995. News: Klarna finally files its IPO; Crowdcube target later stage investors; and 11:FS Holdings takes on private banking

26:11So what we've done is we always come at this as a marketplace. we have two sides to service. On the sell side, we have the companies, the founders, the employees, or the early shareholders who are looking for some liquidity. And on the buy side, we've got our big base of investors of all different shapes and sizes from sovereign wealth down to people who invest 50 pounds who want access to a slightly different stage of the asset class. So this kind of pre-IPO growth stage. Now, in some instances, we'll do that via primary fundraising. That's when a really late stage company is issuing new share capital and they invite our investors and often their customers to become shareholders at that point in time but increasingly we're doing more secondaries and that's because the underlying company is profitable doesn't necessarily require primary capital but is interested in different sources of liquidity either for founders for a management team employees or just early investors who've been on the cap table for a really long time So all of this has kind of come together at the same time as some relatively sweeping regulatory changes which are happening at the end of this year.

27:20The two big ones, as far as we're concerned, something you've all probably read about in the press a lot, which is the Pisces Private Intermittent Securities Exchange framework that the London Stock Exchange Group have just gone public as the first licensed holder, Pisces holder, that can operate a private securities exchange. And additionally, a thing called the POP regime, which is called the public offer platform regime, which means a private company in the UK or Europe can now raise an unlimited amount of capital from retail investors without producing a prospectus document, one line on the cap table.

28:01And to put that into context, an example I like to use is we go back and talk about like the Ask Sid campaigns from many years ago that if you're old enough you're like me or remember where people were invited to you know become shareholders of the post office you have a scenario now from from January the 1st next year where really late stage companies like Octopus Energy for instance seven eight million UK customers if a fraction of a percentage, a couple of percentage points of their customer base in the UK invested a thousand pounds in buying their shares. They'd be doing a 200 million pound growth round.

28:41We could do that in three or four weeks, no bankers, no advisors, no stock exchange, no public market listing, just quick, easy hyper engagement with their customer base prior to them going public. So all of these things have come together. And what we've done with the growth series is we're able to label these opportunities and start educating investors as to why diversification of their portfolios away from just early stage tax efficient investing into later stage pre-IPO investing is advantageous and exciting. And on the company side, it's about education of founders of late stage companies to say there are alternative routes through to liquidity available to you.

29:23And some of them are pretty damn exciting, you know, because you could invite your customers to become shareholders before you go public. You can free up some liquidity for employees, for early shareholders, often those of friends and family, and indeed for yourself. So we're super excited about it. Some of the regulatory changes which are happening in the UK haven't happened yet. They're happening at the end of this year. We can talk a little bit later about our first opportunity under the Growth Series banner, which is the big micro-mobility European unicorn giant bolt that certainly our European investors have been really excited about, often because they're users of the product every day.

30:06And underpinning all of this is our technology and regulatory commissions, which are all in-house, which are proprietary, which are unique, and enabling us to do these massive secondary liquidity events where we might be going out to 10, 20, 30 ,000 shareholders of private companies and saying, here's a really neat way for you to sell some of your stock to either institutional investors or retail.

30:34Laura Watkins:Amazing. Well, that was a comprehensive overview. Thank you. And also very exciting times. It sounds, I mean, it sounds good to me. Jamie, as former head of VC at 11FS, what was your take on this? Yeah, I mean, it's great. I think one of the points that Matt touched on that is worth spending a bit more time on as well is with a slowing liquidity market in terms of exit potentials for venture capital firms, what that kind of does is it means that the release of those funds takes longer and longer. Therefore, the ability to kind of redeploy that capital into the market or raise additional funds to be as active in the market becomes more and more difficult.

31:21So having more opportunities to realize that liquidity is just going to be great for the startup ecosystem because there's just more opportunity to generate that liquidity to kind of wash around and repeat the cycle. And I think in the UK in particular, with the London Stock Exchange not being entirely attractive for a lot of founder investors, I think having these side markets effectively, where you can create those sort of private public market offerings, becomes really, really interesting. when you add that together with the fact that the price of going public, the documentation that needs to be produced, getting a sponsor, all that kind of rigmarole, avoiding all of those trappings, I think makes this kind of very timely and I think just certainly what the UK is desperate for.

32:27I think we could definitely go further. Don't get me wrong. I think there's a lot more that can be done. but yeah I think this is great and I think we've seen other businesses in the States I think there are firms that have these kind of more private market offerings but yeah having something like this in the UK is going to be great I do have a question actually you asked me a question I've got a question for you the later stage business obviously is going to look to raise quite a lot of cash in some cases And I guess engaging the customer base, which I think is absolutely correct, you know, who better to bring in than your biggest fans?

