European fund offers chance to create Fintech powerhouse in Scotland

Financial services firms and technology start-ups are being urged to use  Scottish Enterprise's new £200 million programme to help fire growth in the fintech sector.

Picture: Shutterstock
Picture: Shutterstock

The Scottish-European Growth Co-Investment Programme (SEGCP) leverages private sector investment and is aimed at SMEs (small and medium sized enterprises) and mature start-ups that are keen to reach the next level of growth.

Kerry Sharp, director of the Scottish Investment Bank - which manages SEGCP - said the programme offers a key opportunity for Scottish firms to establish themselves in the high-value Fintech (Financial Technology) niche, which was likely to be crucial to the development of financial services in the decades ahead.

“Fintech is a very exciting sector for Scotland, said Sharp.

"Scotland is uniquely placed to become one of the top fintech destinations in the world.

"A fast growing fintech community, strong established financial firms, world class universities, great facilities and a supportive public sector mean that our fintech ecosystem is second to none.

“We are supporting a number of existing Fintech companies be investor ready. But we also see opportunities to work with sectors such as asset management and financial services, which have a need to be more Fintech oriented. That’s why SEGCP is a particularly interesting opportunity, not just for the money, but but the contacts and connections and expertise that can also be available. We know that the more help and support companies can get on their growth journey, the more they will succeed.”

SEGCP is a partnership between Scottish Enterprise and the European Investment Fund (EIF), which was formed after the Scottish Government recognised the need for later stage investment capital and provided funding through the Scottish Growth Scheme. Made up of £50m from each partner, eligible firms can typically get up to £10m matched funding if they also have private investors on board. To help with this, SEGCP works with a Europe-wide network of fund managers, supported by the European Investment Fund,who are set to bring at least a further £100m to the table. This gives a total pot of £200m available for Scottish businesses plus a wealth of expertise.

SIB has already held an initial round of meetings with a number of the 300 or so fund managers involved with the European Investment Fund, putting Scotland on the radar of many investors who had not previously been familiar with the business landscape. As well as a number of fintech focused investors, there are also many general technology investors who are interested in the fintech space.

Kerry said: “It’s been a great opportunity to show European investors that Scotland is a very exciting place to be. There is a lot of interest, especially as many feel that valuations in the biggest economic hubs, such as London, are getting too high. They are interested in a number of sectors which Scotland is already known for, such as life sciences or technology. They also know that we benefit from a supportive business environment a strong business ecosystem and some top University talent. But many are also just looking for good opportunities - and as Fintech is so investable at the moment, this represents is a unique opportunity for this sector to truly take off in Scotland.”

Funding from SEGCP is not limited to Fintech: any SME with growth aspirations and a need for capital can apply. The programme is even attracting attention from firms outside of Scotland that would use the funding to set up new operations north of the Border, although SIB stresses only those with a real commitment to the region will be considered.