The fintechs that went out of business in 2023
An exceptionally challenging funding environment caught several fintechs off-guard this year
If you thought 2022 was tough, 2023 has turned out to be one of the most challenging years for fintechs in recent memory.
So who went out of business in 2023?
Not a great start to the year.
After losing its £12.09m Digital Growth Grant from the UK government which was instead awarded to Barclays bank, Tech Nation announced in January that it would close in March given it was “not viable” to continue without funding.
The story had a happy twist ending, as Founders Forum acquired the assets of Tech Nation and has since rebooted the group to continue its good work.
Despite its backing from institutional investors including Channel 4 Ventures and the British Business Bank, sustainable investing app Clim8 found itself unable to raise funding in March.
“The venture capital environment has completely changed in the last year and it’s extremely difficult for startups to raise new funding,” CEO Duncan Grierson told AltFi.
Customers were given 60 days to either withdraw their funds to transfer their ESG portfolios to Wealthify, with Clim8 ultimately unsuccessful in trying to find a buyer for the company.
It was mid-summer when the bulk of shutdowns occurred, and open banking lender Koyo Loans was among the first.
Ironically the lender was flush with £100m worth of debt funding raised in late 2022, but just nine months later found itself unable to raise enough equity funding to continue growing the business.
Koyo was founded in 2018 and launched in 2020 with its USP being that it would purely use bank transaction data, powered by open banking, to assess near-prime borrowers and underwrite risk rather than using credit agency scores.
Ultimately without funding Koyo handed its loan book over to credit administrator Capquest and closed down its business.
Rental lender Fronted had a bumpy ride from the start, having to contend with the shutdown of the UK property market in 2020 which cost the business valuable time.
When things got back up and running Fronted raised more equity in 2021 and things seemed to be heading in the right direction, but rising interest rates in 2023 sent Fronted’s cost of capital soaring making the business ultimately unsustainable.
In August CEO and co-founder Jamie Campbell wrote: “After an incredible journey together, we’re saying farewell to Fronted. Thank you for being a part of our journey, your support made it all possible.”
Corporate bond trading platform LedgerEdge also fell into administration this August with the company’s founder David Rutter blaming an “extremely challenging funding environment”.
LedgerEdge had planned to use distributed ledger technology to give bond traders better connectivity and liquidity and even got the FCA’s green light to launch before its time ran out.
Credit card management app Cardeo offered its customers the ability to see and manage the balances of various credit cards all from a single app.
Unfortunately, after three years of building the business, its team announced in November that its app would be shut down as the team “have not been able to secure the investment required to continue as a business”.
Someone missing from the list? Let us know.