33:12Do you foresee there being a minimum investment criteria, you know, minimum fund size or minimum, you know, can you do it for a pound? From an administrative perspective, what do you see being the kind of the operating model of this? Yeah, I guess that's part of our secret sauce is that all of the technology we've built over the years we've been doing this and all of the regulatory commissions we've layered on over the years we've been doing this mean we wouldn't blink an eyelid if, you know, Monzo did a secondary tomorrow morning and invited their customers to become shareholders once again and 150 ,000 retail investors poured into the opportunity in five hours.

33:58makes no difference to us. We wouldn't blink. The technology wouldn't skip a beat. Now, I couldn't have said that 10 years ago, but I can confidently say that today. I'll probably get a message from my CTO that I shouldn't have said that shortly. But no, one thing that, I mean, you touched on Jamie is that the government, the regulator, the London Stock Exchange, and, you know, people like Mark Austin and Julia at the LSEG should be applauded for the pace of innovation that we're seeing around the loosening up and the pro-private market agenda. If we want to make the UK attractive for businesses and technology companies and fintech companies to go public, we need to make it attractive for them to remain private here until they do go public.

34:54And alongside that we need to be better at financial inclusion we need to have more retail investors who are less in cash and more in uk productive assets and because a lot of our uk productive assets like revolute and monzo and moneybox are not public assets i.e i can't go onto my uh i can't you know speak to my advisor and get them to put a buy order in for for a block of shares helping those businesses and helping those retail investors get access to these assets while they're still private is really really important and we're kind of in the middle of that but there are a lot of people and a lot of organizations doing a lot of good stuff at the moment and forcing through regulatory change which we think is really positive awesome and uh mike i want to

35:43Laura Watkins:i want to bring you in you were kind of nodding along as as matt was talking there what's your your take on this as someone that also works in that sort of advice space yeah well i'm actually going to talk about it more as a more as a co-founder and somebody who built a startup but i think um i think you're absolutely right matt in terms of allowing companies to stay private until they can go public and i'm obviously unfortunately i think particularly for uk companies the option isn't just going public it's also being bought by a big player typically not from the uk not from europe uh who's going to come in and and uh and you know they're going to be able to realize the value of the shares and that's going to look like an attractive opportunity and And I get a bit upset when I see that.

36:25I think we've got great business building skills in this country. We've got great people who can build great businesses. And then going and seeing those businesses only achieve their kind of final potential under the ownership of something far outside of the UK, and then not seeing any of that last stage of the value. well, often because of the nature of it, you know, the actual multiples are huge, but all of the hard work has kind of, you know, my mind already been done in those early years. So I think anything that gives those companies options, gives the founders and the seniors people at those companies the ability to, you know, take some value out, you know, settle things that, you know, they need to, you know, allow them to justify continuing the business, continue growing it, continue taking it to reach its potential is a good thing.

37:19and I think kind of we just need more of that kind of thing to ensure that those really exciting businesses that are genuinely innovative and kind of have real potential stay in the UK and we see more of the value coming back through the ecosystem here. I guess the question I have is, you know, I'm a, I should say, I'm a client of Monzo. They've done this, you know, they've done the secondary and now I've got a private share. What can I do with that? And is there a secondary market for myself to trade? And I think that is a very interesting proposition, which is, I don't know. I don't know how far this new, I need to familiarize myself, I think with those regulations that you mentioned.

38:09But I wonder if you've got a comment on that as well. Yeah, I mean, if you bought a Monzo share tomorrow morning, you'd have to hold it until they went public or had another liquidity event. But the beauty of giving everyday investors access to late-stage assets is the fact they're late-stage being that much closer to a liquidity event, be that whatever, be that a bigger bank coming to buy them or them ultimately going public. It's a long old journey if you invested in Monzo in 2015, 2016. It's been a very lucrative journey, but it's a long journey. And Mike, you're right. For founders, we in the UK and Europe are becoming much more comfortable with the concept of secondary liquidity for private companies.

38:52It's much better understood in the US where it's not weird. It's not the sign of a distressed company. It actually allows you to focus on continuing to build your business, take some risks without worrying about your family's future and whether you're going to lose your house or not. um so you know the last point i think you mentioned is keeping that value in the uk like why should a you know a teacher's pension fund in canada benefit from all the value creation that the monzo or revolute or anybody else has has done by remaining private in the uk when a uk retail investor who may also be a customer of that company and help them get to the point they're at not enjoy some of that benefit as well.

39:36So we're pretty passionate about it. Jamie, don't spend too many evenings awake reading up on this regulation. Unless you're in the space, it can be slightly dull. But the snapshot is, for us, it's super exciting. For retail investors, it's super exciting. And for private companies, it's super innovative and offers different forms of liquidity. And all of that is good stuff. Cool.

