A group of senior financial industry figures are leading plans to create a new £1bn FinTech fund to speed up the growth of promising UK scale-ups, according to Finextra.
Key names who are leading the plans are former UK Chancellor Philip Hammond as well as Phil Vidler of the FinTech Alliance.
Hammond already acts as a financial advisor to Copper – a UK crypto startup as well as challenger OakNorth Bank.
Sources in the City told Sky News that the fund would seek to raise capital from institutional investors and be independent of the government.
Finextra said that companies including Barclays, LSEG and Mastercard are said to have been approached about providing small amounts of seed funding to get the new vehicle operational.
The fund would aim to plug a gap in funding identified by Ron Kalifa as part of his government-backed review into UK FinTech.
The report said, “With a £2bn fintech growth capital funding gap in the UK, many entrepreneurs prefer to sell rather than continue to build their promising company. There is £6trn in UK private pension schemes alone, a small portion of which could be diverted to high growth technology opportunities like fintech.”
The aim, Finextra mentioned, would be to provide funding to businesses as they progress beyond the Series B stage of capital raising, when they typically seek to raise tens of millions of dollars to ‘scale up’ their operations.
Latin American technology startup Clara, which offerings corporate expense management solutions, recently secured up to $150m from Goldman Sachs.
Clara said it is shaping the future of how companies manage their finances, while helping their customers to be more successful. Clara’s products include business credit cards, an expense management system, as well as a SPEI payment and transfer platform; are already being used by some of the fastest growing startups and companies in the region.
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