British Invasion: Finsphere Expands to U.K., With A Little Help From Its Friends
A couple of weeks ago, I had an interesting chat with Finsphere, a technology company in Bellevue, WA, that makes mobile software to help banks and other institutions fight financial fraud and identity theft.
Finsphere has been working on expanding globally, and it took a big first step last August when it opened an office in London. That operation has become increasingly important to its business, and Finsphere is being held up as an example of how a U.S. startup can get established quickly in the U.K. market.
“London was the perfect place for us to expand,” says Rod Murchison, Finsphere’s chief marketing officer. “It’s the tip of the spear for a more global campaign. But it’s still difficult for a young company to make that kind of investment and execute.”
If the Seattle-to-London connection sounds familiar, it should. I wrote last week about Smilebox, the Redmond, WA-based photo services company that recently raised $2 million to get a toehold in the European consumer market, also starting with the U.K. They are in completely different businesses—with Smilebox aiming for consumers and Finsphere pursuing banks—but there are certainly some cultural issues both will have to navigate as they grow. And just a few weeks earlier, Seattle’s SEOmoz, a search engine optimization and online marketing company, formed a partnership with London-based search marketing startup Distilled to hand over its consulting business; in that case, however, Distilled was setting up a Seattle office instead of vice versa.
The fact that at least three local tech startups have recently gotten involved with the U.K. innovation scene is hardly a coincidence. London is a natural epicenter of finance and technology, especially in sectors like mobile and Internet. The costs of doing business there have gone down markedly during the recession. And U.S. companies often think of the U.K. as being less foreign than other, non-English-speaking countries. That might be true to an extent, but the cultural and business differences are still immense, and they pose real challenges to any company setting up there.
To that end, Finsphere enlisted the help of Think London, a not-for-profit U.K. organization that advises overseas companies about doing business in London. The group started 16 years ago and says it has helped some 1,500 companies from 40-odd countries set up shop in the U.K., among them giants like Google (for its mobile and wireless business) and Microsoft (for its search technology center), as well as pre-revenue startups.
In Finsphere’s case, Think London provided crucial guidance on things like finding the right location for its office and facilities, market intelligence, investment decisions, public relations, legal issues, banking and insurance, telecommunications, and IT.
And the decisions seem to be paying off. Although Finsphere wouldn’t provide any details about its revenues, it says its customers now include some of the biggest financial institutions in the U.K. And its software that works against fraud and identity theft seems to have resonated with U.K. banks—perhaps more so than with U.S. institutions.
Finsphere, which was founded in 2007, is led by CEO and co-founder Mike Buhrmann. The company is backed by some well-known VCs—Bezos Expeditions, Frazier Technology Ventures, Mohr Davidow Ventures, and Shasta Ventures. It has 25 employees in Seattle and about five in other parts of the U.S., to go along with three employees in London—and it has plans to double or triple its U.K. workforce. “The talent is phenomenal,” Murchison says.
Michael Charlton, the chief executive of Think London, says he wants to persuade other U.S. tech startups and high-growth companies that “London is the location of choice.” Charlton is just back from a road show in Vancouver, BC, where he was highlighting commercial opportunities for companies around the 2012 Summer Olympics in London.
Of course, Charlton is looking beyond just the Pacific Northwest for his next clients. But, he says, Seattle has “a lot of dynamism in tech [companies] across the spectrum. It’s always a good market for us.”