40:03Laura Watkins:All of that is good stuff. That is a good place to end the first half of this show. There you go. On that note, we're just going to take a quick pause back shortly.

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41:16Laura Watkins:Before we get back into the news, I wanted to tell you about our latest Fintech Insider Insights episode, which is all about partnerships. We're all searching for the perfect partner, whether it's in life or fintech. And let's be honest, in today's fast-moving product landscape, the right partnership can make or break your success. They're no longer a nice-to-have, they are business-critical. Whether it's scaling faster, accessing new markets, or simply building better products, teaming up is often the only way forward. And in our latest episode, Benjamin Ensor is joined by a brilliant panel of experts from Adjian and Google to explore what makes the perfect product partnership and how to keep the spark alive long after you've found the one.

41:54Laura Watkins:because in fintech, finding your match is just the beginning. This episode is out now. Just scroll down to the podcast right below this one. And now back onto the news. And our next story is a much-anticipated headline. I think we all saw coming, but now it's finally here. Klarna has filed for their U.S. IPO but equally launched a debit card in Europe. This story in many places. We took it from Finextra. Klarna has formally filed for a U.S. IPO planning to list its shares on the New York Stock Exchange. In doing so, the company aims to raise between 1.27 and 1.46 billion US dollars with a projected valuation of up to 14 billion dollars.

42:33Laura Watkins:As if they weren't having a busy enough week, it has also introduced a new Visa-powered debit card in Europe where users can make payments using flexible options such as Payinfor or Paylater, all within the app ecosystem. The aim is to give consumers more control and transparency over payments when compared to traditional credit cards. And this new card is part of a broader partnership with Visa, enabling it to be used across the extensive Visa network, both online and in person. Obviously, as I just said, this Klarna IPO has been very much anticipated, so much so that we covered it all the way back in episode 891 of FinTech Insider News in August last year, so 100 episodes in a year ago.

43:12Laura Watkins:So here is a clip from Sarah Kachansky, at the time CEO of FinTech Wales. Well, they've been open and clear that an IPO is very much on the agenda. I think the question is, you know, what are they trying to build? What are they trying to do with it? It's growth. Is it growth of revenue? Is it growth of customers? Because all those things are going to be really scrutinized if they choose to IPO. So it's a case of what are they trying to achieve with this, which means they've done it now. as opposed to after they go for any kind of fundraising or exit or whatever it is they're choosing to do next.

43:47So I think that's going to be interesting to watch to see what's their goal.

43:53Laura Watkins:Okay, so here we are back in September 2025. What do we think is their goal? You know, they announced an enormous fundraise. Their revenue has climbed. They've got 111 million active users. what do we think is going to happen at the point of IPO? Maybe let's come to you first, Jamie. Yeah, I think it's, I'm quite excited about this because I think it's the bellwether for a revolute up-and-coming IPO as well. I think that... Do you think this is the first domino to fall and then the others will follow? For me, I would be watching this incredibly closely. you know these fintechs who have these you know gigantic user bases you know larger than than many than than than you know than all the big banks that we you know we whose brands we all know you know so these guys new bank revolute i think it would be it's going to be incredibly interesting to see what happens the six 12 months after after this um this ipo the performance of those shares post listing.

45:06And yeah, and I think that metaphor of the dominoes falling, I think is, I think potentially be, maybe you'll get you and I a little voice clip in 50 episodes time or however many episodes time and play with some other great guests and we'll be proven right. But yeah, I think it's very interesting.

45:28Laura Watkins:Let's see. Mike, what was your take? Obviously, you kind of expressed disappointment in kind of these fintechs choosing to IPO outside of the UK, which Klarna has very much nailed on from the beginning. What's your take on this? And kind of what about the timing? They kind of started in April, then they rolled it back with all the tariff news, and now they've decided now is the time. Is that significant, do you think? I think it's interesting because, you know, obviously, on the other side of things, they've made so much buzz about AI. They've talked an awful lot about how they've massively reduced their workforce, how they're really embracing it.

46:08I think there was a lot about that narrative that felt like they were gearing towards this. And I think at the same time, there's potentially reasons to think that there won't be a better moment. I think that all of these businesses, a lot of the challenger banks included, a lot of them are kind of based on the sort of credit model. Obviously, buy now, pay later. That's always, I think, systemic risk. And probably, yeah, I think client has done really, really well. For me, I think it's probably difficult to think about how much better it could do at that, particularly given kind of the macroeconomic circumstances.

