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Eileen Burbidge.
Eileen Burbidge. Photograph: Martin Godwin/The Guardian
Eileen Burbidge. Photograph: Martin Godwin/The Guardian

Eileen Burbidge: the American angel investor spearheading UK fintech

This article is more than 8 years old

New government business adviser says Britain will easily surpass Silicon Valley in finance technology

Why is it, Eileen Burbidge asks, that girls at primary school are required to wear skirts and play netball rather than wear shorts and play football. “At seven years old, what are you saying to the children at that age?” asked Burbidge, a newly appointed member of David Cameron’s business advisory panel.

A key investor in companies at the forefront of financial innovation, Burbidge is concerned that gender stereotyping is a real problem. But despite a recent controversy over diversity in Silicon Valley, she does not feel being a woman in her industry has held her back.

“The tech industry as a sector has been good for me,” she says. “I might benefit from other sterotypes … in general being a women hasn’t been to my detriment.

“I do feel the tech sector is much more meritirocatic [than other sectors] ... People underestimate women in tech at their own peril.”

After graduating in computer science from the University of Illinois in the early 1990s, Burbidge ended up in Silicon Valley where she worked at some of the biggest tech names, such as Apple and Sun. Then she came to the UK for what she thought would be a short stint.

Ten years on, she has not returned to her native America and is spearheading part of George Osborne’s drive to improve the productivity of UK plc. In last month’s productivity plan, the chancellor set out his ambition to make the UK the leading centre for financial innovation in the world and named her special envoy for Fintech – the branch of the technology sector bidding to revolutionise financial services, from mobile banking and money transfers to fundraising and even asset management.

As part of the plan Osborne intends to launch a benchmarking exercise in the autumn to establish where the UK lies in the world league.

Meanwhile, from a trendy, loft-like office space in Clerkenwell, central London, Burbidge and her two partners at Passion Capital have become one of the go-to destinations for entrepreneurs looking for finance for businesses in the earliest stages of development.

Can the UK really take on the might of Silicon Valley? Burbidge has no hesitation. “With regards to fintech, I don’t merely think the UK can ‘take on’ Silicon Valley. I know for certain that we can lead it and the rest of the world – and that we are in fact already doing so. There is no question that most technology innovation in financial services is coming from London.”

The online jobs agency Adzuna and the car enthusiasts’ website CarThrottle have both been backed by Passion, which was established in 2009 and has launched two funds which have received £43m of taxpayers’ money through the British Business Bank.

“Your tax money at work” is how she put it, saying it is being invested “principally for the benefit of the UK economy”. Additional investment money from wealthy individuals takes both funds to £83m in total.

The chancellor’s ambition to challenge Silicon Valley follows the Tech City initiative launched by the coalition in 2010. Even before that, the term Silicon Roundabout had been coined as the name for the Shoreditch area in east London where dotcom startups were basing their operations.

Several factors work in Britain’s favour, Burbidge says: the regulatory environment, the UK’s banking heritage, and the time zone – between Hong Kong to the east and the US, and Silicon Valley, to the west.

More broadly, she says: “I’m certain that the UK can take on Silicon Valley and don’t even like phrasing it that way as I feel that ambition is too low given our potential.

“We have all the ingredients for success here in the UK and are now also slowly experiencing a cultural shift which brings respect and support for ambition and entrepreneurship in our society,” she says.

Eilee Burbidge discusses startups. Guardian

Burbidge has not lost her American accent, but she nevertheless talks about “we” and “us” when discussing the UK. Britain is now her home. In the Queen’s birthday honours she received an MBE for services to business. In the run-up to the election she signed a letter published in the Guardian backing the Conservatives.

“Now that I do have citizenship, four kids that are British and going to go through school from here ... I genuinely now am invested personally and of course professionally in the country,” she says. “It’s like footballers, you want to play in the top league.”

Her first taste of investing came through Ambient Sound Investments, the vehicle set up by the Estonian engineers behind Skype to invest their proceeds from the ill-fated $2.6bn sale to eBay. Her first role in the UK was as one of five employees in London with the video chat service, although she was fired before the eBay deal went through.

Eventually, she ended up at Passion with her two partners, Stefan Glaenzer, who founded the German auction site ricardo.de which was sold to rival qxl.com, and Robert Dighero, qxl’s former finance director.

They are backing businesses in their very early stages. Performance figures for the first fund, which has invested in 42 companies, show the value of the businesses has risen more than three times since the initial investment – although with subsequent rounds of fundraising included the actual return is 1.6 times.

Those figures were bolstered by the £45m sale of Mendeley, an academic social website, to Reed Elsevier in 2013. Burbidge had been an angel investor – investing her own money – before Passion stepped in. She says systems have been put in place to avoid conflicts and that she and her partners will not invest in companies that Passion is backing.

Burbidge is known for her outspoken approach, operating on a golden rule that she sums up as “no jerks”. She explains: as an early stage investor, startups tend to come without detailed business plans to review. “We are basically investing in the people.”

She adds: “If you are a genuine person it is easier for you to attract great talent, it’s easier for you to retain that talent and easier for you to relate to your customers ... and it makes it stronger in the long run and makes the business more scaleable so it is not just all about you.

“We have some cases where the three of us … thought: ‘Great, it’s a great market and these guys will probably be the ones who will do it … so let’s make this investment.’ And we’ve gone round the table and said: ‘Who’s taking the board seat?’ and we each assume the other was going to take the board seat. And as soon as we realise none of us wants to sit on the board with these people we have changed our minds and not made the investment.”

Five startups to watch

Digital Shadows: Passion Capital has backed this cybersecurity business, an area that Burbidge highlights for its vast opportunities given online attacks on businesses, such as Ashley Madison and Sony. She sits on the board of the startup which aims to alert companies to potential cyber threats.

GoCardless: A payments system, launched in September 2011 and backed by Passion, that allows merchants to take direct debits online and avoid taking credit card payments. It is trying to crack an area dominated by huge players, such as Visa, Mastercard and PayPal.

Mondo: Passion Capital set up a special £2m fund just to back this banking app which is now applying for a banking licence from the Bank of England. It aims to be digital only – no branches – and the banking equivalent of Google.

Onfido: Not backed by Passion, it automates the collection of necessary data for firms needing background checks on individuals. Prospective employees, for instance, enter their personal details via a web link and Onfido then conducts the necessary searches.

Revelin: An online fraud protection business that is still in its early stages. Based in the offices of Passion Capital, which has invested, it uses historical data to analyse signals and patterns in transactions with a view to detecting fraud.



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