By John Reynolds on Wednesday 26 January 2022
The deal will see M&G lead the investment round, acquire a minority stake in Moneyfarm, and use Moneyfarm's digital expertise to launch its own digital investment service.
Moneyfarm has agreed a fresh funding round of £44.1m, led by a leading investment house that has acquired a minority stake in Moneyfarm, as part of a deal to launch its own digital investment service for retail customers.
Investment house M&G, which has over £370bn of assets under management and administration, will take a minority stake in Moneyfarm as part of its funding agreement.
The exact stake taken by M&G, a first-time investor in Moneyfarm, has not been disclosed.
Poste Italiane, which is also a Moneyfarm shareholder, is also investing in the round, which will be completed by the end of the first quarter of 2022.
To date, Moneyfarm, which was founded in 2012, has raised a total of £139m.
Moneyfarm, which has over 80,000 clients and over £2.2bn assets under management, said the funds will be used in three areas.
These will be to bolster its product offering; supporting future development and building partnership models by offering its digital wealth management as a module for other financial institutions to integrate.
As part of the agreement between Moneyfarm and M&G, M&G will launch a UK digital investment platform under the M&G Wealth brand, its wealth management arm, for “the next generation of savers”.
It will utilise Moneyfarm’s platform-as-a-service, which has also already been used by financial outfits including Allianz and UniCredit.
It will offer a collection of multi-asset portfolios, backed by actively-managed and passive funds, utilising Moneyfarm's technology and digital prowess.
Explaining the rationale for the launch of its direct digital investment offering, M&G pointed to the rapid rise in direct investing in recent years, with demand for digital investment services now accounting for 19 per cent of all UK direct customers, it said.
Moneyfarm and M&G will also explore a range of other opportunities to partner in other European wealth markets.
Giovanni Daprà, co-founder and CEO at Moneyfarm, said: “Our distinctive partnerships with established players in the industry such as Poste Italiane, Allianz and UniCredit demonstrate the real value that can be created by combining the agility and innovation of a direct, digital fintech business with the scale and experience of an established provider.
“Having launched in the UK five years ago, we are very excited to be partnering with a proven name in M&G on the next stage of our journey and welcome them as an investor.”
David Montgomery, managing director at M&G Wealth added: "The first milestone will be to start working together in the UK to build a simple and effective digital offering for the benefit of a new generation of savers."
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