46:54So the obvious route is, okay, well, let's make the most of that massive user base. Let's move into debit cards. Let's move into some of the other services and cross sell across. How successful would they be at that? Well, it's interesting because unlike things like the challenger banks where they came in, I think with a really, really, you know, consumer focused, feeling like the good guys, I guess, against the kind of banks, Klarna, I think has been much more of a transactional kind of product. It's very much like we give you these products when you want them and we deal with the messiness of the credit.

47:32Does that translate to a deeper relationship with your customer in the way that people like Monzo have really went out their way to feel like they were involving their customers. We've already talked about crowdfunding, but things like that. I don't know. So I think the timing makes sense. I think if they wait much longer, the moment I think will have passed. And I think that they've done really, really well. They're an interesting business. But I think behind some of the AI stuff and some of the noise, I see potentially quite big risks for a business like this. Yeah, it's interesting as well because when Trump came in, And everyone was expecting it to be four years of just like crazy IPOs, stock market going ballistic, drill, boby drill, et cetera, et cetera.

48:23But, you know, tariffs, you know, the economy slowing down is what we're seeing. And, you know, you picked up particular about the business model of Klarna being, you know, credit based. And, you know, the two to three year effects of, you know, the ripple effects of those tariffs and that economy slowing down, you know, whatever happens when, you know, at the end of Trump's term, whoever is there, is it going to be as poppy in the stock market? And will those tariff effects be realizing in the real world? You know, will those real person impacts be being felt? So from a timing perspective, maybe this is it, you know, because you do it in a couple of more years and maybe the numbers aren't so good.

49:20Laura Watkins:You reckon jump now, maybe, rather than wait and miss your time. Potentially, you know, I'm sure someone, they've paid a lot of money to get good consulting around when they should be doing this. So it won't be an accident that it's now. And so those reasons are either capitalized on the opportunity of an absolutely banging stock market, or if you want to get liquidity in the next three years, actually, this is the time to do it. Because maybe macroeconomically, it's not going to be as great in the next few years with what we're seeing as the shakeout of all of these relatively unpredictable policy changes.

50:00Laura Watkins:Yeah, Matt, what's your take on that, on the kind of timing and the opportunity space? And is there something to be said for being the first domino? Like, does that add any benefit to you or not? Or is it better to kind of be the one that goes second, having taken learnings from the first? I'm not sure I agree with the whole domino statement. No? Okay. Tell us why. I'm not sure how much of a leading indicator Klarna listing in the US is for a Nubank or a Revolut. Like, they operate in a different level of the atmosphere. those companies have an abundance of private capital still available to them you put stripe in that that bracket as well um there is no requirement for them to go public right now there's as much primary or secondary liquidity as they could ever possibly need and they're profitable anyway um so why the rush to go public i don't think the teams over there will be watching with bated breath at how the the the listing goes for Klarna in the US I hope we don't see the first day pop that we've seen recently where basically employees and founder and early shareholders gets shafted and the bank's clients reap the benefit of it being mispriced um I know if you ever follow Bill Gurley in the US, he's very vocal on the absurdity of that situation.

51:29But he's also been very vocal on the, that's why the stripes of the world and the revolution of the world are staying private, because they get to set the terms, they do it on their timeline, they can do it privately for the most part. And that for them is more attractive at the moment. I think the other crying shame is our inability to manage a listing like this in the UK or Europe and that it has to go to the US. Is that ever going to change? I don't know. As I said previously, there's a lot of innovation happening in the UK right now in and around the private and public market interface. But until the capital allocators in the UK, I mean, the really big ones, the pension funds and so on and so forth, are more comfortable pricing risk and pricing a business like Klarna when it goes public, I don't think we're going to see another Klarna list in the UK for a while.

52:29Laura Watkins:Jamie, kind of building on Mike's point around Klarna's movements in Europe, starting debit cards, etc., trying to cross-sell. They have this enormous kind of user base of 111 million. They're partnered with Visa. That's obviously a pretty big partnership there. Are they trying to become a challenger bank without actually saying so? Like, what's their game plan here? Well, I think Mike was right to call out the, you know, obviously, it's not a super fragile business model. They're, you know, they're incredibly successful business. But every fintech, you know, every fintech owner, when they go to bed at night, they close their eyes and they dream of being a bank.

53:07Um, because it's the, arguably it is the terminus of, um, a lot of innovation. You know, where do you go next? What am we going to, you know, what features are we going to offer our clients? You know, what products are they crying out for? Um, you know, generally speaking, the trend, the trend pushes you that in that direction. Um, you know, I remember in the early days when, you know, talking to Tom Blomfield about GoCardless, he was like, well, actually the business I want to make is a bank, you know, not necessarily GoCardless because all the features that we want to offer require that level of, you know, regulatory scrutiny, but also, you know, holding cash, moving money, like providing that level of service.

