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A hotbed of fintech innovation

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Micu Radu

Situated in the heart of London’s Canary Wharf and occupying the entire 39th floor of One Canada Square, Level39 is Europe’s largest technology accelerator space for financial services, retail and smart city  technology companies. Established by Canary Wharf Group, Level39 was opened in March 2013 by the Mayor of London, Boris Johnson. Although the space is not even a year old, it has quickly become an important part of London’s booming Tech City.

technology accelerator spaceWith an impressive interior, designed specifically to accommodate growing startups, corporates, professionals and investors alike, Level39 puts its members in touch with hard-to-reach industry professionals and expert mentors. Level39 also runs a busy events calendar alongside a range of bespoke accelerator programmes for high growth tech companies. The content for these programmes is created by Piv-otal Innovations, a company set up to help execute Level39’s ambition to attract and develop high calibre, early-stage fintech companies from around the world. Situated at Canary Wharf, and with the financial capital of the world on its doorstep, Level39’s members gain access to some of the financial sectors’ most influential technology buyers, investors and talent to accelerate their traction and access to markets.

Hot Topics’ Tom Lytton-Dickie visited the iconic Level39 space to meet both the Head of Level39, Eric Van der Kleij, and the CEO of Pivotal Innovations, Claire Cockerton, to learn about their first ten months of operation, the type of company they work with, and what success looks like for the project.

The man charged with running Level39 is Eric Van der Kleij, previously the first CEO of the government backed Tech City Investment Organisation (TCIO), now known as Tech City UK. Eric is clear where his background lies. “I’m really very much from the grassroots entrepreneurial side of the fence – I don’t come from real estate, and I’m not a strategy management consultant.”

Indeed Van der Kleij is a serial entrepreneur who has created several companies including Adeptra, a business which alerted consumers to possible credit card fraud, which was eventually sold to FICO in 2012 for $115m.

In 2006, the British government approached Van der Kleij to assist in the development of its Global Entrepreneur Programme, an initiative to help UK-based technology companies expand and globalise their businesses. After a successful tenure in this role, Van der Kleij was appointed to take charge of Tech City IO following Prime Minister David Cameron’s announcement of its creation in 2011.

Van der Kleij speaks highly of the government’s commitment to creating Tech City and is proud of his achievements whilst at the helm. Five major policy changes were implemented by government policymakers during his 18 months in charge and recalls, “I’ve probably never felt more in the firing line and never more effective as a person as the time I was chief executive of Tech City Investment Organisation (TCIO)”.

While the movement of government could seem slow in comparison to the faster world of the entrepreneur, Van der Kleij said “you feel a sense of elation that you can have that much impact, but at the same time it’s an extremely tough job and you have to fight hard to get these innovations through.”

Former Facebook exec Joanna Shields took over as CEO of TCIO in September 2012, Van der Kleij explains he was ready to step aside, “Someone like me isn’t exactly an entirely natural fit within government! I did feel for them because I was always pushing for more and more. After an intense 18 months, I was very happy to dip back out again, and now I cheer loudly from the sidelines.”

A Pivotal Innovation

Working alongside Van der Kleij is Deputy Head of Level39 and CEO of Pivotal Innovations, Claire Cockerton. Cockerton, who is of Scandinavian roots but grew up in Canada, studied architecture and her first business, Aesthetic Earthworks, was focused around sustainable landscape design and build. She says her understanding of the impact of architecture has enabled her to help Level39 become “a space that fosters innovation and collaborationClaire Cockerton Level39 technology accelerator space between
start-ups, investors, developers and corporates”. Cockerton completed an MBA at Imperial College, focusing specifically on accelerators and business incubators before helping to set up the Branson Centre for Entrepreneurship in Johannesburg.

Claire’s background as an entrepreneur, alongside an academic focus on designing programmes to accelerate early stage businesses, means that she is well placed to judge what it takes to start and grow a business, and an ideal candidate to run Pivotal Innovations. “As an entrepreneur, you must be tenacious and bold in the face of uncertainty, you must be creative and resourceful in overcoming challenges you must test your idea with a diverse, multi-disciplinary group: clients, peers, business mentors, investors, industry experts. In the early stages of growing a business you must become comfortable in the constant and rapid process of iteration, whether those are technology, business or sales focussed” said Cockerton.

