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Details of the transaction, including the size of the stake and the amount Barclays has paid, haven't been disclosed, per Finextra.
Flux, which is an alumnus of Barclays' London-based fintech accelerator - Rise - and was launched in 2017, integrates with mobile banking apps, allowing it to show digital receipts in the apps whenever a consumer pays with their bank credit or debit card at partnering merchants.
As of December 2019, the startup had issued over 1 million digital receipts across the UK, representing 1,000% year-over-year (YoY) growth. Barclays' investment follows an existing working partnership with the startup.
The deepening relationship between the pair is likely to boost Flux's already strong growth trajectory. Flux's past relationship with Barclays has likely helped it unlock significant growth by giving it access to the bank's considerable user base of merchants. Now that Barclays has taken a stake in the startup, Flux's growth opportunity could be further augmented: It could enable Flux to expand its operations beyond the UK into other markets where Barclays already has a strong presence, such as the US, for instance.
The relationship will also bring value to Barclays, especially since banks are increasingly coming under attack for their involvement in projects that are contributing to climate change. Moreover, 42% of millennials have deepened a relationship with a business because of its positive impact on society or the environment, making a service like Flux appealing to younger demographics.
The news also demonstrates the success of Barclays' accelerator program at a time when incumbents are struggling with their in-house innovation projects. Since the bank launched its London accelerator in 2014, it has inked numerous deals with alumni fintechs, including software startup Simudyne.
And just this week, we reported the bank had struck a partnership with another alumnus - insurtech Nimbla - that will enable Barclays' 1 million small- and medium-sized business (SMB) customers to take out insurance for a single invoice for as little as £6 ($7.86), rather than having to insure a whole book, which can cost around £5,000 ($6,549). Successfully integrating with fintech propositions it identified early on to boost its existing capabilities contrasts with the struggles its UK-based peer RBS has had over its own digitization efforts.
The bank spent more than £100 million ($130 million) building out Bó, a standalone challenger bank, but the project has struggled recently, not least with Mark Bailie, Bó's CEO, departing weeks after its high-profile debut. As players like RBS struggle with internal efforts aimed at pushing back against fintech disruptors, we could see more players adopting Barclays' approach.
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