53:51So potentially this is them on, you know, on that journey. I think as a sidebar, I think it's great to see Visa winning a big gig like this. I know MasterCard have kind of had a big swing across a lot of the challenges. So it's kind of good to see their investments in some of their newer products kind of working out. And yeah, like I said, I think it's the natural progression of a lot of fintech businesses is that they start thinking, let's put cards in markets and let's become a bigger part of our clients' financial world. But that's interesting, right? For Klana, for instance, if you look like a bank and you smell like a bank, at what point are you going to be valued like a bank?

54:37And I wonder whether you go too far one way and too far towards, like I look and feel like a traditional bank, therefore I'm going to be valued like one. Interesting.

54:50Laura Watkins:We will have to, I guess we'll have to wait and see. They, you know, as we said at the top, They're trying to get a projected valuation of$14 billion. Whether they get that or not remains to be seen, but we will obviously keep an eye on this when it actually does list and how its initial floating does, and we will keep you updated. But yeah, this has been very hotly anticipated across the last year, clearly, if we covered it all the way back in last August. So yeah, we will see how this one turns out. And maybe, yeah, we'll be quoting you guys on the next episode when we do. I'm going to move us on to our next story, which is that Xero has launched an AI super agent.

55:31Laura Watkins:Xero has launched new features for its AI super agent JAX, or JAX, designed to automate tasks, deliver insights, and adapt to each small business's unique operations. JAX replaces scattered tools with one intelligent interface, automating workflows like bank reconciliation and data entry while keeping users in control. It provides proactive, actionable financial insights by analyzing business data and leveraging OpenAI's web research for real-time information. With growing demand for AI, 73 % of zero users have already adopted it, and over half of surveyed U.S. small businesses plan to increase their AI investment to stay competitive.

56:10Laura Watkins:To tell us more about this launch, we have a voice note from Chief Product and Technology Officer at Xero, Dia Jolly. JAX allows us to reimagine the entire customer experience in Xero, to be one that is more intelligent and personalized. Instead of many disconnected tools and experiences, JAX provides one intelligent interface to unify your entire business, learn your rhythms, automatically adapt and create an experience that is unique to you. JAX automates manual tasks and workflows like data entry, bank reconciliation, and getting paid, completing them in seconds with accountant-level accuracy and appropriate oversight from you or your advisor.

56:57This true just-done automation helps you move faster, stay compliant, and scale effortlessly. Jax also moves beyond static reports to deliver actionable insights that move the needle. It leverages trusted data from your business, the web, and apps to deliver personalized, timely insights. With a unified view, Jax spots opportunities and issues, helping you move faster and make informed decisions.

57:30Laura Watkins:Well, thank you, Tandia. Mike, I'd like to come to you first on this one as our AI expert in the room. What's your take on this, particularly around the sort of just done view on automation and kind of like what is the sort of, as we talked about earlier, the kind of human versus AI impact here? Yeah, I think as ever with AI, you've got to pick through the PR a little bit to understand what's actually, you know, what's changed. I think this is as much an opportunity to make some product changes, I think. I think there's obviously the developments that have been, you know, that they've mentioned things like OpenAI, being able to use that to go off and search for the latest data.

58:17But I think actually this is a product reorganization of pulling a bunch of features that probably existed in some form in various parts into a single place and probably throwing in a bit of AI glitter to kind of improve things and to give the customers a little bit of a feel of something like ChatGPT. But I think that fundamentally, the kind of idea of just done automation that completely replaces an accountant, for me, is a bit of a fantasy. I think that there's obviously a huge amount that you can do with automation. You can take away lots of painful, boring work, the kind of busy work, which in accounting, there's a reasonable amount of that.

59:06But there are a whole bunch of decisions, particularly with large companies, where, you know, when it comes to accounts, if you get it wrong, people potentially go to prison, right? People potentially, you know, people's liberties potentially on the line. And now, obviously, that sounds a bit dramatic. But I think that the real risk with sort of wholesale adoption of AI tools that and the idea that we can just sort of outsource it all to AI really risks making the whole sort of industry being you know robots kind of reviewing the output of other robots reviewing the output of other robots you know this kind of this kind of it doesn't get to the those are the bottom of actually what we're trying to do with the candidacy which is properly scrutinize businesses, look at them as individual businesses, understand their risks, understand how they're doing.

1:00:02So I think this is no shade on zero. I think this is a pretty solid product development. I think what they've done and the way they've thought about how it should work from a UI perspective is really solid. I think that there's a lot here that probably will speed up people's usage of it, will speed up the particularly small businesses' usage of the tool. But I don't think it's sort of the death knell for accountants or even really, I think, a huge structural change in how we interact with those. Because the reality is, companies like Xero are responsible for startups being able to automate a lot of things like payroll and stuff like that for a long time now.

