Barclays and Santander have taken stakes in British fintech group MarketInvoice in a sign of established lenders’ growing willingness to team up with technology-driven challengers.
The companies declined to comment on valuation, but documents filed with Companies House suggest the deal valued MarketInvoice at about £85m.
Big banks and fintechs have become increasingly keen to work together despite sometimes competing for the same customers.
Smaller firms such as MarketInvoice benefit from access to banks’ long-established customer bases, while banks can exploit smaller players’ specialist knowledge or ability to develop products more quickly.
Anil Stocker, MarketInvoice chief executive, said the investment would help the British lender grow its presence in the UK and expand overseas in partnership with Santander later this year.
Barclays announced its intention to purchase a “significant” minority stake in the company last August, but upped the size of its investment after a successful trial offering MarketInvoice products to its existing business customers, Mr Stocker said.
The fintech specialises in invoice finance, in which small and medium-sized businesses smooth out cash flow by borrowing against money they are owed by customers. It also offers unsecured loans, and has extended a total of more than £2bn to businesses since its foundation in 2011.
MarketInvoice initially funded many of its loans through peer-to-peer investments from retail investors, but now relies on institutions such as banks and family offices for around three-quarters of its funds.
Mr Stocker said: “Banks have been soul searching over the past year or so and thinking ‘how do we modernise — do we build everything ourselves, do we partner with others’?
“I think from the top there’s a sense that ‘we can’t do everything’ . . . Not every bank will make the same decision but it seems like the general trend is one of embracing collaboration, which is great.”
Ian Rand, chief executive of business banking at Barclays, said: “Collaborating with fintech companies like MarketInvoice is an integral part of Barclays’ strategy for accelerating growth.
“This investment demonstrates our commitment to the partnership we announced last summer, which offers hundreds of thousands of our SME clients access to even more innovative forms of finance, boosting cash flow and competition in the market.”
Last year Barclays set up a venture capital-style unit with the aim of adding billions of pounds to its annual revenues, while Santander’s InnoVentures unit has invested in more than 20 start-ups since it was launched in 2014.
Alongside the fundraising, MarketInvoice also secured a £30m debt facility from Viola Credit — an arm of Israeli private equity group Viola — to fund loan growth.
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