UK FinTech Growth Partners LLP (“UK FinTech Growth Partners”) is pleased to announce that it will launch the FinTech Growth Fund, the first investment fund of its kind focussed on supporting growth stage FinTechs as they scale.
With backing for the initiative already secured from industry leaders Barclays, NatWest, Mastercard, London Stock Exchange Group and Peel Hunt, the FinTech Growth Fund will invest in UK FinTechs, predominantly between Series B and pre-IPO, to enable them to scale into world-class global organisations. The first deployment 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. 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 to help them achieve their corporate ambitions, 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 combines decades of experience in venture capital, FinTech and government. The partners of the fund include:
- 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.
To support the growth of the fund, UK FinTech Growth Partners has assembled a world leading non- executive advisory board which brings with it a wealth of sector expertise. The advisory board will be chaired by former Chancellor of the Exchequer, Lord Philip Hammond, and will also feature notable UK financial services and FinTech figures, including:
- Clare Bousfield – MD Retail and Savings for M&G plc;
- Sir Charles Bowman – Former Senior Partner of PwC and former Lord Mayor of London;
- Dame Jayne-Anne Gadhia – Chair of Moneyfarm, Founder of Snoop and Ex CEO of Virgin Money;
- Lord Gerry Grimstone – former Minister for Investment jointly at the Department for International Trade and the Department for Business, Energy & Industrial Strategy, former Chair of Barclays bank and former Chair of Standard Life;
- Alastair Lukies CBE – Founder of Pollinate International and Founding Partner of Motive Partners;
- Baroness Helena Morrissey – Chair of the Board of Directors Fidelis and Chair of Altum Group, former Chair at FTSE250 firm AJ Bell and former CEO of Newton Investment Management;
- Romi Savova – Chief Executive Officer (CEO) of PensionBee, and;
- Philip Smith – founder and former CEO of Embark Group.
Phil Vidler, Managing Partner, commented: “The UK has always been at the forefront of innovation in FinTech but there is a very clear and well evidenced growth funding gap. 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. In doing so, we believe we can ensure the UK remains a global leader in FinTech. “
The idea for the fund grew out of the landmark 2021 Kalifa Review which outlined a five-point plan to help the UK retain its status as a global leader in financial services through securing the success of UK FinTech. It identified an annual funding gap for growth stage FinTech estimated at £2bn, of which a £1bn growth fund was recommended to act as the catalyst in developing a world leading ecosystem. Currently these FinTechs struggle to find domestic capital to help them scale, resulting in a loss of IP and a growing divergence between the UK and the US at post seed funding levels.
The fund is welcomed by Sir Ron Kalifa, author of the Kalifa Review: “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.”
Outside its core remit, UK FinTech Growth Partners will commit to providing wider holistic support for the UK FinTech ecosystem. This extensive commitment will be realised through the “Beyond Investing” programme which will consist of initiatives focused on national connectivity, support for early-stage founders, and talent, diversity, equity, and inclusion.
Lord Dominic Johnson CBE, Minister of State, Department for Business and Trade, also welcomed the fund, commenting: “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. 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.”
Lord Philip Hammond, Chair – FinTech Growth Fund Advisory Board, and Former Chancellor of the Exchequer, commented: “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.
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.
The FinTech Growth Fund directly addresses the investment gap facing growth-stage fintech businesses in the UK which was identified in the Kalifa Review. As such, I am confident it will help to sustain and create jobs and growth across the UK in this cutting-edge technology sector.”
C.S. Venkatakrishnan, Group Chief Executive Barclays, comments: “Barclays is pleased to be supporting the FinTech Growth Fund. It will see private capital turbo charge an industry, leading to economic growth through the deployment of capital. We will support portfolio companies through strategic guidance and connectivity to the wider FinTech ecosystem. This is an exciting collaboration which will accelerate the transformation of financial services, not just for our customers and clients but for society at large.”
Kelly Devine, President, Mastercard UK&I, comments: “FinTechs have the potential to be a growth powerhouse for the UK, but our partners tell us time and again that they need better access to funding, networks and international markets. We partner with hundreds of FinTechs in the UK and beyond, but we want to do more to make sure the industry remains world leading. Through this fund, we’ll provide crucial sources of capital, as well as access to new markets, customers, and opportunities through our global network.”
Paul Thwaite, Chief Executive, NatWest Group, comments: “The UK’s fintech sector is the envy of Europe, housing more than 3,000 companies and a financial ecosystem second only to the US. However, the UK has suffered from a lack of domestic growth capital to take this sector to the next level. That’s why NatWest is delighted to back the Fintech Growth Fund in support of its ambition to grow into Europe’s largest fintech fund, focused on bridging the UK’s growth capital gap. We commit to continuing to provide support and financing to help break down barriers to growth and enterprise for high growth, high potential UK companies.”
David Schwimmer, CEO London Stock Exchange Group, comments: “The launch of a UK FinTech Growth Fund is a unique opportunity to ensure that innovative FinTech firms can unlock the capital they need to scale and grow into globally consequential companies.
Our investment in the FinTech Growth Fund should enable sustainable growth, a core LSEG purpose. We are delighted to help address the investment gap, one of the key recommendations of the Kalifa Review.”
Steven Fine, CEO Peel Hunt , comments: “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 its 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.”
Nicholas Lyons, Lord Mayor of London, also welcome the fund, commenting: “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.”
Charlotte Crosswell OBE, Chair, Centre for Finance, Innovation and Technology (CFIT), comments: “When we launched CFIT in February this year, we knew how important it was to make the recommendations of the Kalifa Review a reality. This marked a significant moment both for FinTech and the wider UK economy, helping power high skilled job creation and increased growth in some of our most promising companies.
I am delighted to welcome the FinTech Growth Fund which marks another milestone in instituting the recommendations of the Kalifa Review. Not only can it provide deeper pools of domestic capital, so vital to domestic growth-stage FinTechs, but it shares a common purpose with CFIT, to maximise impact across all the regions of the UK, to scale our most exciting and innovative companies, and to focus on increasing access to jobs in financial innovation.”
Janine Hirt, CEO, Innovate Finance comments: “Innovate Finance is delighted to support the launch of the FinTech Growth Fund. A core recommendation of the Kalifa Review, this Fund will play a critical role in helping UK FinTech firms scale and will further cement the UK as the best place in the world to build and grow a FinTech business.”
Omar Ali, EMEIA Financial Services Regional Managing Partner at EY, comments: “It is great to see yet another key milestone announcement that brings the recommendations of the Kalifa Review to life. We have seen the launch of the new FinTech skills visa to attract talent to the industry, the formation of the Centre for Finance, Innovation and Technology (CFIT) and now a confirmed intention to launch a FinTech Growth fund. EY played a crucial role in the development of the Kalifa Review, and is hugely supportive of the recommendations, which have the potential to make a tangible difference to UK FinTech, the financial services industry more broadly, and the wider UK economy.”
