Belgium aiming to boost fintech investments

In an effort to bring the London and Brussels tech scenes closer, Brussels-based fintech platofrm Eggsplore launched B-Hive, a collaborative platform based in London dedicated to Belgian financial technology. In conjunction, Eggsplore signed a motion of agreement with UK fintech agency Innovate Finance to form a fintech-focused partnership.

News of the launch came as a delegation of Belgian digital finance specialists visited London to "build bridges between the fintech communities of London and Brussels", according to a B-Hive statement.

Eggsplore was co-founded in 2015 by CEO Wim de Waele and Jurgen Ingels, managing director of Belgium-based VC fund Smartfin Capital. Headquartered in Brussels, Eggsplore was established as a platform aiming to bring together major financial sector players in Belgium and members of the local fintech community. Using support from the Belgian government's federal investment fund and from additional partners, B-Hive is building upon that initiative.

"The starting point was that financial services have to reinvent themselves from a digital point of view," says Philippe Mauchard, managing partner at Eggsplore. "What we wanted to do is give those institutions [banks, insurers, corporates] the ability to collaborate better with the 'tech guys', and vice versa.

Brussels wants to build close ties with London – for us, it's both interesting to scout international technology companies that want to establish additional offices on the continent, and to use other locations as a destination for Belgian technology companies looking to expand abroad" – Philippe Mauchard, Eggsplore

"The platform is mutually beneficial: for startups, it gives access to a bigger pool of clients, a certain credibility and the means to deploy their technologies and ideas, while for institutions, it is an opportunity to get access to creative ideas to solve their problems."

B-Hive was launched with a dozen founding members and financial partners, including Belgium's largest banks – BNP Paribas Fortis, ING, KBC and Belfius – telecommunications provider Proximus, law firms Cresco and McKinsey, and financial services specialist Smart Ventures, as well as Swift, Mastercard, Axa and others.

Broadly speaking, the platform will focus on a range of tech market segments, including data analytics, cybersecurity, payments, lending and identity management. The initiative is not "strictly Belgian", says Mauchard, as the platform should appeal not only to local startups, institutionals and funders, but also to international players based, for instance, in the Netherlands, Germany and Israel.

"Since Brexit, many European countries, capitals or other cities have sprung up as places that aspire to be the most important fintech hub and want to compete with London," says Mauchard. "That's not our purpose: Brussels wants to build close ties with London – for us, it's both interesting to scout international technology companies that want to establish additional offices on the continent, and to use other locations as a destination for Belgian technology companies looking to expand abroad."

Bridging the funding gap
Although B-Hive is not a funding platform per se, Mauchard and his collaborators are hopeful the platform will encourage investments in the fintech sector. He says: "When we launched Eggsplore, we realised there was a high concentration of financial services and companies in Belgium, but at the same time, a clear lack of VC investments in this sector, and consequently a lack of stimulation for the creation of new startups in this particular field."

This, Mauchard explains, is what led his business partner Jurgen Ingels to launch Smartfin, a VC fund fully dedicated to the fintech sector, in 2014. Last year, Smartfin closed a first fund focusing on "B-and-plus" rounds above the €10m mark, gathering €75m in commitments. The firm is currently raising its second fund, Smartfin Ventures, which will mostly provide seed and A-rounds and targets €50m in commitments.

Says Ingels: "The challenge in Belgium is not that we don't have the engineers, the knowledge, or the appropriate market; it is really that we don't have the capital to help [tech startups] grow further.

"Once companies need €10-50m to evolve internationally, there aren't any Belgian funds that can help them do that, so they usually go and find that money abroad. That's also why, over the past five years, there has been a lot of UK and US funds investing here." Ingels names Index Ventures, Aquiline Capital Partners, General Atlantic or Prime Ventures as examples of these. "As for Belgian VCs," he says, "there aren't really any funds specifically focused on fintech – or not to the same extent as Smartfin anyway; there may be a few, but most of them are either partially or fully government-owned."

What the two partners are hoping for is that B-Hive will create a snowball effect, attracting more investments in the sector in Belgium and giving birth to an ecosystem bringing together startups, funds and financial institutions, with the final goal of making access to funding easier for Belgian tech companies looking to grow.

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