Sandbox In The Sky

Eric Van der Kleij, the former CEO of London’s Tech City initiative, is earnestly explaining his new mission: connecting big corporations with the city’s most exciting financial services and retail-focused start-ups, when he suddenly stops to peer out the window at a flying object. “Amazing,” he reflects, “we are higher than the helicopters.”

Van der Kleij is now heading up Level39, which is being billed as the UK’s largest financial services and retail accelerator and is due to open its doors in late March. The accelerator takes its name from its location: the entire 39th floor of One Canada Square in Canary Wharf, all 29,000 square feet of it. Designed in ‘tech industry’ style by renowned architects Gensler, who have worked on some of the world’s most exciting workspaces including offices for Facebook and Google, the Level39 initiative aims to help start-ups rent space and help them grow and obtain additional funding during 8- to 12-week residencies.

The space includes a set of ‘sandboxes’ which will enable accelerator programs, software engineers and builders of financial services platforms to work on financial technology products in a ring-fenced environment.

Van der Kleij’s transition mirrors that of Tech City itself, which now officially includes not just East London but everywhere from Canary Wharf to Stratford around the Olympic Park and beyond. As Tech City grows larger, so too does its responsibility to help the burgeoning number of start-ups in its ecosystem become high-growth companies (see the story on pages one, four and five). Connecting start-ups to corporates that will buy their wares and maybe even their companies is a necessary ingredient to helping them scale up. Financial services, which is one of London’s key sectors, and retail, an area in which UK companies like Burberry and Tesco are taking the lead, are two promising areas to target. Others include digital advertising.

London is already home to over 30 accelerators and incubators and some special programs that zero in on the financial sector, such as “City Meets Tech,” an initiative to get the banking community to invest in start-ups. The proximity of the City creates “fantastic opportunities for colliding the experience and established presence of financial services players with the agility and flexibility of new fin-tech start-ups,” says Joanna Shields, who took over Tech City’s top job from Van der Kleij.

Trouble is connecting start-ups with financial services players is easier said than done, as Van der Kleij can attest. He founded Adeptra (formerly Realcall), a technology company that pioneered the automation of credit card fraud detection and alerting. Van der Kleij raised seed, angel, and venture capital finance and moved the business to the U.S. before succeeding in selling Adeptra to FICO for $115 million in August 2012. Getting to an exit took over 10 years, in part because it was so difficult to connect with big players in the financial services industry, he says.

Level39’s differentiator is that it is providing space for the two sides to work together on an ongoing basis, says Van der Kleij. “London can become a global leader in fintech,” says Van der Kleij — that is one of the goals. “We want to help the sector transform, and in some cases reset, and help it find the right kind of innovation.”

Level39 hopes to attract big corporations which want to either connect with outside innovation or “supercharge” their own internal R&D outside the strictures of company headquarters.

Accenture is the first resident. Level39 is hosting Accenture’s new accelerator program known as the FinTech Innovation Lab London, a collaboration between Accenture, financial institutions, the Mayor of London, the City of London and the Technology Strategy Board.

And SWIFT, a global organization that each day handles financial transactions such as wire transfers for more than 9,000 banks, has signed a partnership agreement with Level39. “Level39 is an important catalyst for innovation in the financial industry and is instrumental in positioning London as the hotbed of new and strategic initiatives,” says Matteo Rizzi, a co-founder of Innotribe, the innovation arm of Swift. Innotribe organizes financial services start-up competitions around the world in order to spur better collaboration with the banking community.

Retail is also an important focus. Retailers that sign up as partners will be given the opportunity to test new technology inside shopping malls owned by Canary Wharf. “We can turn the shopping malls into a living lab for retail technology,” says Van der Kliej.

Van der Kleij is looking for several more key corporate partners. In addition to start-ups he also hopes to attract young businesses experiencing rapid expansion, by offering to make it easier for them to meet potential clients and partners, investors, mentors and other entrepreneurs. One enticement is a discount on membership to those companies that agree to hold “office hours” in the open space and meet with and help mentor start-ups working in the accelerator.

Once visitors take an express elevator to the 39th floor their first stop can be the coffee bar; they can and use an iPad to personalize their java orders or use one of the old phone booths that have been updated to allow privacy while Skyping. The space includes a ‘technology tunnel,’ capable of showing live data and incorporating interactive technology prepared by Level39 companies. The tunnel leads to a new 200-seat event space to host regular industry events and demonstration days. There are also plans for a Level39 Business Club Lounge, which will host a membership-style club which Van der Kleij hopes will attracting leading industry figures and investors.

Even before Level39 began accepting official applications from interested start-ups in late February Van der Kleij says the accelerator was contacted by “hundreds” of young companies. Some may scoff at the idea of trying to get tech start-ups to hang out in Canary Wharf. But that could change. One of the first events scheduled at Level39, called Fintech Sizzle, is being organized by 3beards, the group that runs Silicon Drinkabout, a regular after-work drinks event for start-ups every Friday near the Silicon Roundabout; the Drinkabout was founded by Mind Candy. The jury is still out on whether his new sandbox in the sky will ever become as much of a magnet as the Silicon Roundabout but Van der Kleij clearly feels it is worth a try.




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