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Investors deposit £175m in ClearBank for global expansion

ClearBank funding

British embedded banking platform ClearBank has raised £175m in a funding round led by Apax Digital.

Further investment came from previous investors CFFI UK Ventures and PPF Financial Holdings BV.

London-based ClearBank will use the equity funding for international growth, first in Europe then in North America and Asia Pacific.

ClearBank will introduce direct API-based access to interbank payment schemes such as SEPA, multi-currency accounts and more Foreign Exchange Market services.

The London-based fintech says it is the UK’s first new clearing bank in over 250 years. A clearing bank is able to exchange cheques and payments between customers of other banks.

Existing clearing banks in the UK include Lloyds TSB, the Royal Bank of Scotland, Bank of Scotland and Clydesdale Bank.

ClearBank provides its services using cloud technology and is the latest example of neobanks challenging the status quo of the UK’s banking industry.

While the likes of Monzo and Starling have disrupted current accounts and other banking services, ClearBank provides the underlying technology used by businesses and other fintechs to clear payments between customers of different banks.

In 2017, the Bank of England allowed non-banks to access central clearing systems.

ClearBank says it is the only embedded banking platform with direct access to all UK bank payment schemes.

“Combining a banking license with a modern, agile and scalable embedded banking infrastructure is hard. Doing it at scale, and while delivering exceptional customer satisfaction, is truly special,” said Niccolo Ferragamo, principal at Apax Digital.

Launched in 2017, the bank has FSCS deposit protection, 13 million accounts and over £3bn in balances at the Bank of England. ClearBank’s services are used by over 200 businesses including Coinbase, Tide, Chip and Oaknorth Bank.

“ClearBank is the first proven and fully regulated cloud-native clearing bank in the UK for over 250 years. Over the last five years we have demonstrated the success of our business model and through our work with leading financial service providers, helped to both unlock their potential and bring about positive and meaningful change for UK businesses and consumers,” said Charles McManus, CEO at ClearBank.

Its funding round follows a bumper year for UK fintech investment, with companies raising $11.6bn in capital.

In 2020, ClearBank received a £25m grant to help UK SMEs turn recovery from the coronavirus crisis into a growth opportunity.

ClearBank’s competitors include London-based Weavr and mmob.