 33 to 28 percent.
Paris doesn’t always naturally comes to mind as a potential Fintech hub; which is why French government agencies have already decided to publish leaflets listing reasons to choose Paris as a base for companies looking to enter the European market. For instance underlining the fact that “four French banks feature in Europe’s top 10, including two of the top three”, or that “the Paris metropolitan area is home to 12,000 startups”. And indeed, the Paris region is home to nearly 100 business incubators, including Le Cargo, Europe’s largest. Even bigger, the Halle Freyssinet is a structure set to open in January 2017, and that will be able to host up to 1,000 startups. Paris will then become home of the world’s largest incubator.
Despite relatively heavy operating costs, Paris is centrally located and has a well-connected infrastructure; and in its quest to claim London’s Fintech crown, Paris should be able to rely on the credibility of its financial services and the availability of talented employees. Overall, the Parisian financial marketplace is (self) described as “up to speed with new ways of financing SMEs, including private equity and crowdfunding”. A statement backed up by the presence of well established Fintech firms, such as Younited Credit (formerly known as Prêt d’Union) a platform that allows private individuals and institutional investors to lend money through a secured bond marketplace. So far, Younited Credit has managed over €350 million in loans. Similarly, the acquisition of Leetchi/Mangopay by Crédit Mutuel Arkéa (one of France’s major banks) in 2015 illustrates the ties between established institutions and a disruptive sector. Leetchi started as a crowdfunding platform that allowed individuals to collect and manage funds for private events (birthdays, gifts, etc) and MangoPay was created when emerged the need for Leetchi to use a payment processing service provider that would comply with European regulations. Today, Leetchi is the leading platform in Europe on the ‘online money pots’ segment and MangoPay is the European leading payment solution for the sharing economy and online marketplaces.
However, only time will tell if France will be able to attract London Fintech firms: other countries like Ireland (with Dublin) and Germany (Frankfurt & Berlin) are also pursuing a similar objective - the strengths and specificities of their respective financial places making them serious contenders to the Fintech crown.
About the author - Enzo Ramos
Born and raised in France, Enzo began working within Fintech in 2014, covering the regulatory changes than enabled the creation of French equity crowdfunding platforms for Lyon Place Financière, an association that regroups all actors of Auvergne-Rhône-Alpes’ financial place. There, he also worked on an exhaustive analysis of the regional stock market among other duties. Enzo has lived and studied in different countries, including the United States (Philadelphia & Monroe,MI) and France (Paris & Lyon).
Born and raised in France, Enzo began working within Fintech in 2014, covering the regulatory changes than enabled the creation of French equity crowdfunding platforms for Lyon Place Financière, an association that regroups all actors of Auvergne-Rhône-Alpes’ financial place. There, he also worked on an exhaustive analysis of the regional stock market among other duties. Enzo has lived and studied in different countries, including the United States (Philadelphia & Monroe,MI) and France (Paris & Lyon).
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