GoCardless becomes latest UK fintech unicorn with $312m raise

GoCardless unicorn funding Image credit: GoCardless

Payments firm GoCardless has raised $312m (£230m), giving it a valuation of $2.1bn (£1.55bn) and making it the latest UK fintech to achieve unicorn status.

The Series G round was led by Permira, which has previously backed buy now pay later firm Klarna. BlackRock Private Equity Partners, a new investor, also provided capital.

GoCardless, which manages direct debit collection for merchants such as DocuSign and Plum via an API, said it will use the extra capital to fund product and geographical expansion plans.

The announcement confirms a Business Insider story in December that GoCardless was set to hit unicorn status – privately held firms valued at $1bn or more – following a Series G raise.

GoCardless said it has closed $192m of the $312m and expects the round to fully close later this year. It will bring the total funding raised by the London-headquartered company to nearly $530m.

“The rise of open banking presents a once-in-a-generation shift, one that will change the way payments happen all over the world,” said Hiroki Takeuchi, co-founder and CEO of GoCardless.

“I am delighted to have partners like Permira and BlackRock Private Equity Partners on board, with their global footprint and strong expertise in tech, to support us in building a direct bank payment network that lets payments flow freely, without cards, expiration dates or extra costs.”

The London-headquartered company says it processes more than $25bn in transactions each year for over 70,000 businesses.

It most recently raised $95m in December 2020. Prior to that, it scooped up $22.5m in 2017 and $13m in 2016.

The GoCardless funding round follows a bumper 2021 for UK fintech investment. According to data compiled by Innovate Finance, a UK fintech industry body, investment in UK fintechs totalled £8.56bn last year.

It also adds to the 29 unicorns created in the UK last year.

The investment will see GoCardless gain Michael Rouse, former chief commercial officer at Klarna, on its board of directors.

Meanwhile, Koen Köppen, chief technology officer at Klarna, will join GoCardless as an independent director.

The appointments are the latest sign of a growing partnership between GoCardless and Klarna, with the Swedish fintech recently selecting GoCardless to provide debit payments for its 21 million US customers.

Alberto Riva, principal at Permira, said: “We believe GoCardless is uniquely positioned to become a global champion in account-to-account payments through leveraging open banking.”