Fintech Investments

In UK, FinTech Fundraising Gathers Steam

fintech-uk-funding-investment

Brexit may dominate the headlines when it comes to the United Kingdom, but FinTech funding proceeds apace, and financial backers show a continued sanguine attitude about the space.

In news that came from across the Pond, two U.K.-based FinTechs said they have garnered more than 200 million pounds.

As reported, iwoca, a small business lender focused on online lending (with loans up to 250,000 pounds) said it raised 150 million pounds in debt and equity financing (where the division was 20 million pounds of equity financing and with the remainder as debt), as per reports Monday (Feb. 18th).  And in another announcement separate from iwoca’s, GoCardless, a direct debit technology company, said it grabbed 75 million pounds.

As Yahoo Finance U.K. noted, Augmentum Capital led the iwoca fundraising, where participation also came from NIBC, a Dutch Bank and a number of other investors. Tim Levene, the CEO of Augmentum Capital, told Yahoo Finance that the U.K. “has clearly established itself as the FinTech hub of Europe…[and] will remain the global center of FinTech” despite Brexit.  “The ongoing uncertainty is clearly not helpful as it inevitably creates investment inertia, which could see a short-term impact on the level of funding entering the sector,” he added. “However, the medium and long-term prognosis for U.K. FinTech remains strong and will be able to overcome any short term pain that Brexit brings.”

GoCardless’ investors included Google Ventures, Salesforce Ventures and Adams Street Partners, with a number of additional (and returning investors) including Accel, Passion Capital and Balderton Capital.  The funding will be used to expand into North America and Asia.

Thus far in 2019, data from Innovate Finance, the U.K. FinTech trade body, said that as much as $3.3 billion USD worth of investments have come into the FinTech sector, up 18 percent from last year.  Other estimates, such as from Accenture, have said that the U.K. has garnered more than 50 percent of FinTech investment through the past year.

Turning attention to other regions, in Asia, Jakarta-based Oriente Holding, working with Sinar Mas, an Indonesian conglomerate, has launched Finmas to offer loans to Indonesia’s unbanked population.  The firms said that Finmas uses mobile and data science technology to offer loans to customers even if they have no prior credit history.  OJK has said that as much as 66 percent of Indonesia’s 260 million citizens are unbanked or have no access to banking services.

Jakarta Globe has said lending to that population could be worth more than $50 billion through 2020.  Oriente, said the site, will spend as much as $105 million to scale across southeast Asia.  The company also has a lending platform in the Philippines and is looking to enter Vietnam.

FinTech Efforts in Estonia

Separately and beyond individual company news, the European Bank for Reconstruction and Development (EBRD) has debuted what is being billed as its first technical assistance FinTech project in Estonia. The project is being launched with Estonia’s country’s Ministry of Finance and Financial Services Authority.  The initiative is examining a regulatory sandbox which will let companies test their products with real customers — and where recommended reforms will then be submitted to Estonia’s government with the goal of fostering new technologies for financial markets.

 

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