Tech Center: Leeds Capitalizes On Its FinTech Growth

London isn’t the U.K.’s only FinTech powerhouse. Tucked away in northern England, Leeds is using its fast-growing FinTech sector as a springboard to gain recognition as a global tech center. In this week’s Tech Center tracker, Sean Mallon, CEO of Bizdaq, joined PYMNTS to discuss how the financial capital of the North is growing in strength.

Before we jump into the post, here are a few quick facts about Leeds and its tech scene:

Leeds is considered to be the largest U.K. city for financial sector employment and other business services outside of London.

Finance and business services account for 38 percent of total output.

The leading benefits of Leeds for local digital tech businesses are access to commercial property, local networks and graduate talent.

According to the Tech Nation 2016 report, there were 23,734 digital tech economy jobs available last year in Leeds.

Over the last decade, more than £4 billion was invested in large-scale development projects in Leeds, with another £5.8 billion worth of development either in progress or in the pipeline.

The city’s Business Growth Program supports grant funding ranging from £10,000 to £50,000 for new or established businesses either based in Leeds or planning to relocate to the region.

Leeds may finally be ready to step out of London’s FinTech shadow.

The city, which is the U.K.’s second banking center and home to more than 30 national and international banks, is looking to expand the growth of its already strengthening FinTech sector. With it already being home to many large players in the FinTech space and several leading universities, the city may be ready to truly capitalize on its FinTech opportunity, Roger Marsh, chair of the Leeds City Region Enterprise Partnership, recently posted in a Huffington Post blog.

There’s also been a significant push to help support funding for digital technology within the region.

Just last week, an £8.5 million Digital Enterprise Program was launched to help eligible small and medium-sized enterprises (SMEs) invest in digital technologies or advance digital skillsets in their effort to grow and scale. These investments can be made for things such as upgrading a website or even acquiring new hardware or software.

“A recent IPPR North report into the role of SMEs in building a digital powerhouse highlights that small businesses often see investment in new digital technology as risky because of the costs and time involved, particularly as many small businesses are likely to be extremely time poor,” Cllr James Lewis, deputy leader of Leeds City Council, explained.

“This new business support aims to take away some of that risk and help save time. With financial support available and a hands-on approach from our digital advisers, businesses will be supported to find the right support to help them grow.”

Sean Mallon, CEO of Bizdaq, an online marketplace for buying and selling a business, told PYMNTS that, while the startup ecosystem in Leeds still has plenty of room to grow, there are many advantages to starting and operating a business in the northern city.

Here is an excerpt of the conversation.

PYMNTS: Can you describe the tech community in Leeds?

SM: The Leeds startup scene is still in its infancy in truth, especially compared to the likes of Manchester and Newcastle; however, the past 24 months have seen a tech scene emerging. Startup incubators like Futurelabs have become a catalyst for tech innovation in the city. Led by successful tech entrepreneur Steve Wainwright, Futurelabs has launched regular founder events and a monthly publication focused on startups. I’ve also seen an increase in hackathons through associations with the city’s two universities — something that we’re planning to engage in this year.

PYMNTS: What do you think makes Leeds an attractive location for both entrepreneurs and investors? Is there anything people may find surprising about operating a business there?

SM: Leeds has two excellent universities that feature large computer science and business departments that provide thousands of high-quality candidates for local businesses every year. Indeed, the student population of Leeds is close to 60,000. With the tech scene in its infancy, I’d say that the opportunity for tech businesses is significant as the talent pool is so large. Away from the universities, Leeds is dubbed the financial capital of the North with a large financial services sector.

Leeds has some great office space around the Clarence Dock, Holbeck and Calls area of the city that would be particularly attractive to entrepreneurs and investors — with rent that is probably a tenth of the cost of similar space in London.

PYMNTS: How does the startup and tech scene in Leeds differ from other cities in Europe?

SM: Compared to the likes of London and Berlin, the Leeds tech scene is only really taking shape and is yet to anchor to one area of the city as is typical in other cities. However, Leeds is particularly well-represented with a high concentration of digital marketing agencies across the city.

PYMNTS: What are some of the challenges facing startups in Leeds? Are there any initiatives to help address those barriers?

SM: Talent drain to London is the biggest challenge for the city. The U.K.’s investors and the vast majority of startups are still concentrated in London. However, I’d say that I can see this changing in the coming years as the startup scene disperses across the country — in a similar way to how we’ve seen the establishment of tech scenes in North America away from the traditional Silicon Valley and San Francisco.

PYMNTS: How has the startup ecosystem in Leeds changed in recent years? What do you think has sparked this transformation?

SM: Leeds has really transformed as a city in the last decade. Continued investment in the leisure industry in the city, with the retail and night scene booming, has really made Leeds an attractive city to live. Additionally, the establishment of large tech-led workforces for the likes of Sky, Jet2 and Rockstar Games has created a growing focus on tech in the city and an established tech workforce.