The UK fintech sector is set for a £1bn injection from the banking industry in a bid to secure Britain’s place as an industry leader on the global stage.
The Fintech Growth Fund will receive backing from banking giants such as Barclays, NatWest, Mastercard, the London Stock Exchange Group and more, while also being advised by the UK investment bank Peel Hunt.
Steven Fine, CEO of Peel Hunt, commented: “The UK has a vibrant fintech sector and the Fintech Growth Fund will become a leading provider of growth capital and long-term partner to the ecosystem. The talent and experience across its investment team, strategic partners and advisory team is unrivalled and we are delighted to be working with them and investing ourselves.
“This fund will help UK entrepreneurs and founders scale their proven business models, as they seek to enter new markets and develop new technology products. The FinTech Growth Fund is going to catalyse investment in the UK fintech sector, in the area where it’s most needed, directly addressing the challenges raised in the Kalifa Review. We congratulate the Investment team for their efforts to date and look forward to working together.”
The Kalifa Review was drafted two years ago by Sir Ron Kalifa, who also welcomed the new Fintech Growth Fund, with the main goal of ensuring that the UK fintech scene embraces innovation across various sectors like crypto, Open Banking, and RegTech.
On the newly-formed growth fund, Sir Kalifa commented: “I am delighted to welcome the launch of the UK FinTech Growth Fund as a private sector initiative, backed by institutional capital, responding to one of the key recommendations of the Review.
“The Fund represents another key building block in the support ecosystem for growth stage UK fintech businesses. This is an important step forward towards ensuring the UK retains its leadership role in fintech.”
By securing funding for Series B and pre-IPO companies, the new initiative will help businesses grow into “world-class global organisations” capable of competing with the most advanced fintechs in the world.
The first capital funding is expected to be made in Q423, with plans being devised to release between four and eight investments per year, each providing businesses with between £10m and £100m.
In addition to financial support, companies will also gain access to a rich ecosystem of advisory sources and relevant use cases from across the fintech sector in order to fuel their corporate ambitions.
Nicholas Lyons, Lord Mayor of London, added: “I am delighted to welcome the launch of FinTech Growth Fund. A fintech-focused fund backed by some of the largest financial institutions in the UK is a fantastic opportunity to further cement both the City of London’s leading financial services ecosystem and drive growth in the sector across the UK.
“This fund also helps address a key challenge facing our fintech scale ups. They frequently rely on financing from international investors which leads to domestic fintechs listing in other countries, with IP and jobs leaving our shores.
“This is a critical part of the 21st century economy for the UK and in helping to fill this growth capital gap we’re retaining a significant competitive advantage.”
