London's mayor is on a trade mission to Japan to bang the drum for the U.K. capital, but unlike previous trips to Asia, a big focus will be on striking partnerships to help financial technology start-ups expand into the world's third-largest economy.
Usually trade trips involve drumming up investment for infrastructure projects, but London's mayor Boris Johnson has taken the U.K.'s fintech envoy and a handful of start-ups to show off what the capital has to offer.
London is arguably the world's fintech hub, with venture capital investment in the city's sector surging from £24 million ($37.1 million) in the whole of 2010 to £312 million in the first six months of this year alone, according to London and Partners.
"Japan is a region we know there has been interest and big synergy with companies there. There are a number of our companies expanding into Asia and want to do work out there," the U.K.'s special envoy for fintech and partner at Passion Capital, told CNBC by phone.
Meanwhile, Japanese companies have invested £115 million in 19 U.K. tech start-ups in the last five years, according to Dealogic analysis.
Japanese companies have been heavily investing in start-ups abroad. E-commerce titan Rakuten recently took part in an $18 million investment round into London-based fintech firm Currency Cloud.
Johnson's trip is well-timed , coming as Japan looks towards the 2020 Olympics in Tokyo. Johnson will be hoping that organizers will be able to strike partnerships with London start-ups. Burbidge said that the trip will involve trying to seek out partners for companies to expand into Japan and also regulatory approval for certain start-ups. One such company is GoCardless, which provides a cheaper option for companies to handle direct debits. Fintech firms will need to adhere to Japanese regulation.
On Thursday, one of London's fintech darlings WorldRemit announced its expansion into Japan, where it has set up a local branch with a country director. It is now seeking to build a customer base in the country. WorldRemit lets people send money to other countries for a very low fee aiming to take a large slice of the $580 billion remittances market.
"Japan is one of the largest economies in the world and has a large and increasing foreign born population. Like many other markets, the remittances industry is dominated by banks and traditional players," Ismail Ahmed, CEO of WorldRemit told CNBC by phone.
"We see a huge opportunity. We see a country open to mobile payments. As one of the largest in terms of the reach, it was natural for us."