With the UK having now officially left the European Union, many are still wondering want the long term effects of the move will be, particularly for businesses. One major concern that seems to regularly occur is the movement of companies out of the UK in fears that Brexit will make things more difficult for businesses.
One company who has announced a move of operations is global funding and trading platform Funderbeam, who has obtained an investment firm licence from the Estonian Financial Supervision Authority (FSA) to continue operations in the European Economic Area (EEA) after Brexit.
Funderbeam continues to maintain an active regulatory authorisation in the United Kingdom, where its regulated entity acted as a service provider to the European market up until the end of the Brexit transition period. Companies outside the EEA region will continue to be served either by Funderbeam Markets Ltd (UK) or Funderbeam Markets Pte Ltd (Singapore).
According to the founder and CEO of Funderbeam, Kaidi Ruusalepp, Estonia was the obvious logical choice of regulatory jurisdiction for an innovative fintech with a strong presence in the country. “As most of our present business is in the EEA, we needed an appropriate licence to continue operations in the region following the end of the Brexit transition period. After having analysed several potential jurisdictions, Funderbeam chose to apply for a licence in Estonia, which is known for its digital-focused culture and innovative mindset. Herewith, I express my gratitude to the Estonian Financial Supervision Authority for dealing with our application in the most professional way. The process took the form of a highly constructive dialogue, with an open mindset, matching Estonia’s reputation as a highly progressive digital society.”
Funderbeam serves investors from 134 countries and companies from Europe and Asia. To date, it has traded more than $8M worth of investments on its exchange and exceeded the monthly trading volume of €1M in November. Funderbeam Marketplace offers live and direct auto-match trading, allowing buyers and sellers to interact 24/7, 365 days a year without the need for brokers or other third parties.
However, despite Funderbeams announcement, not all companies are jumping ship and some are still opening offices in the UK despite the Brexit situation. One company is Ondato, which deals with digital and biometric authentication. It announced its expansion into Europe, naming London as its new HQ.
The business will now be based in London’s Canary Wharf district, using technology developed at its R&D centre in Vilnius, Lithuania, where the company was founded. During 2021, Ondato will also be looking to expand in Germany, France and Spain, after raising seed capital from Startup Wise Guys and OTB Ventures, Europe’s largest VC firm focussed on tech start-ups with a strong footprint in Central and Eastern Europe.
Liudas Kanapienis, founder and Chief Executive of Ondato, said: “I am thrilled to be expanding the Ondato business after our seed capital raise. The UK remains a business capital for Europe and we are excited to call London our new home – undeterred by Brexit. Amid the unprecedented global disruption of 2020, agile start-ups such as Ondato have rapidly grown to meet the new needs of an increasingly digitised economy. New consumer trends and business processes have been formed and we look forward to further growth in the year ahead with the backing and expertise of OTB Ventures.”
Ondato’s platform provides a complete compliance management solution with photo and live video identity verification, data monitoring, screening, due diligence, risk scoring and case management all on a unified platform. Ondato captures a biometric three-dimensional map of an individual for user identification, providing a higher level of identity assurance than those previously used by large gig economy businesses.
Over the past year, the impact of Covid-19 has accelerated the Ondato business. The growth of digital economy businesses – for transport, food delivery, online commerce and consumer services – has created significant demand for rapid onboarding of users to such platforms. This has also increased the need for effective and cost-efficient Know Your Customer compliance by banks and insurance providers, for merchants and sole traders undertaking new roles as a result of the Covid-19 pandemic. This rapid digitisation of business has led to Ondato’s suite of authentication products to be adopted by a wide range of industries all requiring user verification, identification and risk management. Ondato now has over 150 clients across 24 countries, from gig economy start-ups to major corporate banks. Ondato’s annualised revenue has grown by over 3x since the start of 2020.
With its $2m seed capital round complete, Ondato now looks to expand its product development at its research and development hub in Lithuania, while expanding to the UK, Germany, France and Spain to achieve further growth with some of Europe’s largest digital businesses.
Adam Niewinski, Managing Partner at OTB Ventures said: “We see huge potential for Ondato in this vast market for user identity and compliance. Many businesses from financial institutions, insurance companies, online retailers or car rental businesses – they all face the requirement in the digital economy to know your customers, meet compliance and combat fraud. Ondato is already a vastly international business, and I look forward to seeing its global footprint expand further.”