Here are the week’s main news stories in the world of small business and digital payments:
Stripe valued at $35 billion following new funding
Online payments giant Stripe has raised $250 million in a funding round that values the company at $35 billion. The valuation makes Stripe the most valuable private fintech company in the world by far, and means its price tag has climbed by about 50 per cent since its previous funding round. The valuation also puts Stripe well ahead of other Silicon Valley behemoths, like Airbnb and Elon Musk’s SpaceX. San Francisco-based Stripe provides the payment infrastructure for companies such as Spotify, Airbnb, Uber, Deliveroo and Booking.com. Venture capital giants Sequoia Capital, General Catalyst and Andreessen Horowitz were among those that backed the company during the latest funding round. Stripe plans to use the funding to accelerate its growth in three key areas: international expansion, growing its product suite and extending its enterprise capabilities.
HSBC SME loan fund to increase focus on international businesses
HSBC will double the amount of money ringfenced for international businesses in its SME loans fund for this year, with the help available for the agriculture sector also set to rise. The bank’s 2019 SME fund will total £14 billion, a £2 billion increase on last year’s figure and the largest fund since the scheme was launched in 2014. The amount ringfenced for international businesses in the UK has doubled to £2 billion, with the sum set aside for agriculture rising from £300 million to £1billion. The remaining £11 billion is divided into regional allocations, to ensure the loans go to companies from all regions in the UK.
Starling Bank launches online banking for help small businesses
UK-based Starling Bank has launched Online Banking, an online app enabling its 66,000 business and sole trader account customers to better manage their Starling account on their desktop or laptop, as well as direct from their smartphone. Online banking was a key feature promised by the digital bank earlier this year when it was awarded a £100 million grant from the Capabilities and Innovation Fund, designed to increase competition and innovation in business banking. Online access was also high on the list of requested features from Starling’s business customers.
Greater SME support needed for no-deal Brexit
Small businesses are in urgent need of more government support to overcome a worrying lack of preparedness for a no-deal Brexit on 31 October, according to new research from the Federation of Small Businesses (FSB). In the first UK-wide small business assessment of no-deal preparedness, FSB’s research shows that among the 39 per cent of small firms that believe a no-deal scenario will negatively impact them, only 21 per cent have planned or prepared for anticipated issues and 63 per cent don’t think they are able to plan. Preparations for a no-deal Brexit have come at a high price, with the average cost for these businesses that have prepared, coming in at around £2,000. That average cost rises to £3,000 for smaller businesses that export and import.
SMEs plan to increase benefits to secure talent
More than half (53 per cent) of SMEs are planning to increase the benefits they offer staff over the next two years, according to research by insurance provider MetLife UK research. A nationwide study of firms employing between 50 and 300 staff – which make up around 34,000 businesses employing 3.3 million people – found that seven per cent will introduce benefits for the first time, while another 46 per cent will expand the benefits they already offer. Around 14 per cent of firms plan to expand the benefits on offer to staff substantially. A key reason for expanding benefits identified by the study is that SMEs say they struggle to attract and retain staff in the face of competition from bigger firms, with 27 per cent admitting their benefits package is not as strong as bigger firms.
Government to invest £100 million in SMEs to tackle global challenges
The UK government plans to invest nearly £100 million to back the ‘rising stars’ of small science and tech businesses across the country, with projects that will help tackle global challenges such as climate change, chronic diseases and the barriers to driverless cars. The £98 million investment is intended to enable UK researchers and small businesses to seize the vast opportunities in science and innovation and industries of the future. Of this money, £78 million will be invested in 78 scientists and researchers through the government’s ‘Future Leaders Fellowships’ scheme, supporting many of those working at “the cutting edge of the next scientific discoveries”.