Fintech Cushon Raises £35m and Announces Third Acquisition in Its Mission to Lead a Tech-revolution of UK Pensions
- Fundraising News
- 20.01.2022 03:35 pm
- Workplace savings fintech, Cushon, closes latest £35m fundraising round, bringing total raised over past two years to £61m.
- The new capital is being used to fund its latest acquisition, scale operational capability, and invest in technology and product development.
- Cushon is acquiring the Creative auto-enrolment scheme which is Cushon’s third acquisition in two years and will result in the fintech looking after £1.7bn of assets for 400,000 customers.
- The workplace pensions industry is under pressure from the UK government to consolidate, deliver better value for money, and to make better use of its financial muscle in the fight against climate change. This announcement is a key milestone in Cushon’s mission to lead a tech-revolution of the industry with its sustainable, environmentally-friendly investments.
Workplace savings fintech, Cushon, has successfully closed a £35 million fundraising round and announces its third acquisition, as part of its drive to lead a tech-revolution in workplace pensions and savings.
The £35 million was provided entirely by Cushon’s existing investors, including fintech venture capitalist, Augmentum Fintech Plc, and AshGrove Capital, a leading independent pan-European specialty lending firm. Other companies in Augmentum’s portfolio include Tide, Interactive Investor and Habito.
Today’s announcement brings the total amount raised by Cushon over the last two years to £61m, with the acquisition making Cushon the fifth largest master trust pension provider in the UK and doubling its assets under management from £840 million to £1.7 billion across 400,000 customers.
The fintech is on a mission to lead a tech-revolution of the workplace savings and pensions industry, with the industry under pressure from the UK government to consolidate and deliver better value for money, and to make better use of its financial muscle in the fight against climate change. There have been four major consolidations in the workplace pensions market in the past two years, three of which have been completed by Cushon.
This funding not only supports Cushon’s acquisition of the Creative auto-enrolment scheme but also provides significant growth capital for Cushon to further develop its market-leading mobile app, operational capability and organic growth. This will enable Cushon to offer faster onboarding of employers who want to offer their staff an app-first, climate-friendly, workplace savings solution.
The UK pensions market is the third largest in the world – with a total of £2.58 trillion invested1 – and the way people’s money is invested has a significant impact on society and the environment. The average UK pension finances a staggering 23 tonnes in CO2e every year, roughly equivalent to 5 family cars. Cushon aims to have a positive impact on society by making saving and investing through the workplace more convenient, better value for money, and with a clearer connection to the impact people’s money is having on the world.
Ben Pollard, CEO and founder of Cushon, said:
“Our mission is to offer UK savers a convenient, climate-friendly, and great value way to save, through a combination of cutting-edge technology and socially responsible investments. Right now, workplace pensions are simply too complicated, boring, and disconnected from things people care deeply about. Cushon is here to change that, and today’s announcement is a hugely significant milestone for us. The funding will continue to fuel Cushon’s growth, enable us to scale even faster, and accelerate some exciting new features within our app.
“It will also support the acquisition of Creative which not only doubles the reach of our app-first climate-friendly pension, but also incorporates the talent, expertise and credibility of the Creative business. This is another momentous step on our journey to ensure millions of people across the UK have the ability to access innovative workplace savings solutions in the palm of their hand, together with a right to feel optimistic for the future they are helping to build via their investments.”
Tim Levene, CEO of Augmentum Fintech, said:
“Workplace pensions and ISAs are ready for transformative change. Public policy will continue to encourage people to save more and there is significant opportunity to successfully challenge incumbents struggling to transform digitally. Cushon has become the leading digital disruptor in this space with a world class technology platform and a truly innovative product.”
Phil Fretwell, Founding Partner at AshGrove Capital, said:
“We are delighted to continue to support Cushon with further acquisition and growth funding. The acquisition of Creative is a significant milestone that more than doubles Cushon’s assets under management and positions Cushon as the stand out consolidator in the tech-enabled workplace savings market. The combination of structural organic growth in master trusts, driven by annual inflows, coupled with a clear market need to consolidate master trusts in order to drive better outcomes for savers remain central tenants to our investment thesis. We look forward to continuing to work with the team on the many exciting initiatives Cushon has planned.”
This is Cushon’s third master trust acquisition in two years which is in line with regulatory goals to drive further consolidation in the market. When completed, the deal brings Cushon’s total assets under management (AUM) including ISA savings to around £1.7 billion – a 102% increase on current AUM – with annual inflows of more than £300 million. Completion of the acquisition, which is expected in Q1 2022, is subject to regulatory approval.
Sally Webber, CEO, at Creative, said:
“With more and more customers looking to use technology to manage their pension, and a heightened focus on the environmental and social impact of investments, joining the Cushon group will allow us to ensure our customers’ interests are both considered and protected. Our employers and customers alike will benefit from Cushon’s wider workplace savings offering and its innovative, technology-led approach – an approach that is unlike any other workplace savings provider in the market.”