For the last two years, a perfect storm has been brewing across the Atlantic, whipping up ideal conditions for new British technology investment in Atlanta.
Just as the Georgia capital got serious about promoting its payments prowess in London, the world’s financial center, the United Kingdom as a whole decided (narrowly) that its future looked brighter outside the European Union.
The so-called “Brexit” vote caused some angst over whether London’s hub status would be secure even if money and manpower could no longer flow freely across the English Channel, and the issue is still far from being settled.
But Brexit also had another clear effect: pushing the United Kingdom closer to the U.S., which under President Donald Trump is wary of multilateralism and keen to work more closely with traditional allies. Both sides have agreed to work on a free-trade deal as soon as Brexit becomes reality.
Into this milieu was birthed the P20, or Payments 20, a high-level forum designed to bring industry leaders and government regulators together in an effort to set standards that will drive this strategic industry into the future.
The conference, conceived in Atlanta, held its first meeting last fall in London, where then- Prime Minister David Cameron was on the guest list for one of the dinners. This October, the event crosses back over to Atlanta’s “Transaction Alley,” and boosters like the American Transaction Processors Coalition hope similarly influential regulators will make the short flight down from Washington. The pairing seems to make sense: The ATPC says 70 percent of electronic payment transactions cross through companies with a Georgia presence, while the U.K. is a fast adopter of technology in commerce and banking. Fintech supports some 60,000 jobs there.
P20 touches the upper echelons of the industry, but there is evidence of a groundswell of attention for Atlanta in the broader sector, as well as in other strategic industries like cybersecurity.
Featurespace blends the two, using artificial intelligence to help financial institutions and card issuers detect and combat fraud. Its software uses fine-tuned algorithms to build models of what “good” customers look like, then compares new activity against that baseline to fend off bad actors.
The firm’s initial research came out of Cambridge University “before the terms big data, AI and machine learning became popularized,” says CTO and co-founder Dave Excell, who is now leading North American expansion from Atlanta.
Serving the U.S. from London worked for awhile, but the need to be closer to a growing slate of customers soon became clear.
“We just saw the increased traction and need and said we needed to base ourselves in the U.S. because we see there’s such a big opportunity for us,” Mr. Excell said.
Atlanta was a natural fit. Georgia is home to key payment processors that were both early customers and investors. Columbus-based TSYS Inc., which has a major presence in London, introduced the firm to its Atlanta-based venture arm, TTV Capital. Another early backer, WorldPay — now owned by Vantiv — also had a major presence in Atlanta, where it has underwritten the development of a fintech curriculum in local colleges.
Add to that a well-connected airport, the east-coast time zone and universities like Georgia Tech, and Featurespace was soon leasing space in the Bank of America plaza building in Midtown.
Mr. Excell expects his global workforce to grow from about 140 to 200 this year, with most of that coming out of an Atlanta operation that will be beefed up with data scientists and engineers well-versed in building machine learning models.
“We’re growing the team based on customer demand, and as we win those customers, we’ll keep adding more people to the team,” he said.
Other British firms have similarly found Atlanta to be ripe for payments partnerships.
TruRating CEO Georgina Nelson feels as though she’s been adopted in a city that has been refreshingly (and surprisingly) invested in her success.
Now a frequent speaker at tech panels around town, she finds herself acting as an Atlanta booster, singing the praises of the local lifestyle enabled by her office and apartment on the Atlanta Beltline.
Feeling the Atlanta love was made easier when she was invited to a party at the New York Stock Exchange with top executives from First Data, United Parcel Service Inc., Home Depot — with UGA great Herschel Walker ringing the closing bell. She’s also racked up local innovation awards from TAG and the Atlanta Technology Professionals, in addition to global recognition and a steady stream of funding.
“I think the story would be very different if you turned up on the shores of the Valley or San Francisco. You’re competing all the time for resources, for attention, for funding,” Ms. Nelson told Global Atlanta in a recent interview. “In Atlanta, everyone wants you to be a massive success story because your success is everybody else’s success. They want Atlanta to be seen for what it is: An amazing place to start a company.”
