Paulina Sygulska of GrantTree on Brexit’s impact on the future of Fintech

In the wake of the Brexit vote to Leave, we asked London based FemTechLeaders to share their thoughts on the impact the results of the referendum will have on Fintech and Banking. This ongoing series includes extended interviews from those featured in American Banker, amongst others.

Paulina Sygulska, Director and co-founder at GrantTree

London, United Kingdom

@Payah | LinkedIn Profile

What do you think the short term & long term consequences for Fintech will be in the UK after the leave vote?

Short term - plenty of chaos in plenty of great fintech businesses. I heard from friends at a number of startups on Friday that they were under enormous pressure trying to cope with surge of activity such as consumers moving money out of UK accounts. Realistically, it is also very likely that fund-raising in the UK, particularly in FinTech, is dried up for the time being, until the uncertainty resolves itself. All the potential investors we know of are in a holding pattern, waiting to see what happens. This will impact the ability of new startups to get started.

Long term - many existing startups are, sadly, likely to either move elsewhere or at least start European offices. GrantTree Slack channels, normally quiet during the weekend, were bursting with links to articles on Brexit and ideas what we should to best prepare ourselves for what’s to come. An office in Ireland, Berlin or Paris was one of them. More worrying is the prospect that many startups that would normally have been started in London will instead start elsewhere, or not at all, as the fragile funding climate in London has been disrupted by this massive injection of uncertainty. London’s investment momentum has been halted - will it recover? Nobody knows.

How will the Leave vote affect the relationship between banks & fintech, and the appetite for collaboration?

GrantTree works with other tech & scientific companies. Pools of EU funding such as Horizon2020 we tap into are protected for at least two, and probably four years to come, regardless of the political situation. However, the overall impact of Brexit on EU funding available for technology and science definitely isn’t looking good as per the opinions of leading UK scientists, including Nobel prize winner Paul Nurse.

What is the best/worst thing about the result of the referendum?

Best: The UK’s political leaders are beginning to understand the amount of frustration, desperation and anti-establishment feelings across the majority of the UK population. This is a hard message to receive so it will take time for people to move from seeing the other side as manipulated fools and actually listen to their views and find ways to solve their grievances. But it’s essential, and a good thing, that this is now in the open and the bridge-building can now begin.

Worst: The tragedy of poorly directed “screw the system” anger (which actually, in my opinion, had very little to do with the EU, the referendum merely provided a perfect opportunity to lash out). This means that poorest and most desperate are, upon Brexit, likely to be most affected. Statistics show that, geographically speaking, most hardcore Leavers are also often those historically most generously subsidised by the EU funds. And perhaps even worse is the validation of disturbing xenophobic and racist elements in British society, who now feel shockingly emboldened to make “foreign looking” people feel unwelcome in our streets.

A lot of Femtech leaders in the UK are EU immigrants. What does this result mean to you personally if you are an immigrant?

I’m not the sort of person who chooses to feel victimised and tries to make the most of every situation. For now, we are waiting for the political situation to unfold before we make any strategic decision about things such as location of the business.

I’d like to think I’m not affected emotionally. GrantTree is contributing £100k-200k worth of corporation tax to the UK government annually so it’s difficult to make a case why I wouldn’t be “welcome” here. Still, when I went to a horse riding school in North London yesterday (a very “English” place) I caught myself hesitating whether to quote my Polish sounding maiden name in case I’m not considered “one of us”. This has never happened before, in ten years that I’ve lived and worked here. Following anti-Polish attacks at the Hammersmith Polish Centre, in London where we live, my husband asked me not to speak Polish on the phone when coming home late at night alone, for my safety.

I think it would be fabulous if those who print and distribute “Go Home!” leaflets took a little time to - despite their apprehension towards foreigners - research what impact those very foreigners have on British GDP. During a pre-Brexit debate at Bloomberg Steve Hilton, a Silicon Valley entrepreneur and former director of strategy for David Cameron (also, apparently of Hungarian descent) mentioned we “don’t need more Hungarian waiters over here” to which I replied that ten years ago I was not only a Polish waiter but - while at University - I busied myself with cleaning corporate loos in Sheffield. A lot of us come here highly qualified and ambitious and it takes a few years before we can demonstrate the full positive impact we can have on British culture and GDP. Waiter today, founder tomorrow - you can’t have one without the other.

I would also like to take this opportunity though to thank all of my marvelous British friends who contacted me on Friday, some literally to say “I apologise on behalf of the people of my country”. You guys make it worth staying.

What do you think will be the effect on London as the leading Fintech hub?

London as next Silicon Valley is now, sadly, out of the question. Fintech was supposed to be our key strength in the race towards establishing London as one of the few most thriving entrepreneurial hubs globally. The city became a magnet for aspiring and existing fintech founders (despite very high costs of living and running a business here) for all the right reasons. The EU has already started to look into moving European financial bodies out of London, and major banks have activated plans to move operations to Frankfurt and elsewhere. Over the next few months this dynamic will shift, end result depending on whether follow through with Brexit actually happens and the full extent of the political damage.

Boris Johnson’s most recent statement about the wonders of Brexit for everyone everywhere while Britain continues to foster “intense and intensifying European cooperation and partnership”, is simply hilarious. In the words of my cofounder, Oxford Physics graduate and Swiss citizen whose personal story of a political refugee was published by the Telegraph sadly didn’t convince enough British people to change their minds over Brexit, according to Boris, “You can have your cake and eat it too! And also the immigrants’ cake! ALL THE CAKE IS YOURS!”. Is it rich, glutinous cake, perhaps? This kind of blind-leading-the-blind mentality is in my opinion most likely to lead to the UK’s collapse. To get out of this mess we’re going to need competent leaders with a viable plan. Can such a leader save the London Fintech industry? Perhaps. No one can tell at this point, but the outlook is currently decidedly not positive.