Star entrepreneur who launches fintech companies into new space

Raymond Snoddy talks to one of the most influential businessmen in London’s booming Tech City

There could hardly be a more appropriate person than Eric van der Kleij to run Level39, the largest technology incubator in Europe.

As entrepreneur in residence on the 39th floor of Canary Wharf’s One Canada Square, he can highlight pitfalls to small start-up companies, alongside cutting-edge financial technology companies.

But Mr van der Kleij has made the mistakes, suffered the blows and bears the scars of a serial entrepreneur who made it in the end. It began when he tried, and failed in 1996, to buy flowers online for his wife Alison.

“Wouldn’t it be great if I could type my number into a box on the screen, and a computer somewhere makes two phone calls and connects me with the flower seller,” thought the ebullient Dutch national, brought up in South Africa, but who has lived in the UK since he was 15.

RealCall was set up and money raised, but too few were using the internet and even fewer would pay for automated phone calls, even delivering share and news alerts, never mind flowers.

Then in a lesson for his young charges, he deployed a classic business manoeuvre – the pivot. “You have one leg in your technology and swing your other leg round to do something you didn’t originally think of which hopefully makes money,” he explains.

The pivot produced Adeptra, automating credit card fraud alerts, which involved working with huge American companies, such as First Data and Fair Isaacs, now FICO.

The mistakes and remedies that would normally take years to work through are telescoped into a matter of months

More than $40 million in venture capital was raised and eventually in 2011 Adeptra was sold to FICO for $115 million. Before that the struggling company flirted with bankruptcy. By then his wife was owed endless bunches of flowers.

“I had to give back the house. It was quite a serious thing handing back the keys when my wife was pregnant with our second daughter,” he recalls.

Another lesson for the budding entrepreneurs of Level39: if you don’t get it right quickly enough, even when the business you founded is sold for $115 million, you don’t become a multi-millionaire because your stake has been so diluted.

The way forward for Mr van der Kleij included advising Prime Minister David Cameron’s team on a variety of entrepreneurial schemes, from attracting US technology entrepreneurs to the UK, to setting up the Tech City Investment Organisation.

He knew exactly what was needed – greater access to investment and talent, plus a positive economic and policy environment.

“I looked in their eyes and they really did care about the tech sector. We are lucky in this country that we do have a government that really does care and understands why the wider tech sector is so important,” he insists.

Lobbying produced fast-track visas for high-calibre entrepreneurs from abroad and tax breaks for those investing in young tech companies.

Level39, opened by London Mayor Boris Johnson, and which celebrates its first anniversary next month was a result of another entrepreneurial moment.

Mr van der Kleij met Sir George Iacobescu, the Canary Wharf chairman, at an Olympic Legacy Business Dinner. Sir George wanted to know about the Shoreditch Silicon Roundabout and whether it could be replicated in Canary Wharf where there were already 7,000 tech workers.

The answer was do not “copy and paste” Shoreditch. Instead play to your natural credentials by focusing on three thematic areas – fintech, retailtech and future cities tech.

The 39th floor was the highest floor ready for occupation and Level39 was born.

Young entrepreneurs can have “drop-in” membership for £600 a year, which offers two days a week on the floor, and free wi-fi, coffee and contacts. A hotdesk costs £300 a month. For a fixed desk it’s £500 a month.

When the companies expand they can move up to Level42 where you can get a desk in your own office and space for ten for around £600 a month.

“The most exciting thing is when you see companies coming here with two or three people, and you work with them, and they start hitting it out of the park and they say I am going to need space on Level42. We should get a bell and ring it or something,” says Mr van der Kleij.

Apart from mentoring, chief information officers from major companies controlling multi-billion budgets on lower floors, can pop up for a chat over lunch and regulators from the Financial Conduct Authority have come to hold seminars.

As a result the accelerator effect is considerable. The mistakes and remedies that would normally take years to work through are telescoped into a matter of months.

Fintech companies on Level39 include Digital Shadows, which protects banks from cyber attack, Growth Intelligence, specialising in real-time data on company performance, and Crowdrooster, a crowdfunding specialist.

Mr van der Kleij has no doubt about the importance of the fintech sector to the future of the UK economy as some of the world’s best computer scientists go to work in the powerful British financial services sector. They are creating start-ups like Monitise, the mobile banking group.

“Monitise with a £2-billion market cap is one hell of a start-up. That’s why I say London has the potential to compete globally. Could we rival Silicon Valley? I would say, in fintech, yes we certainly could,” the Level39 chief maintains.

He and other influential people in financial technology have now been asked by 10 Downing Street to set up an organisation for UK fintech companies to represent their voice to government.

Although Mr van der Kleij is an employee of Canary Wharf, he can stay current by setting up his own new companies, such as Pivotal Innovations, which runs innovations competitions and accelerator programmes for large corporates. A number of other ideas are close to the launching pad.

Even when switching off at the weekend, it’s not a complete shutdown. He flies iPad-controlled Parrot AR quadcopter drones and is fascinated by the complex software involved.

“Of course, it made me think when I recently saw the announcement by Amazon on drone automated delivery. When you think about all that white-van traffic in London… watch this space,” he says with a chuckle in his voice.