A new UK-based investment vehicle worth up to £1bn has been launched to fund growth-stage fintech companies.
The Fintech Growth Fund – backed by major financial institutions including Mastercard, Barclays and the London Stock Exchange Group – will target promising fintechs with investments between £10m and £100m. The fund will invest in firms from Series C stage and above.
Portfolio companies will receive strategic support in addition to capital. This includes access to a deep network of fintech and investment experts.
“The UK has always been at the forefront of innovation in FinTech but there is a very clear and well-evidenced funding gap,” said Phil Vidler, CEO of FinTech Alliance and managing partner of the fund.
Vidler said the 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.”
The fund was launched as a response to advice from the landmark Kalifa Review of the UK fintech sector. The review identified a funding gap for UK firms, suggesting a £1bn fund as a possible solution.
Sir Ron Kalifa, former Worldpay vice chairman and Kalifa Review author, said: “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.”
Fintech is considered the UK’s strongest tech sub-sector. Companies such as Monzo, Starling and Revolut have grown to become household names. While fintech sector funding slumped by 37% in the first half of the year, it still stood at £2.3bn.