TruRating’s software integrates survey questions into point of sale terminals, giving merchants real-time data they can use to improve the customer experience or drive increased revenue. Even with a Toronto office, it also made sense to set down roots in Atlanta, where the team has grown to about 25 people. Again, being near payments giants — and hardware makers Verifone and Ingenico, both of which have local outposts — was essential for the startup. The city’s backing is quite literal as well: TruRating is one of seven companies in the initial Backed by ATL class, aimed at promoting startups in key sectors.
London-based PPRO also positions itself as a partner to the big processors with a solution that takes the hassle out of accepting international payments.
Americans may think the world revolves around Visa and MasterCard, but especially in developing countries, consumers use a wide variety of so-called “alternative payment methods” in online commerce, from digital wallets to cash, with the goods sometimes being shipped only after a payment is made at a physical location.
PPRO partners directly with processors, taking the complexity out of offering international payment acceptance to their e-commerce merchants. Atlanta-based First Data and Global Payments are key customers as they gear up to serve a new wave of merchants going global in the wake of success stories like Uber and AirBnB.
“Those businesses that are either having international success or thinking they’re going to want to go international, they’re seeing that you need to offer the local payment methods to the consumer,” PPRO CEO Simon Black told Global Atlanta in an interview at last week’s FinTech South conference.
The fact that local incumbents have been more U.S.-oriented is a plus for PPRO. The company streamlines the ability to support 200 payment methods from around the world, from convenience stores to payments based in messaging apps like China’s WeChat.
“Payments as an industry is globalizing, and the key is the present tense,” Mr. Black said.
Atlanta is home to a “small but senior” team of three PPRO employees. The headcount should double both this year and next, landing at 12 people or so. The company will also explore the Latin American market from Atlanta before deciding on where to put an office in that region.
Mr. Black and Featurespace’s Mr. Excell spoke simultaneously on either side of Mercedes-Benz Stadium during the FinTech South conference hosted by the Technology Association of Georgia May 8.
But they weren’t the only evidence of the British tech invasion. Fourteen out of 31 companies at the show’s international pavilion came from two separate British delegations. See the full list of British firms and other international companies here.
Thank you to all those who participated in the UK FinTech Mission to Atlanta!
We hope your attendance @FinTechSouth, panels and roundtables with top fintechs in #TransactionAlley, & extracurriculars organized by @tradegovukATL led to a fruitful experience with great takeaways. pic.twitter.com/Q8L9X8Fn85
— British Consulate-General Atlanta (@UKinAtlanta) May 10, 2018
U.K. Consul General Jeremy Pilmore-Bedford, who has presided over the growth of the Department of International Trade office at the consulate in Atlanta, says the tide has shifted just during just three years here.
“A couple of years ago, we would have really had trouble getting any companies. That just shows how Atlanta’s reputation has changed,” he said, though he did note that the relationship has also benefited from a dedicated DIT employee focused on ginning up connections in financial and professional services. “We’ve seen the same with cybersecurity and the entertainment sector. In all of these sectors, more and more people in business are recognizing that there is a lot of opportunity in Atlanta.”
Winning the massive British-owned Pinewood Studios project in Fayetteville certainly hasn’t hurt, and British firms have been among the most persistent attendees of Atlanta Cyber Con. Atlanta boosters like the Metro Atlanta Chamber have taken multiple trade missions to London, including one based around an Atlanta Falcons football game at Wembley Stadium in 2014.
Antony Phillipson, the trade commissioner for the U.K. based in New York, said he’s encouraging companies not to be “captured” by New York and the West Coast, arguing that there’s much opportunity to be found across sectors by looking South. The consulate, he said, is a perfect conduit for companies looking to this region.
“We really need to sort of lean into the incredibly exciting stories that are happening in places like Atlanta in all these areas, whether it’s aerospace, financial services or life sciences. They aren’t anywhere else.”
The flow isn’t unidirectional, either. Atlanta-based innovators are setting up shop in London to be closer to the European action. Small-business lending platform Kabbage Inc., one of Atlanta’s few fintech unicorns, has a London office. OneTrust — a privacy management company founded in part by the minds behind Atlanta success stories Manhattan Associates and AirWatch — says it has “co-headquarters” in Atlanta and London.