Establish the factors specific to fintech startups

This pillar of research is led by Reji Joseph and supported by Thankom Arun, Sachin Chaturvedi, Sheri Markose, K. J. Joseph, and Priyadarshi Dash.

We need to establish the factors specific to FinTech start-ups that influence their ability and appetite to trade internationally. Research into innovation and start-ups will provide important background to this study since many FinTech developments are devised and initially exploited by start-ups. Amongst the most successful so-called ‘unicorns’ (start-ups with a valuation over $1 billion), 6 out of 13 UK unicorns are classified as FinTech companies, although in India it is only 3 out of 21 (Hurun Research Institute 2019). This suggests there may be important differences in the FinTech environments in the two countries, at least for the very largest start-ups. More generally, start-ups tend to operate at the higher end of the innovation value chain (Joseph and Arun 2019). There is limited evidence around supporting FinTech firms to expand overseas, in spite of a majority of UK firms aspiring to internationalise (EY 2016, 58).

With the emergence of new technologies, start-ups have received much attention in the policy deliberations. India and UK are reported to have the third and fourth largest start-up ecosystems globally. Capturing the differences in dynamics would be of help in developing a more informed understanding on the implication of FinTech on cross-border trade and investment.

Although India has the third largest start-up innovation ecosystem, a major constraint facing it is the financing of start-ups. Data on major investors in Unicorns provided in Hurun’s report shows that most of the investors are from the US, followed by China and Singapore. Understanding the factors behind this, and the potential for UK investment, would be an important sub-component of this area of our study.