1:00:44That's been the case certainly since I've been running the company. And we already only go to an outsourced account. and certainly in the early days, these days a bit more, but when we had something pretty specific or something pretty technical, like options or something like that, where, you know, we really needed kind of best advice. So the jury, I think, is out on how fundamental the change it will be. But yeah, plenty of a lot to look forward to. Yeah, and I've got a similar feeling about this, which is, you know, is this just a new UI on top of existing surfaces that you can kind of get in Xero?

1:01:28You know, instead of using my mouse to, you know, navigate to the bits that I know I can navigate to, you know, writing a prompt to surface those insights, I think is kind of the question. And, you know, is that AI or is, you know, is that just kind of a new user interface is the question. The other one that I had was, you know, I could see this being really useful for someone like me who is not an accountant and has never worked in a financial department before. And maybe there are occasions where I want to query this information in a way where I'm asking the questions that I know to ask and receiving information in however it's kind of being presented to me using the data set that it sits on top of.

1:02:14But my general experience is that if you're at the point where you're using a platform like Xero, there's generally going to be someone there, either they're a full-time employee of yours or they're a fractional finance person of yours who was, you know, who is using that, that product. And therefore I'm kind of thinking like, I don't know who it's really that, I don't really know who it's for. Um, and you know, maybe it's cause I've not used it and, you know, it's probably not for me, um, just because I don't really get stuck into the, into zero but yeah i think mike's point is interesting around separating the pr bits from the you know from the genuine innovation and maybe there is genuine innovation here and you know i'm not not necessarily seeing it um but um but yeah i i i got a question mark on this one i think

1:03:04Laura Watkins:okay uh matt what's your take question mark or more positive probably the same if i'm honest I mean, we've seen a pretty public display of somebody in the public eye this week getting inaccurate advice and ending up causing them a considerable problem when it comes to finance and accounting and tax. And I agree with Mike, right? If there's a big trust layer here, if you get something wrong from an SME accounting or reporting perspective in the UK, you can ultimately go to prison. so it'll be interesting to see how it evolves but to jamie's point is it is it a window dressing above something that's already there i don't know the answer to that question but it might well be ai glitter as mike called it which i really like i like that a lot well i think the challenge is if you're a company like xero you need to have an ai piece because the other side of it is i think there will be people out there who will be taking their their spreadsheets there and they'll be uploading it to ChatGPT and they've been asking, you know, do you have any news for me?

1:04:13And I think that's not great either because, you know, there's a huge amount of data there which you lose control of very quickly as soon as it goes into one of those ecosystems. There's no real understanding of the UK regulatory picture from these companies. And I speak of that as someone who interacts with them a lot. You know, they're often US-based. They have quite a different perspective on moving fast and breaking things. And so it makes sense for someone like Xero who's going to have a lot more of understanding of those concerns, who can have people who are going to be able to do that to bring it in-house, to put something in the tool.

1:04:48I think that's a good step. But I think it's hard. You know, somebody who's spent the last few years looking at the AI developments and thinking really seriously, okay, I understand the technology, but understanding how that's actually going to change things. It's really difficult to predict because a lot of the industries it's disrupting. I think, you know, they have regulations, they have friction that is not there just to make things slow. You know, it's there to provide protection. It's there because they're mature industries that have built up these systems of governments over, you know, hundreds of years.

1:05:31And I think that's not going to, for all the excitement that AI brings, and it does, you know, I'm still very excited. I'm CTO of an AI company after all. I think it's...

1:05:40Laura Watkins:If you weren't excited, you're in the wrong job. Exactly, exactly. No, it's one of those hard positions to take because I think as soon as you understand the technology, you understand what it's actually capable of and the limitations. It's a lot more of a tricky line to thread to see exactly how we're going to use it, exactly how we're going to get the most out of it. Yeah, that's such a point. And also to your earlier point as well, that like kind of zero have to kind of employ an AI strategy at some point, because otherwise their customers are just going to be using AI in a potentially less informed way anyway.

1:06:10Laura Watkins:But yeah, we will keep an eye on this one and see how it develops. And on that note, we're just going to take another quick pause here back shortly.

1:06:20Hear that? That's now Crispy and McCrispy Strips meeting creamy Caesar sauce. sounds extra crispy. Caesar sauce at McDonald's for a limited time. Ba-da-ba-ba-ba.

1:06:38Laura Watkins:Okay, now for a quick look at one more newsworthy story this week that we don't have time to cover in full, but we think you'll find just as interesting. And that is that UK open banking hits 15 million users. The story was on payments. Over 15.6 million people and businesses in the UK now use open banking services nearly one-third of all UK adults. In July 2025, open banking services were accessed a record 2 billion times, marking a 3.5 increase from June. Active users have risen by 34 % over the past year, highlighting rapid adoption. Open banking is increasingly embedded into everyday UK life, from paying taxes to shopping, thanks to its speed, security and trust, according to Open Banking Limited CEO Henk Van Huel.

