UK’s Largest Cash Deposit Fintech Raises £12M to Drive Growth
- Fund Management , Wealth Management
- 01.05.2020 05:03 pm
The venture capital arm of one of Canada's biggest pension funds is leading a £12m fundraising for a London-based fintech backed by MoneySuperMarket, the price comparison site.
Sky News understands that OMERS Ventures has become a shareholder in Flagstone, a cash deposit platform which transmits money between accounts from well-known providers such as HSBC and Nationwide in search of the highest interest rates.
The fundraising has been under discussion for some time, but its completion during the coronavirus crisis underlines its shareholders' confidence in the company's prospects, according to one backer.
Many technology companies have found their ability to attract new funding during the pandemic has evaporated, leading to concerns about the financial viability of thousands of UK start-ups.
Moneysupermarket and Kindred Capital, another existing investor, also participated in Flagstone's latest funding round.
Flagstone was set up in 2013, and has since transmitted more than £5bn in deposits on behalf of individuals, wealth managers, companies and charities.
Its platform provides access to hundreds of cash deposit accounts offered by more than 40 financial institutions.
The fintech group helps clients diversify the concentration risk of their cash deposits by enabling them to take advantage of protection offered under the Financial Services Compensation Scheme, which provides a government guarantee up to £85,000 for customer accounts.
Flagstone's cash deposit platform is used by Revolut, the digital bank, and is the exclusive provider to clients of the Charities Aid Foundation and St James's Place, the wealth manager.
Simon Merchant, co-founder and co-managing partner of Flagstone, said its new financing would "support the acceleration of our plans to extend our penetration of the UK market to new customer segments".
The company last raised new funds less than a year ago, and the latest round is likely to have been completed at a significant premium to its last valuation.
Harry Briggs, OMERS Ventures managing partner, said: "The [Flagstone] founders know this market inside out and have quietly built the runaway market-leader in the UK by addressing systemic issues in the banking system by using smart technology to help empower users to earn more interest income and reduce risk.
"In these uncertain times, everyone - households, small businesses, charities - is anxious about cash, and Flagstone helps people make their money work harder for them at the click of a button."