Four U.K. FinTechs have been named as the next winners of funds from the Royal Bank of Scotland (RBS) to boost financial services and increase competition in the U.K. small business banking space.
SmallBusiness.co.uk reported on Wednesday (Aug. 14) that Atom Bank, Currencycloud, Modulr and Iwoca have secured a portion of the £775m allocated from RBS as a government mandate to support competition in the market. Together, the companies have been awarded £40 million.
Iwoca raised £10 million, with plans to make half of it available to small businesses by 2023. The alternative lender also announced plans to invest £13 million to launch an office outside of London to expand its small business financing operations, aiming to increase its customer base to 150,000.
"Winning the grant enables us to accelerate our mission to make finance available to one million SMEs," said the firm's Co-founder and CEO Christoph Rieche in a statement.
Atom Bank similarly secured £10 million from the grant, announcing plans to hit a £3 billion small business financing milestone by 2024. The funds will also enable the challenger bank to develop a digital small business toolkit, create jobs and invest £15 million into its own technologies and services.
B2B cross-border payments company Currencycloud said it will use its £10 million in RBS funds "to advance our global transaction platform to better serve the needs of SME customers, as part of our mission to open up high-quality international payments beyond the realm of big banks," the firm's CEO Mike Laven said in a statement.
Finally, Modulr said it will match the £10 million in RBS funds with £10 million of its own cash to boost expansion.
Previous winners of RBS funds have included Metro Bank, Starling Bank, ClearBank, Nationwide Building Society, Investec Bank and The Co-operative Bank.
The awarding process has not been without controversy, however, particularly with concerns raised over CYBG's failure to secure funds twice.