1:07:24Laura Watkins:The recent Data Use and Access Act is paving the way for the next phase of open banking, along with expanded open finance and smart data initiatives in the UK. So my thoughts on this, you know, we cover these stories occasionally of like these milestones. Is 15 million an impressive number? Well, I kind of ran some initial maths on it. And maths isn't my strong point, so apologies if these numbers are very rough. But if we're looking at sort of the UK population of 70 million, average adult population about 50 million and 15.6 of them are using open banking. One in three actually isn't that bad.

1:07:58Laura Watkins:And especially with an aging population and an increasing number of that adult population may not be tech savvy. You know, still that one in three is sounding pretty good. Equally, I looked this up and the last time we covered this milestone on the show, open banking in the UK had reached 11 million users. But actually that was only back in June of this year. So open banking usage in the UK has grown by over 4 million users in three months. And to me, that's actually the more impressive number, the speed and size of the adoption in those three months. Open banking has kind of always had a reputational issue.

1:08:30Laura Watkins:One of our hosts, Benjamin Enzo, has written a whole research report on that in partnership with GoCardless, and perhaps is missing that one killer use case, such as a direct debit to pay bills, etc. And it's maybe sort of struggled to get going since it launched in January 2018. But clearly, its value is starting to syndicate out. It's being used for more and more things, as we just said. And people are actually trusting their banks and third parties enough to share their data across both parties. And adoption is clearly ramping up. So it'll be interesting to see if that J-curve keeps going. And to see where it's at in another three months, could it be at 20 million?

1:09:07Laura Watkins:We will find out. and finally now time for something a little bit lighter both figuratively and literally to finish this week's news show and the headline came from the sun so you know forgive me chocky horror quality street christmas chocolate tubs shrink again with six fewer sweets so uh for our international listeners the tub of well-known british chocolates known as quality street that traditionally comes out at christmas has since announced that it's going to be decreasing from 600 grand to 550 grams, now containing approximately 57 chocolates compared to around 63 last year. Despite the smaller sizes, the tubs will still cost roughly the same, around five to six pounds in supermarkets.

1:09:46Laura Watkins:And over the last 10 years, the tubs have progressively shrunk from 780 grams to 650 and now to 550. And Nestle cites rising manufacturer ingredients and transportation costs as a reason for the smaller tubs, while still claiming that the product offers good value. Shrinkflation is something we've discussed quite a lot on this show recently. People getting outraged about shrinking size and increasing price of Freddos. Likewise, meal deals. Now we're on kind of Christmas classics. Obviously, you know, we know we're in autumn when we're starting to discuss Christmas chocolates. What's your guys' take on this?

1:10:29We're really plumbing the debts, aren't we?

1:10:31Laura Watkins:Yes. My feeling on this from a startup perspective is that on the long run, this will be good for startups. Maybe I'll just justify that. But I think increasingly we're seeing, this inflation annoys me, it annoys me hugely and you see it all over the place. And if you actually look at the stats, I think it's well above the corresponding inflation in the raw goods and the labor, you know, the amount that ultimately consumers have basically begun to be overcharged by. But my feeling, and maybe this is with all the lack of knowledge of someone who's not directly involved in the industry, but my feeling is then that there isn't the competitive pressure on these massive, you know, very long-established brands to stop them doing it.

1:11:21And I guess the counterpoint to that is then when they becomes a kind of a vacuum like that for compressive pressure, that's an opportunity for startups. And, you know, in confectionery, I mean, the ones that come to mind for me are a lot of the, you know, like the vegan-based sweets. You see things like candy kittens, things like that, you know, lots of these smaller companies growing, but then obviously they get snapped up. but I do think that if there's a positive to it it's that I think I don't know I think increasingly these are deals that the consumers are just not going to go for you know I mean if you go on Reddit now and you put in things like quantity suite you already hear about how much palm oil is in it now these days how rubbish the chocolate tastes compared to what it was that we remember even from 15 years ago or something um my view is it's not sustainable how little cocoa is actually in there as well you know they're just they're putting like 49 carib or something um just enough to say that it's still i was not expecting i was yeah i was not expecting this to bookend the fintech discussion mike you did an excellent job of segueing uh a discussion point about quality streets into some sort of startup analogy and what founders could learn for it which i mean he's got the makings of an excellent LinkedIn post, if I'm honest.

