Singapore Startup WB21 to Leave London for Berlin After Brexit
September 30 2016 - 12:50PM
Dow Jones News
BERLIN—Singapore's fintech firm WB21 Pte. has decided to move
its European head office from London to Berlin, one of the first
startups to quit the U.K. in favor of the German capital after
Britain's vote to leave the European Union.
"Brexit was decisive for us. We had initially planned to operate
our European business out of London, but the decision means we lack
legal certainty there," said Chief Executive Michael Gastauer on
Friday.
WB21, which launched late last year as a payment service
provider, said it would create 200 jobs in Berlin that were
initially slated for London. Of WB21's current 25 positions in
London, 20 will go to Berlin. The fintech startup, based in
Singapore, offers accounts and international money transfers. As of
mid-September, it counted 1 million customers and had sent
cross-border payments totaling more than $5.2 billion.
The Brexit decision in June fed expectations that companies with
U.K. operations could relocate to avoid losing access to the EU
single market, and a number of cities began lobbying companies,
including Frankfurt, Paris and Dublin. According to accounting firm
KPMG, three-quarters of British chief executives are considering
moving headquarters or some operations from the U.K. in response to
the Brexit vote.
But an exodus hasn't materialized, with most decisions pending
the outcome of negotiations on the relationship between the U.K.
and the EU, which have yet to begin. In addition to uncertainty
about trade and business conditions, companies have questions about
taxation, labor law and infrastructure elsewhere.
Berlin, which has focused on wooing startups, recently redoubled
its efforts to attract companies from London. Right after the
Brexit vote, the city's economics ministry began lobbying hundreds
of companies by email, and this month set up a contact office in
London.
Three months after the vote, six companies have decided to move
operations to Berlin, besides WB21, said Stefan Franzke, head of
Berlin Partner, the agency that runs the London office. Among them
are real-estate investment platform BrickVest Ltd, web-design
company MBJ London Ltd., and finance firm Swissbank Ltd., he
said.
The agency is in talks with about 40 other companies about
possible relocation, he said.
WB21 expects to get a German banking license in the coming
months, allowing it to expand its product portfolio and offer
loans, savings accounts and investment products to clients
internationally.
"Instead of going through the licensing process and building a
bank in the U.K., and then in three or four years perhaps not
knowing if we can use it Europe-wide, we decided to come to
Berlin," said Mr. Gastauer. He said Berlin was more attractive than
some other places in Europe because Germany's status as a founding
member of the EU made it unlikely to abandon the bloc, he said.
The company called Berlin "one the fintech-friendliest cities in
Europe" and said the availability of qualified personnel also made
it attractive.
WB21, which stands for 'web bank 21st century,' plans to invest
€50 million in the German capital.
Write to Friedrich Geiger at friedrich.geiger@wsj.com
(END) Dow Jones Newswires
September 30, 2016 12:35 ET (16:35 GMT)
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