FinTech Growth Fund, backed by Mastercard, Barclays and the London Stock Exchange, aims to fund financial technology companies before listing
The UK’s ambition to be seen as an investment hub received a welcome boost this week with the creation of a £1 Billion Fintech Fund.
UK FinTech Growth Partners LLP announced on Wednesday the launch of the ‘FinTech Growth Fund’, which it said is the first investment fund of its kind focussed on supporting growth stage FinTechs as they scale.
Back by big name financial organisations and banks on this side of the pond, the FinTech Growth Fund hopes to compete with locations such as Silicon Valley, in attracting start-ups in the segment.
FinTech Growth Fund
The FinTech Growth Fund initiative has already secured from big names suchas Barclays, NatWest, Mastercard, London Stock Exchange Group and Peel Hunt.
The idea is that the FinTech Growth Fund will invest in UK FinTechs, predominantly between Series B and pre-IPO, to enable them to scale into global organisations.
The first tranche of capital into businesses is scheduled for Q4 2023 with a strong pipeline of opportunities already identified.
The fund will look to undertake, on average, four to eight investments per year, with investments between £10 million and £100 million, it seems. The fund will make minority investments and all investments will be for equity and equity-linked securities.
Alongside the investment capital, the FinTech Growth Fund will provide strategic support to its portfolio companies, giving them access to an ecosystem of deep, relevant experience across FinTech, venture capital, and the wider financial services ecosystem.
The UK FinTech Growth Partners executive team includes:
- Angel Issa – former Global Head of Corporate Development & Strategic Investments at Nomura, having previously held similar roles at BNP Paribas and Morgan Stanley;
- Joe Parkin – former Managing Director – Head of Banks, Digital Channels and UK Inorganic at BlackRock;
- Kaushalya Somasundaram – Former Executive Director and UK Head of Payments, Partnerships & Industry Relations at Square; Former Managing Director and Global Head of FinTech Partnerships & Strategic Innovation Investments Director at HSBC, and;
- Phil Vidler – CEO of FinTech Alliance, formerly Group Strategy Director at Pollinate and Head of Global Markets for HM Treasury
The fund is currently recruiting for a number of roles, including regional positions as part of its commitment to supporting businesses throughout the UK.
“The UK has always been at the forefront of innovation in FinTech but there is a very clear and well evidenced growth funding gap,” noted Phil Vidler, managing partner.
“The FinTech Growth Fund will address the lack of available growth capital by providing a first of its kind domestic, growth-stage, FinTech focused venture capital fund backed by strategic investors.”
“Our aim is to not only provide the capital needed for founders to scale their businesses, but to also engage with stakeholders across the nation to support the wider ecosystem,” said Vidler. “In doing so, we believe we can ensure the UK remains a global leader in FinTech.”
The venture was created in response to a 2021 government-commissioned review helmed by former Worldpay Vice Chairman Ron Kalifa and examined whether the UK’s listings environment is unattractive for tech firms.
It comes some industry criticisms that the UK now hampers fintech entrepreneurs and forces them to consider listings overseas, following the UK’s exit from the European Union, which some felt threatened the UK’s status as a global financial centre.
And the British government made clear its position on the new fund.
Lord Dominic Johnson CBE, Minister of State, Department for Business and Trade, welcomed the fund.
“UK Fintech remains one of this country’s crown jewels, casting a shining light to global investors that attracted $12.5 billion of inward investment in 2022,” said Johnson. “Second only to the US and larger than the next 13 European markets combined, UK Fintech can still reach new heights with new UK-based growth funds. I welcome the launch of the Fintech Growth Fund and wish them well in their fundraising.”
“I am delighted to chair the Advisory Board of the Fintech Growth Fund, which is made up of eminent individuals with a wealth of experience and wisdom, all committed to the growth of the UK fintech sector,” added Lord Philip Hammond, Chair – FinTech Growth Fund Advisory Board, and Former Chancellor of the Exchequer.