UK fintech MarketInvoice wins backing from Barclays and Santander as banking disruption gathers pace
- Fintech lender MarketInvoice has secured Series B funding from major banks including Barclays and Santander's fintech fund Inno Ventures.
- It's the first major UK fintech debt and equity funding in 2019, coming just ahead of Brexit.
- The funding will help MarketInvoice expand its UK business operations and values the company at £85 million ($110 million).
UK fintech MarketInvoice has kicked off the funding market for 2019 with the backing of Barclays and Santander as part of a £56 million ($72 million) debt and equity financing.
The companies declined to comment on valuation, but documents filed with Companies House suggest the deal valued MarketInvoice at about £85 million, according to the FT.
The deal demonstrates a disruptive shift in the consumer banking industry. The success of challenger banks and payment services such as Revolut and investment platforms including Robinhood have highlighted the potential gold mine in tapping millennial spending. Big banks have taken notice, with Goldman Sachs, JPMorgan, UBS among those that are also ramping up their expansion.
Read more: Once big banks crack the code of how to win millennials, star fintech unicorns may be crushed
Barclays and Santander's Inno Ventures fintech fund led the £26 million in equity funding for MarketInvoice while Israeli technology fund Viola Credit, who also participated in the equity round, will provide a debt facility of up to £30 million. European venture fund Northzone also provided equity funding.
MarketInvoice, founded in 2011, specialises in invoice finance, in which small and medium-sized businesses smooth out cash flow by borrowing against money they are owed by customers.
Banks are increasingly keen to work with disruptive fintechs, even if they effectively compete for the same customers.
"We have a long term partnership with Barclays which we launched last September," said Anil Stocker, CEO of MarketInvoice in an interview. "It's provided us with hundreds of leads and helps us connect to SMEs across the UK."
MarketInvoice also offers unsecured loans, and has extended a total of more than £2 billion to businesses so far with the funding expected to expand the company's international reach.
"Collaborating with fintech companies like MarketInvoice is an integral part of Barclays' strategy for accelerating growth," said Ian Rand, CEO of Barclays Business Bank. Barclays announced a partnership with MarketInvoice last year and has continued its programme with this investment.
Since launching in 2014, Santander's Inno Ventures has invested in 22 portfolio companies and has been named as the most active bank-backed fintech corporate venture in the world by CB Insights.