LONDON (Reuters) - Money transfer company Transferwise will move its European headquarters from London to the continent by March 2019, it said on Wednesday, in a blow to Britain as it seeks to hold onto its position as a global hub for the developing fintech sector.
CEO Taavet Hinrikus, who co-founded the company in 2011 in London with fellow Estonian Kristo Kaarmann, told Reuters that the new European office would be set up by March 2019, in time for the end of two years of divorce negotiations between Britain and the European Union.
The global headquarters would remain in London, where the company employs around 120 people, because the UK is its biggest market, Taavet said. But if it was setting up the company now, it would not chose Britain.
“Uncertainty means that maybe if you’re building the next fintech business you shouldn’t build it in London today, until everything clears up again and we understand what’s going to happen with access to talent and so on,” he told Reuters on the sidelines of a government-sponsored fintech event in London.
Since last June’s vote to leave the EU, other financial and technology centres such as Berlin, Frankfurt, Dublin, Paris and Amsterdam have been touted as potential challengers to London as the main hub for European fintech.
A study by Deloitte this week, though, found that London remained the global number one, for now, along with Singapore.
Transferwise has not yet decided where its new European office will be, Hinrikus said, although it was considering the “usual suspects”. The new headquarters would provide jobs that would otherwise have been in Britain, he said.
The main reason for the move was the loss of passporting rights, which give EU companies unfettered access to all of the bloc from a single base.
The company, which is valued at more than $1 billion, is backed by several high profile investors, including Silicon Valley venture fund Andreessen Horowitz, Virgin Group founder Sir Richard Branson, and PayPal co-founders Max Levchin and Peter Thiel.
Customers in more than 50 countries send roughly $1 billion through its website every month.
Hinrikus was speaking at a conference that featured speeches from Bank of England Governor Mark Carney, who said regulators needed to take a light-touch approach to the fintech sector, and UK finance minister Philip Hammond, who said it was important that Britain did not “rest on (its) laurels” when it came to keeping its competitive edge.
“They’re all saying the right things but it’s one thing to talk and another thing to deliver,” Hinrikus said.
He thought London would probably remain a fintech hub for the time being, but had to make sure it was able to attract foreign talent. And the lead Britain’s regulators had shown in taking a light-touch approach and starting “sandboxes” for start-ups was being copied elsewhere, meaning the country had to do more to keep its edge.
Reporting by Jemima Kelly; Editing by Huw Jones and John Stonestreet