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A Spanish financial startup based in London looking for an way to exit from the United Kingdom

One of the few Spanish financial startups based in London is looking for an alternative to a possible disorderly exit from the United Kingdom in the European Union. The company, owned by several international funds, has applied to the Bank of Spain for its local payment entity license. The objective is to have a plan B to operate from this country’s currency management platform for small and medium enterprises. She is not the only one who has done it. Her competitor Ebury has achieved authorization in Belgium.

The contingency plan

This Wednesday the European Union has postponed the Brexit six more months until the end of October. And this is with the aim of giving more time to the government team led by the Prime Minister, Theresa May, to reach an agreement. However, startups in the financial sector are already creating contingency plans to avoid problems in their operations. Kantox is one of them. The startup founded by Philippe Gelis, Antonio Rami and John Carbajal started as a Spanish company but straddling Barcelona and London. In the Spanish city he had the development team and in London the rest of the staff and the management team.

Kantox has from its origin an authorization from the Financial Conduct Authority, the British regulator, for the provision of payment services. However, the biggest risk that a hard Brexit can have is the change in the rules of the game. Today, the current EU regulations allow financial institutions based in the United Kingdom to operate in other countries with a national banking license. This could change from that exit. Consequence? The startup has initiated the procedures to request the license in Spain, as confirmed by the CEO, Philippe Gelis. There are no deadlines for the concession, but it should not take.

This is a defensive movement in a scenario of significant uncertainty. Gelis explains no one is clear about what is going to happen. And if there is a Brexit without agreement what can happen or how much time will be allowed for all the changes.

This process is being followed in parallel to the new round of financing that the company has just launched. It is in its initial phases and the objective is to close it in the coming months. They will inject several million euros and give new members, among which could be several banks or financial institutions. That would be added to their main shareholders. Like the French venture capital funds Idinvest and Partech Partners or the Cabiedes fund. In principle, part of the initial investors will be released with the purchase of shares in secondary.

Other license requests

The case of Kantox is not an exception. The other startup of Spanish origin that has its authorization in London is Ebury. Your service is also that of currency management. And he has already taken measures. As they confirm to the companies that use their platform, they have already been granted an authorization as a European payment entity in Belgium. A spokesperson if the process of Brexit progresses, European customers would be transferred to this new entity. Without affecting in any way its relationship with Ebury or its daily financial operations in relation to its foreign activity.

They are not the only ones. At the beginning of the year, two great technological unicorns from the Fintech sector made the same movement. Transferwise, the giant of foreign exchange transfers between individuals, applied for a license in Brussels, Belgium and Revolut obtained a European banking authorization in Lithuania.

Other companies that are not fintech are also moving their chips to avoid problems in their services. Google is a giant that has decided to move to manage all online payments for its services from Ireland. The company explained to its users a week ago that, they are going to make some changes so that. Even if the UK’s relationship with the EU changes, you can continue to enjoy our services.

And the rest of startups and Spanish companies?

The doubt also arises between Spanish companies that have their headquarters in the United Kingdom, for reasons of operation and financing. This is the case of Jobandtalent, whose parent company is located in London, although it has its main headquarters in Spain and small offices both in the British capital and in other European countries. From the company they say they have a plan in case the holding company has to be moved, but they have not made any decision. What does it depend on? If they see that after the Brexit, whether it is hard or not, it may be more positive to move to an EU country. In spite of everything, it is not on the table, at least for now.

Another big company that has its headquarters in the City is the risk capital fund of Santander Innoventures. It does so through the subsidiary Santander Fintech Limited, where all the investments that it has been making since 2014 hang. Despite everything, the bank does not understand that Brexit affected its activity. Since society only does so many times of holding shares and does not imply any extra financial operations, so they do not have any changes in sight.

Be that as it may, everyone has the Brexit on their horizon. Some have already taken action, because the affection to your business can be important. Others, follow the expectation.

Published inFintech
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