1:12:47For me, number one, who cares about quality streets? They're awful. Nobody eats them anymore. They're rubbish. The second is, it's a crying shame that we can't be more present as a society and not be focusing on Christmas chocolates on the 4th of September. Like, let's be in the moment now. That applies to all startup founders. That applies to my children. That applies to everybody, all the human race. Let's be more present. Let's not worry too much about Christmas. and there really is only one Christmas chocolate that everybody should be worried about and it's definitely not quality streets.

1:13:20Laura Watkins:And it is instead... 100 % Terry's chocolate orange. Yes. No shrink-flation. Thank you. No shrink-flation there. It's always looked like an orange. It's always been the same. I've won fire. I got another thought as well, which I think we should all just spend a little bit of, you know, a little bit of time thinking about the intern who every year the editor turns to and goes, you've got to count the chocolate out this year. You've got to dig out the new story from last year. You've got to do the arithmetic. How many fewer sweets have we got in the box this year? And I want that on my desk in the morning.

1:13:59So let's all just have a moment of silence. Nestle haven't had a good week, right? Nestle have not had a good week. We've piled on unnecessarily with a story about the fact But, you know, streetflation is now happening to their quality street party mix. Hang on, what's happened to Nestle this week? I've missed that. It's been a slight CEO upheaval. Oh, God, yeah. Yeah. Another Coldplay style incident. Is that right? I can't comment, but yeah, it's not been a good week for them. But the more I think about it, the more this is a such a great story. Because the point we made earlier about, you know, British, you know, UK businesses, for example, being bought out.

1:14:37I mean, chocolate is all about that, isn't it? You know, fries, Kit Kat was originally like a UK, now it's, you know, sown by Nestle and then she's in the US. You know, Cadbury famously has been brought up. I'm imagining the edit of this episode is just a really slow volume down of us having this conversation, which implies that it just goes off for ages. I agree.

1:15:04Laura Watkins:I am very much enjoying Mike valiantly trying to pull it back to focus. But yeah, so I'm going to end the show soon. However, despite Matt's protest that we should focus on the present and not be worrying about Christmas, he's equally given us an impassioned plea for his favorite Christmas chocolate. So we know that that's the chocolate orange. Jamie, what would you say yours is? My favorite Christmas chocolate. I mean, anything that comes out of an advent calendar, I think, tastes different. Maybe it's because you have it at like seven in the morning, but at the Christmas, I quite like that. Nice.

1:15:42Laura Watkins:Mike? Yeah, I'm going to add myself as a foodie now, but Montezumas do like these peanut butter balls. Oh, amazing. The big buttons. Oh, well, they do the big buttons, which are amazing. But the peanut butter, like, chocolate-covered peanut butter balls, that's where I say every Christmas it's the Rolls Royce of chocolate brands that is wow you've got expensive taste Mike very nice for me I would go a bit more basic I would go like the Lind you know Santa or the Lind Snowman that they do but it has to be them not the Lind Balls they're too sweet not them proper Lind chocolate that is the way forward for me listeners please do get in touch maybe closer to December with what your favourite festive chocolate is and on that note that wraps up today's FinTech Insider News.

1:16:32Laura Watkins:Thank you so much to today's guests. Where can people find out a little bit more about you and your companies? I think, Jamie, you already gave this plug earlier in the show, but I'm going to give you a shot at doing it again. Well, you can just reach out to me on LinkedIn. Jamie Campbell, 11FS will probably return me. So, yeah, reach out there. LinkedIn. Okay. And Matt? Yeah, you can find me on LinkedIn, Matt Cooper. Not the other Matt Cooper that's also in FinTech in London. that confusion happens a lot, unfortunately. And you can head over to CrowdCube. We've got tens and tens of amazing investment opportunities on there at the moment.

1:17:09And we're going to have a super busy September with some incredible growth brands offering you the chance to buy shares in the business. So pop on over there.

1:17:17Laura Watkins:Fantastic. And Mike? Yeah, we're at multiply.ai and I'm always available at mikeatmultiply.ai and yeah always up for chatting about AI more generally we do a lot of talks we do a lot of more general stuff that's not just about our business we run a whole bunch of talks with Google every quarter so check out those and yeah always excited to talk about where the world is going it's a really exciting time for AI despite some of the things that I've said today Fantastic, thank you as for me you can find me also on LinkedIn or 11fs.com or on this podcast. So thank you so much for listening to today's Fintech Insider.

1:18:01Laura Watkins:If you like what you've heard, please make sure to follow us on your favorite podcast platform of choice. If you really like what you've heard, please do share it around with colleagues and friends. And as always, if you want to join the conversation, find us on social media, just search for 11FS or Fintech Insider, or you can email me in the team at podcasts at 11fs.com. Thanks again, and goodbye.

1:18:49The Devil Wears Prada 2 We'll be right back.