Fintech Growth Fund launches to fill £2bn funding gap
Acting on recommendations laid out in the Kalifa Review in 2021, the new fund is targeting Series B to pre-IPO fintechs
A new fund specifically targeted at growth-stage fintechs has landed.
The Fintech Growth Fund follows a recommendation from the Kalifa Review written by Sir Ron Kalifa in 2021 that outlined key ways to support the UK fintech sector.
Kalifa identified a £2bn fintech growth funding gap in the UK, and now the new UK growth-stage fintech-focused fund will be backed by Barclays, London Stock Exchange Group, Mastercard, NatWest and Peel Hunt to address the gap.
Kalifa recommendation highlighted the growth fund, which will focus on Series B to pre-IPO fintechs while also supporting the sector as a whole, as one of the “key recommendations” from the review
“The Fund represents another key building block in the support ecosystem for growth stage UK FinTech businesses,” Kalifa said.
“This is an important step forward towards ensuring the UK retains its leadership role in FinTech.”
The fund is looking to make four to eight investments per year on average, ranging from £10m to £100m, its first deployment of funding is due for the final quarter of this year, meaning the sector should start to feel the impact of it soon.
It will only make minority investments for equity and equity-linked securities.
In addition to the investment capital, the growth fund will give strategic support to its portfolio companies, providing access to a wide ecosystem of knowledge across fintech, venture capital and financial services.
“The UK has always been at the forefront of innovation in fintech but there is a very clear and well-evidenced growth funding gap,” Fintech Growth Fund co-founder and managing partner Phil Vidler said.
“The Fintech Growth 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.”
Alongside Vidler, who is also CEO of Fintech Alliance, industry experts Angel Issa, Joe Parkin and Kaushalya Somasundaram have joined as part of the executive team.
“Our aim is to not only provide the capital needed for founders to scale their businesses, but to also engage with stakeholders across the nation to support the wider ecosystem,” Vidler continued.
“In doing so, we believe we can ensure the UK remains a global leader in FinTech.”
The fund has also assembled a robust non-executive advisory which will be chaired by former Chancellor of the Exchequer Lord Philip Hammond.
Dame Jayne-Anne Gadhia, Snoop founder and former Virgin Money CEO will be part of the team alongside PensionBee CEO Romi Savova, former Lord Mayor of London Sir Charles Bowman and former Newton CEO Dame Helena Morrisey.