Why Edinburgh Is Zumo’s Crypto Hub

Crypto Founders on Crypto Hubs is a series of interviews with entrepreneurs about where their startup is located and why. It is part of Crypto Hubs 2023. In this installment, CoinDesk senior editor Jeanhee Kim interviewed Nick Jones, co-founder and CEO of digital-assets infrastructure platform Zumo. Their conversation was transcribed and edited for clarity and length.

Describe Zumo in a few words.

Zumo is a digital-assets infrastructure platform that allows Web2 companies to get into Web3.

Where is your company established?

The company is based in Edinburgh, Scotland. Our team is all fairly heavily distributed in the U.K. and increasingly across Europe as well. We are fairly decentralized as a business, albeit still with a hub in Edinburgh.

My co-founder, Paul Roach, and I had both relocated to Edinburgh for different reasons and wanted to start a business here. And Edinburgh has a pretty rich heritage in computer science. Our university always comes in the top three schools in Europe by informatics and it also at the time was launching its first blockchain and AI accelerator and we got a place in that first cohort in 2018.

Nick Jones is co-founder and CEO of Zumo, which brings crypto to a mainstream audience through security, usability and a commitment to financial inclusion.

Edinburgh is probably No. 2 in the U.K. as a startup hub, it felt like there was a good mixture of talent. We’ve decided to stay probably because of the pandemic allowing us to not have to rely on the very good, but fairly small, talent pool in Scotland. There are only 5.5 million people in Scotland. It’s a secondary hub for financial services or banking for the U.K. outside of London, so people tend to get hoovered up, especially the good ones.

How long is your horizon to stay in Edinburgh?

There’s a few things happening at the moment. One is what we think is going to happen with the U.K., from a regulatory point of view. The desire to make it a real digital-assets hub is very, very encouraging. We’d like it to happen a bit faster because it’s been in the works for a while.

There’s been a huge number of disadvantages to Brexit, maybe one of the advantages can be some more freedom to operate within from a digital-assets point of view. We haven’t seen a lot of those benefits yet.

We have lots of people who work in London. I lived in London for a long time and there are incredibly close ties between Edinburgh and London as the two main financial hubs in the U.K. There’s like 10 flights a day or something. They’re super connected bases. As long as the U.K. continues on this path towards becoming a kind of a new Singapore or a new Switzerland or another Abu Dhabi, then we really want to stay and be part of that. We’ve been in and around the market for a fairly long time and where we see the real strength for London and the U.K. will be the combination of TradFi (traditional finance) and DeFi (decentralized finance), building on the heritage of London.

We’re targeting a secondary regulatory hub in Abu Dhabi this year. We believe that’s a great way of reaching into MENA and South Asia in the same way we’ve used London as a springboard for Europe.

CoinDesk rated Dubai higher as a crypto hub. How did you choose between Abu Dhabi and Dubai?

We’re focused on selling into TradFi, so we felt that Abu Dhabi was a really strong fit. The answer is you wouldn’t make a bad choice with either market. We just felt there was great alignment with the TradFi piece, certainly with the broader reach into South India as well as a fairly well-trodden path selling into the South Asian market. If we were planning on relaunching Zumo as a B2C consumer business, I might want to consider Dubai first.

Is Zumo entirely registered in Scotland?

No, but all U.K. Our FCA (Financial Conduct Authority) registered business is Scottish listed and our holding company is English listed. That’s a fairly common set up. Not least there’s a potential hedge against Scottish independence and if that did happen, what that might cause from a regulatory clarity point of view. We have a pretty boring – by crypto standards – regulatory setup. We don’t have anything funky going on with anything in the Cayman Islands or anything like that. We will obviously have to have an Abu Dhabi company when we launch there, as I’m sure we will have a European entity by the end of the year as well.

You’ve told us about the pros of Edinburgh. Are there any cons?

It’s a small town. I’d say the top-talent pool – this is the biggest challenge – and then the cost that goes with the talent pool.

Then there’s still the fear if you’ve been in the industry here [in the U.K.] for quite a while, as we have, that it doesn’t go quite as planned. There’s pretty encouraging noises coming from what’s likely to be the future Labour government. It doesn’t look like they want to rock the boat and turn back Brexit. So the risk there is becoming less and less.

Are you and your co-founder native to Scotland?

He’s from Aberdeen and he went to University of Edinburgh. But I was born in England. There’s more Scottish people in England then there are in Scotland or something like that. There’s a lot of movement, particularly that London-Edinburgh, financial services thing. It’s a really well-trodden route.