London-based UK FinTech Growth Partners announced on Tuesday, August 15, that it will launch the FinTech Growth Fund to support fintech startups as they scale.
The fund will finance growth-stage startups between Series B and pre-IPO stages.
UK FinTech Growth Partners will begin capital distribution in the fourth quarter of this year. The firm says that it has identified a solid pipeline of opportunities.
On average, the fund seeks to undertake four to eight investment projects annually. Each ticket will range between £10M (€11.67M) and £100M (€116.70M). The initiative plans to make minority investments in up-and-coming startups. Investments come in the form of equity and equity-linked securities of the portfolio companies.
Besides the funding, the FinTech Growth Fund will also offer strategic support to capital recipients to help them grow into world-class organisations. It will provide insights into the fintech sector and the broader financial services ecosystem via its partners, including Angel Issa, a former Global Head of Corporate Development & Strategic Investments at Nomura.
UK FinTech Growth Partners has also established a non-executive advisory board for the initiative led by former Chancellor of the Exchequer Lord Philip Hammond to bolster its growth trajectory.
“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,” says Lord Hammond.
“I championed our vibrant fintech sector throughout my term as Chancellor and have long believed its success is vital to maintaining the UK’s role as a global financial services centre through the early adoption of new technologies, products and services,” adds the former chancellor.
The fund is currently expanding its workforce with plans to station officers across the UK to maximise its impact.
Bridging investment gap
The UK fintech sector has steadily grown in recent years. However, UK FinTech Growth Partners co-founder and managing partner Phil Vidler points out that a capital gap remains a big factor that prevents growth-stage startups from spreading their wings further.
“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,” says Vidler.
“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. In doing so, we believe we can ensure the UK remains a global leader in FinTech,” he adds.
The funding initiative is inspired by the “Kalifa Review,” an independent report published by Network International chair of the board Sir Ron Kalifa. The report outlines a five-point plan that will help the UK keep its status as a leader in the financial services industry, including ensuring the success of its fintech sector. The review suggests the establishment of a £1B (€1.17B) growth fund to sustain the nascent industry.
Currently, the lack of post-seed financing in UK fintech has led to a loss of IPs. Furthermore, the UK is lagging behind its biggest rival, the US, which sees its fintech sector flourishing in recent years.
Data shows that the UK remains an attractive fintech market in Europe. Last year, it attracted $12.50B (€11.45B) of inward investment, larger than any other European market.
Read the orginal article: https://siliconcanals.com/news/startups/fintech/uk-fintech-growth-partners-announce-new-fund/