By Daniel Lanyon on Tuesday 14 September 2021
The British Business Bank has published a list of the 158 companies in which the Future Fund holds an equity stake. A large number are fintech firms.
The UK taxpayer, through the government-backed Future Fund, now owns stakes in at least 25 fintech startups, according to AltFi research.
Set up and launched at the height of the pandemic in May 2020, the Future Fund has issued 1,190 companies with convertible loan agreements worth £1.14bn via money from the UK's Treasury.
Central to the rationale for the Future Fund was to stop otherwise healthy startups from running out of cash if VC investment taps ran dry.The conversion of the loans into equity happens when the companies have successfully raised further private sector capital through an equity funding round, at a discount to the price per share agreed between companies and investors in the funding round.
Loans were typically between £125,000 and £5m.
In total 158 convertible loans have now converted into equity shares, and the British Business Bank, which oversees the fund has released the names of these firms for the first time.
Nearly 16 per cent of these firms (25) are fintech firms. These include well-known names such as Monese, a digital banking challenger, savings and investment app Chip, money management fintech Snoop.
Another interesting name is neo bank Kroo, which recently closed its £17.7m Series A fundraise as well as JaJa Finance, a credit card challenger that has seen a number of delays to fully launching, and digital mortgage lender Molo which raised 266m in debt and equity funding as part of a Series A round in October 2020.
Hot fintech trends including open banking and buy now, pay later are also covered with investments into Volt and Fly Now Pay Later.
Among the other firms raising money are a mixture of both B2B and consumer-facing fintechs including Ai Exchange, Cognitive Credit, Counting, Credit Laser Holdings, DueDil, Elite Crowdfunding, Fairscore, Funderbeam. Invest and Fund, Passfort, Penfold Technology, Project Imagine, Proportunity, Shieldpay, Smart Pension, Tickr, and Yordex.
Of the total 25 fintech firms, more than nine out 10 are London based with just two Invest and Fund and Sheildpay based in the UK's regions. The former heralding from south east England and the latter north west.
Ken Cooper, Managing Director, Venture Solutions, British Business Bank said: “The Future Fund was created to increase the flow of capital to innovative companies at the height of the pandemic, while ensuring long-term value for the UK taxpayer."
"As a shareholder in so many promising businesses, the Future Fund is well-positioned to support, and benefit from their continued growth.”
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