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“We have a saying in India,” reflects Rajesh Agrawal, founder of RationalFX, a foreign exchange company offering online transfers. “When you are young, spend time with older people to become wise; when you are old, spend time with youngsters to learn new concepts.
“I am getting older.”
At just 38, Agrawal is already worth £90m, according to the Sunday Times Rich List and has been running his payments company since 2005.
Dressed in a bright pink striped shirt, grey jacket and canvas jeans, not so long ago he was at the same stage in life as some of the young people frantically trading currencies on phone lines outside his office.
But Agrawal developed his entrepreneurial mindset in the sleepy Indian hinterland, rather than London’s high-rise Canary Wharf.
From the age of 10, his parents sent him from his home city of Indore each summer to help his cousins in their family restaurant 60km away.
The young Agrawal refreshed the old-fashioned menus and designed an intercom system for waiters to relay orders to kitchen staff. After graduating in business administration from his local university, he moved to the northern city of Chandigarh, “the Milton Keynes of India, full of roundabouts”, to sell the services of a web design company to local clients.
“This was 1999. First I had to explain to people what the internet was — that was the hardest part — and then how a website would benefit them,” he remembers.
Agrawal’s pitches earned him a prized transfer to Mumbai and paved the way to a risk management role in a forex company, offering the rare privilege of free internet access and contact with international clients, one of whom offered him a job in London, in 2001, where he found accommodation in Harrow, a suburb in the north-west of the capital.
“It was surreal. I was looking for high-tech hubs and skyscrapers, but found people speaking Gujarati, eating Indian foods and watching Bollywood films,” Agrawal recalls.
“Here I was in a company with 20 people, only two of whom had computers. This was the 21st century and one lady had the job of printing off all the emails and distributing copies to staff,” he says, still struggling to hide his incredulity.
“In Mumbai we all had laptops, the latest software and could work from home when necessary. London didn’t even have fast broadband or dial-up connections.”
But it was the UK financial system he found most primitive, especially compared with Indian institutions. “Banking was very expensive and service levels poor,” Agrawal says. Transfers between accounts in the same bank cost £30 and took three days. “I could never understand why this was.”
This lack of cutting-edge services led him to set up his own electronic transfer business in 2005 with a fellow Indian expatriate, stealing a march on UK banks plagued by a poor reputation from overcharging.
“The whole reason that businesses like ours exist is because the banks are not doing their job properly,” says Agrawal, looking out across a rainy Canary Wharf from his 32nd-floor office.
Small and medium-sized enterprises have been hard hit by the mis-selling of derivatives and structured products, he says. “Banks need a different mindset to work with entrepreneurs, who want a bank to help them grow. But unfortunately, they see money as money, wherever it comes from.”
Agrawal started his business with a £20,000 car loan, despite never having held a driving licence, and pumped the cash straight into his start-up. Just days earlier, his bank had refused a £10,000 request to fund his business.
“I know plenty of successful entrepreneurs who only survived by maxing out credit cards for finance, after their ideas were turned down by banks,” he says.
He is much more complimentary about the UK’s infrastructure, business climate and — sometimes — positive approach to immigration, which has turned London into an “entrepreneurial hotspot”.
Agrawal, who is been backing Labour politician Sadiq Khan in his mayoral candidacy, employs 70 staff of 22 different nationalities.
“If you turn immigration off, you will have a huge skills shortage in this city,” he says. “You can’t get skilled people in Paris as the immigration system in France is so poor. In London, you have Indians and east Europeans working side-by-side in fintech start-ups. You don’t get this anywhere else.”
According to the Tech City initiative and Oxford Economics, London is awash with digital entrepreneurs. By 2025, they estimate there will be 45,000 digital technology companies in London, generating more than £12bn for the city’s economy.
London wins hands down as a business, technology and financial hub to attract start-ups, says Mads Munk, a Danish media entrepreneur and chief executive of the M2 group, who has chosen the UK’s financial centre for the expected flotation of an entertainment unit.
“I don’t believe there is any place to start up an entertainment business apart from London,” says 47-year-old Munk, who worked in a betting shop in London’s Highgate for two years in his teens, living in a YMCA hostel, before returning home.
His first business was selling popcorn, before he eventually formed his M2Film venture, which has achieved success in producing animations for several high-profile companies.
He employs 230 people in London, Mumbai and Bangkok, posting a pre-tax profit of £2.9m in 2014.
“Currently there is no city, apart from London, really biting at our ankles,” he says, recovering with a beer and cheeseburger at the Groucho Club, a private members’ club in central London, after an overnight flight from Los Angeles.
Munk claims London offers a favourable tax environment for the film industry, top-quality staff and access to investors and financial services.
The most valuable of these to his global business is currency expertise. “We have a lot of activities in Thailand and the baht can easily lose 20 per cent. That is a lot of money with the margins we are working on and we need insurance against this.”
Most banks as yet fail to meet the needs of entrepreneurs, particularly in the digital sphere, claims 31-year-old James Haycock, a serial entrepreneur and founder of Adaptive Lab, which develops technology solutions and innovations for major companies.
“As an entrepreneur, my expectations are set by my daily digital experiences,” says Haycock, in his office above a café in the shadow of Old Street’s Silicon Roundabout, on the edge of London’s trendy Hoxton.
“I don’t see that quality offered by either my personal bank or the company’s banks,” he complains. “I have banked with them for 15 years and they have not built up a good picture of me, nor are they able to offer a tailored personal experience.”
While entrepreneurs are clearly disappointed with the services banks are providing them, many leading wealth managers are stepping up their efforts to service this growing sector.
An HSBC Private Bank representative says, “all of our clients are entrepreneurial” and it provides “critical” regular networking events.
“There are certainly more clients who fit this description than ever before and they are younger, coming from all over the world,” says Dina de Angelo, director of Pictet Wealth Management. “London is increasingly important. Geographically it is in the best possible position.”
Despite criticism of banks from the business community, she says, “the pace of change within the industry is improving on every level, most notably in the digital space”.
Banks are increasingly targeting entrepreneurs according to their business sector, such as financial services, new media, energy or healthcare.
“We aim to create an exclusive, discreet and relaxed atmosphere, where wealthy families are able to grow their knowledge and share strategies confidentially,” says Luigi Pigorini, regional head for Emea of Citi Private Bank.
However, he applies an element of caution about potential customers. “Like all client segments, we are selective in which start-ups we take on as clients,” he says.
Berenberg, a German bank increasing its presence in London, is also aware of the need of many start-ups for additional finance and aims to facilitate these deals where possible. “We try to support start-ups by introducing possible business partners from our network, or private equity investors or financing partners,” says Dominik Helberger, head of the entrepreneurs desk at Berenberg.
It is this networking that growing businesses find invaluable.
“There should be banks dedicated to entrepreneurs, who can put them in touch with one another, organise classes, mini-courses and networking events,” says Agrawal, complaining that these facilities are scarce for smaller, more innovative entrepreneurs. European banks should learn from “more pro-active” US peers in Silicon Valley, he adds.
But lessons from Silicon Roundabout can be just as valuable for the banks. “A lot of people make jokes about nerdy Hoxton types and our own Tech City,” says Adaptive Lab’s Haycock, who was actually born in Silicon Valley before returning home. “But we are on the map globally and punching above our weight. There are events in the evening, it is vibrant and you bump into people with ideas in the coffee shops. We have created a cluster that attracts talent.”