“That’s key to what we do here at Level39, connecting start-ups with a quality portfolio of expert mentors, relevant curriculum and market opportunities, that stimulate and inform these pivots. We specialise in 3 major industries, Financial Services, Retail and Smart Cities – the potential for new technologies to change the way we fundamentally define these industries is enormous. There’s no shortage of opportunities to take advantage of, even in the very local community here of firms operating here in Canary Wharf” she added.

There are two ways to become a part of Level39. Young, growing tech companies can become members of Level39, which enables them to access either desk or office space. During their membership, members of Level39 are expected to encounter growth, and most are expected to outgrow their initial space within 12-18 months. Additionally, young companies can get involved with Level39 through accelerator programmes and start-up competitions that are crafted by Pivotal Innovations or by external accelerator-partners who rent space at Level39.

Usually, an innovation programme is created with a corporate and/or venturing partner, and are based around a market need or an internal business challenge. Recent examples of this include challenges that focused on challanges that seek new talent in data management and visualisation. Pivotal Innovations seek applications from an international pool of young companies, and then shortlist a number of relevant finalists to participate in an intensive period of incubation which is usually between 6-12 weeks.

During this time, the startups shape their products and propositions, together with mentors from their preferred client segment. During innovation programming, a company will attend a structured programme of events and
a curriculum of specialist masterclasses. They will also meet hand-selected of suite of advisors, investors and peers.The winner of the programme often secures a piloting or partnership opportunity, media exposure, and/or financing.

“Our programmes are a designed to be valuable to everyone involved: whether that’s access to new technology, talent, or venturing opportunities for the corporate, or access to the resources, expertise, financing and contracts for the start-ups, said Cockerton.

A Whirlwind start

Level39 and the various programmes have received more than 450 applications from around the world and continues to reach out to other international tech clusters to foster trade and investment and programme
exchange relationships. “We want Level39 to be a gateway, not only to London, but beyond to other growth markets” said Cockerton.
Level39 generally works with businesses that are in the second or third stage of their growth, rather than the earliest stage startups. “Our incubatees have a minimum viable product, have a defined client set, and may already have some investment,” she said. “We try to select a portfolio of companies with a view of deepening the connection to our industry themes, especially FinTech Innovation, and maximising partnering opportunities and skills transfer across the cohorts.

Level39 offers knows that growing tech companies need flexibility to help enable them to grow, therefore all office and deskspace deals are based on one month contracts. Recently, Level39 have opened the aspirational ‘High Growth Space’ on the forty-second floor of One Canada Square. This space is targeted at companies that have outgrown their original space on Level39. There is a clear selection criteria for new applications. The product, technology
and idea must be very strong and the company needs to be demonstrating growth. Cockerton explained, “We look for a gutsy entrepreneur and a strong team who will come to put their heart and mind into company growth, really utilizing the benefits of the space and programmes. We measure our success by the quality of companies we attract, accelerate and eventually help grow in size to other floors in the building.”

Van der Kleij is bullish about the ongoing development of Level39. “We have the opportunity to create something world class right here in London, as good as anything you’ll see anywhere in the world including Silicon Valley.”

Cockerton describes the first 10 months of Level39 as “exhilarating”, with five companies graduating to the recently-opened ‘High Growth Space’ after experiencing healthy market traction, exposure and having landed industry-leading pilots. “This is what we will continue to strive towards,” she said, adding that international media exposure and growing awareness of Level39 as a Tech hub leading in financial ser-vices innovation in London is greatly encouraging, and also a big responsibility for us to continue to deliver to all the businesses and partners we work with, big and small. She added that whilst many of the banks have their own incubators and internal innovation arms, they are starting to realise that sometimes the companies that are applying for membership at Level39, and the opening of the High Growth Space, within the first year is “real evidence
of the opportunity for these businesses.”

Over the next six months, Cockerton says that Level39 hopes to fill the High Growth Space on the forty-second floor with further success stories, whilst continuing to produce quality innovation programmes and attract new members with scalable companies. Beyond that, Cockerton explains that propelling members towards international growth is the next step, “if the companies we work with at Level39 can use Canary Wharf as a springboard to international opportunities,
that would be a great achievement for us.”