London’s financial technology (fintech) start-ups are being held back by a lack of investors, the Deputy Mayor of London said today.

Speaking at the launch of Startupbootcamp FinTech, a new fintech accelerator in London, Kit Malthouse, said: “Our basic problem is access to venture capital. On the West coast [of the US] they [venture capitalists] compete for opportunities, rather than the other way round.”

Malthouse's comments were made after Clare Flynn-Levy, CEO of London-based fintech start-up, Essentia Analytics, said she and many other fintech companies are in a "post-seed, pre series A, funding gap", despite having a strong customer base and plentiful demand. 

"I feel like it’s one area where I’m bumping up against a brick wall over and over," said Flynn-Levy, who is looking to raise £1 million for her company. “You don’t want the odd £20,000, what you really want is at least a couple of hundred grand from each investor. There simply aren’t that many people out there who understand fintech and are willing to write cheques that big."

At the same time, Flynn-Levy, whose software aims to help fund managers make better decisions by capturing data about their own behaviour, said there are a number of larger VCs in London who would only be willing to invest in her company once it reached a certain size. 

"There is a VC population that is waiting until we get bigger and until we can show more traction, which is totally understandable," she said. "But at the same time we can’t show traction until we can hire resources, which costs money."

While many fintech companies in the UK appear to be struggling with obtaining funding, a recent report from Accenture Research suggests that the landscape is improving. 

Although the US remains the dominant market for fintech investment, the fastest growing region is now the UK and Ireland (UKI).

The report found the rates of investment in fintech in the UK and Ireland grew twice as fast as similar companies in the Silicon Valley. 

Malthouse said that more private investors need to show an interest in fintech companies in order to help those in the so called "funding gap". 

The fact that 60 percent of sub £2 million investments in tech companies are made by government needs to change, he added.

“We need to get back to the Victorian age where people and individuals did invest, and not just rich individuals, but individuals all the way down the scale," he said. 

He also said that tax break initiatives, such as the Enterprise Investment Scheme and the Seed Enterprise Investment Scheme, need to be made less complex in order to make it easier for individuals and businesses to make investments.