When the term Silicon Roundabout was first coined ironically in 2008 to describe Shoreditch’s burgeoning tech hub that had sprung up around Old Street, the area was already beginning to burst with creativity and energy. As new and ambitious start-ups moved in to be part of the growing network of new enterprises that were dominating this hitherto undistinguished part of the City’s fringe, it’s hard to imagine that anyone seriously believed this was to be the start of a tech revolution that would have an impact across the world.
Now the home of the UK’s hugely successful and ever-growing digital economy, it’s hard to overstate the influence this part of London is having on the way the world does business. If this sounds like an overblown claim, consider the success and global impact of two companies who had their origins in the Silicon Roundabout and are fundamentally changing the way in which we bank, move money, and run our businesses.
Founded by two friends from Estonia, Taavet Hinrikus and Kristo Käärmann, TransferWise has shaken up the world of international money transfers by providing a low-cost online alternative that ensures customers get real time exchange rates and aren’t slugged with the sort of fees which banks and other electronic fund transfer systems charge. Its rise has been rapid and TransferWise is now a serious rival to other more established players in the market, like PayPal.
The rise of TransferWise also exemplifies what it takes to create a ground-breaking tech product, in that it reflects both how businesses increasingly want and are able to work, as well as how our lifestyles have changed to keep pace with these changes.
As we become more mobile both as citizens and business owners, and are no longer tied to one location or country, even relatively small businesses are frequently required to send and receive money internationally. Likewise, even the most mobile digital nomads have mortgages and bills to pay at home, and bank fees for money transfers add significantly to overheads.
As both Hinrikus and Käärmann were living in London but still regularly transferring funds to and from Estonia, they understood better than most the excessive costs associated with international money transfers. Their solution has meant that this can now be done more cheaply, with the added benefit to users of real-time exchange rates. This offers flexibility and the opportunity to capitalise on FX fluctuations in order to get the best value by making instant transfers at a time of your choosing. As a result of innovations like TransferWise, banking is becoming increasingly borderless and moving capital across national boundaries is becoming significantly more cost effective. This typifies the ways in which tech is able both to drive, and to be influenced by, societal change.
The founders of Stripe, brothers Patrick and John Collison, have likewise gone from relatively modest beginnings in Shoreditch to become major players in the world of international finance. Stripe has enabled even the smallest online business to accept and make payments easily and cheaply, while at the same time it also provides online payment solutions for some of the world’s biggest brands.
The software that the Collison brothers developed gives a website or app the capability to connect directly with bank payment systems, with a very simple set up process and fees at only a fraction of the cost that banks and credit card companies charge. The straightforward but immensely powerful technology has therefore meant that even the smallest business is able to accept payments from anywhere in the world, and at a rate that makes it affordable for enterprises looking to get off the ground. But it’s not just small businesses — in fact, Stripe now provides services for Amazon, arguably the biggest online enterprise on the planet.
Like TravelWise, Stripe’s technology and services are a response to the changes in the business world, while at the same time opening up spaces in which new business models can develop. Recognising that getting paid is ultimately what every business needs, Stripe has streamlined that process online in such a way that setting up a business is much easier, while simultaneously meeting the needs of the international brands who already dominate the market — something of a unique double achievement.
Since launching Stripe’s growth has been rapid, although time will tell whether its application will become as widespread as PayPal’s
Together, these two phenomenally successful enterprises demonstrate all that is best about the tech hub that is Shoreditch. And while the whole idea of the Silicon Roundabout may have started out as a somewhat cynical joke, no-one’s laughing now. It has catapulted the UK into the upper echelons of tech development and provided untold inspiration for developers and entrepreneurs looking to emulate the global success of companies like TransferWise and Stripe.