KPMG

Built to scale

As head of Funding London, Maggie Rodriguez-Piza is at the heart of the capital’s start-up ecosystem. She explains how the city could one day rival Silicon Valley

July 10 2019, 12:01am

With seven of the world’s top 29 most valuable fintech businesses located in London – including the likes of Transferwise, Funding Circle and Monzo – 2019 is shaping up to be the year of the unicorn as far as investment in British business is concerned. The UK capital is now second only to San Francisco when it comes to new high-tech finance companies with the magic $1 billion valuation.

It’s not only good news for the unicorns themselves, says Funding London CEO Maggie Rodriguez-Piza. She left a career in corporate finance because she was frustrated at how hard it was for start-ups to get the funding they needed, and sees a thriving venture capital market as a vital component of a healthy and resilient economy, helping fast track the big businesses of tomorrow. “Our investment strategy is built around backing companies in sectors that are really of strategic importance to London: technology – fintech in particular – education, clean technologies, health and then any science that is coming out of London’s university base.”

The independent company was spun out of the London Development Agency in 2009. Since then it has invested a total £55 million in 621 early-stage businesses, working alongside private-sector investors to boost start-up growth, while creating a portfolio that includes both card aggregator Curve and AI-powered B2B sales accelerator Cognism, both based in London. What is it about the city that makes it such an investment hotspot? “For entrepreneurs, it is the ease with which they can find everything,” Rodriguez-Piza says, citing a virtuous circle of talent, access and openness. “Networks of advisers, investors and businesses are well developed and it’s not difficult to find them.”

It’s perhaps no surprise that disruptive technology is still seen as the number one threat to growth revealed in the 2019 Global CEO Outlook survey from KPMG. Among UK and global respondents, 21 per cent placed it top of their list, ahead of both climate change and the perceived return of protectionism to the world stage.

But for forward-thinking corporates, the boom in agile young rivals is not all bad news. Rather, it is a chance to develop new models based on corporate venturing, collaboration and partnerships. “Corporate venturing has become a vital part of the ecosystem,” Rodriguez-Piza says. “It has an important role to play in allowing businesses to scale up in a way that would be difficult for them to do independently.”

New technologies also bring new challenges, not least the question of cybersecurity and data protection. KPMG’s survey showed that 52 per cent of UK CEOs agree that suffering a cyberattack is a matter of when, not if, while 67 per cent say that protecting their customers’ data is a key growth responsibility.

“The ability to conduct cybercrime is a result of how far technology has advanced and how much data is out there,” Rodriguez-Piza says. And while big-name security breaches grab the headlines, the consequences can be worse for smaller, fast growing firms. “Businesses in our portfolio have been hacked and if you’re an e-commerce platform, for example, being down for a week is disastrous. You can’t afford not to have done the right things.”

Whatever the size of a business, new high-tech working methods call for a new leadership style. “Technology can be very isolating. Being a leader today is about ensuring people are connected and working for a common cause. You have to make sure there is a conversation going on between team members.”

Will London ever challenge Silicon Valley as the world’s VC capital? Only if concerns around the impact of Brexit and the global tide of economic nationalism are addressed, Rodriguez-Piza warns. “A third of computing, engineering and programming jobs in London are done by people who aren’t from the UK. If they don’t feel welcome, that’s a big issue.”

Lessons in business life

Starting out
At the beginning, you have to prove yourself so you need to display rigour and integrity in everything you do. It’s also important to voice your opinions, something that as juniors we don’t do well. Finally there is teamwork – many people don’t appreciate the importance of collaboration. If you do these things, you’ll prove your worth as a person.

Growing up
Stand out by taking risks and pursuing opportunities; you’ll learn something valuable and prove your qualities as a human being and a leader. Find ways to influence others through your own views rather than by following someone else, which is a sure way of demonstrating that you are not a leader.

Staying up
Early on, your focus is getting to the board. Then it’s: “I’ve got ten more years, what am I going to do?” At that point you need to be doing something that is good for your soul. What is important to you as a person and how can you achieve it from your position? It may be volunteering or joining other boards. Having the capacity to do those things on the side keeps your energy up and leaves you better motivated.

‘Disruptive tech tops the list of risks businesses face’

The CEO Outlook report details what’s keeping top bosses awake at night. KPMG partner Karen Briggs examines its implications

Despite the growing recognition of issues around climate change and a return to territorialism – cited as the second and third most significant risks by UK CEOs in the latest KPMG Outlook survey – disruptive technology still tops the list with 21 per cent saying it is the number one risk their businesses face.

While disruptive tech brings opportunity, the flipside is the risk of potentially severe financial and reputational damage in the event of a cyberattack and/or the loss of customer data. In a sign that this is increasingly well understood in the boardroom, 67 per cent of UK CEOs regard protecting customer data as one of their most important responsibilities, up from 40 per cent last year. What’s more, 52 per cent of UK CEOs – and 53 per cent of their colleagues globally – believe it’s only a matter of time before their organisation becomes the target of a cyberattack.

Collaborative approaches are on the rise in promoting growth and innovation. But there is opportunity for greater collaboration on cybersecurity and data protection, both within the business – the cyberteam can’t be expected to work alone – and in getting advice from external experts.

Concerns about climate change are also in the ascendant, and larger organisations are realising that they are the ones who have the potential to really make a difference in this area.

Growing international tensions and the prospect of trade disputes between nations are the other big issues this year. Mitigating those risks means developing a granular understanding of your supply chains, strong contingency planning and an agile culture.

For more information, visit
kpmg.co.uk/ceooutlook2019.