GALLERY

Top fintech startups in the UK

The UK fintech sector is booming. According to data from Innovate Finance, the UK fintech sector attracted record investment of $4.9 billion in 2019, surpassing the $3.6 billion from 2018. This makes the UK the second biggest fintech market in the world, after the US, when it comes to VC investment.

A combination of the country's established expertise in finance, regulatory support for open banking, and the growing number of consumers giving up on incumbent banks means investors are betting big that digital disruption to the sector will continue.

Here are some of the hottest fintech startups that are attracting their investment.

Additional reporting by Thomas Macaulay

 
Thought Machine

Thought Machine

Founded in London by four ex-Googlers in 2014, Thought Machine spent two years developing its VaultOS (now just branded Vault) core banking platform, which it unveiled in 2016. Since then, it has forged high-profile partnerships with IBM, Atom Bank and Lloyds Banking Group, which also invested £11 million in the company in 2018 in exchange for a 10 percent stake. No customers have announced that they are live with Thought Machine's core banking platform yet.

CEO Paul Taylor was a research scientist at Google after his startup Phonetic Arts was acquired by the search giant. The company's CTO Will Montgomery was a senior software engineer at Google before joining his fellow Cambridge alum at Thought Machine and the company's COO Matt Wilkins and CIO Peter Ebden are also both ex-Google.

Read next: Lloyds set to gamble on UK startup's cloud-native core banking platform

Vault was built to be cloud-native, enabling cheaper and faster scaling as more customers come on board, without the need for expensive in-house data centres and large operations teams to keep creaking infrastructure stood up. It runs on AWS, Google Cloud Platform (GCP), IBM Cloud and Microsoft Azure.

Thought Machine raised $83m (£63.8m) in Series B funding in March, led by Draper Esprit with contributions from existing investors IQ Capital, Backed, and Playfair Capital.

Primer

Primer

Primercame out of stealth in early 2020 and is still only available to early-access customers, but its aim is to consolidate all of the various pieces of technology required to allow payments across different methods and geographies, with analytics, anti-fraud and compliance controls all baked in.

Founded by employees of PayPal's own digital payment arm Braintree, cofounders Paul Anthony and Gabriel Le Roux have a good grasp of this area and will look to solve merchants' problems through a single, consolidated API.

Primer raised £3.2 million in May, led by Balderton Capital and with participation from TransferWise founder and angel investor Taavet Hinrikus.

Hastee
iStock

Hastee

Founded by James Herbert in 2017, Hastee offers employees flexible access of up to 50% of their earned pay on demand via its app. Employees then pay back Hastee on each pay day, so Hastee takes all the risk and the employers' cash flow is not affected. This allows workers to access their earnings more flexibly without impacting their credit score, as it is not a loan.

Employees can make one withdrawal of up to £100 every month for free, and further withdrawals are subject to a 2.5% fee. The app also offers financial wellbeing advice to avoid any inadvisable spending. Hastee integrates with most existing HR and payroll systems and customers include London City Airport, IRIS, Avery Care Homes, and food and beverage group Mitchells & Butlers.

Hastee raised an eye-popping £208 million funding round in December 2019 led by Umbra Capital and supported by IDC Ventures.

Currencycloud
iStock

Currencycloud

Founded in 2012, Currencycloud specialises in 'embedded' cross-border payments, which means it has built an enterprise-grade API that allows partners like Visa, Standard bank and Starling Bank to easily offer their customers cross-border payments.

Currencyloud raised a $80 million (£62 million) Series E funding round in January 2020 with investment from Visa, BNP Paribas, World Bank Group and Siam Commercial Bank, as well as Sapphire Ventures, Notion Capital, Google Ventures and Softbank’s investment arm (SBI).

Mojo Mortgages

Mojo Mortgages

Cheshire-based Mojo Mortgages combines its own algorithms with human mortgage brokers to help anyone seeking a mortgage to check their availability quickly online, compare offers from 90 lenders and then jump on a call with an advisor to hash out the details. It also offers a free MortgageScore service online to help first time buyers see where they can improve their chances of getting a loan. Mojo then gets 0.4% of the loan amount secured as a broker.

Mojo is entering a busy space however, with digital brokers Habito and Trussle having first mover advantage when it comes to digitising and simplifying the notoriously tricky UK mortgage process.

Mojo Mortgages raised a £7 million Series A funding round in February 2019, led by Maven Capital Partners and NVM Private Equity.

Paid
© Paid

Paid

Based in Durham, Paid allows gig economy workers and freelancers to get paid as soon as work is completed instead of waiting for late invoices.

Founded by Tom Howsam in 2017 it's an appealing proposition to any freelancer that has had to wait for an invoice to come in to pay an important bill. The product is still in private beta but once you have agreed some work for a client Paid will step in with an online contract guaranteeing payment within three days after completion of the project, with a 7.5% cut taken for the privilege of not having to chase an invoice. Paid will then wait on the client to complete payment in the background.

In its FAQ section, Howsam explains: "[Paid is] an intermediary between you and your clients. Providing a wrapper round both parties to ensure that the process of working together is smooth. For you the supplier we make sure your contracts are water tight so there is total confidence your client is accepting the work you are proposing. As the project is carried out we can cater for changes throughout making sure each change is also documented appropriately."

Tumelo
iStock

Tumelo

Founded by William Goodwin, Georgia Stewart and Ben King, Tumelo wants to help investors make more socially responsible investments.

The Bristol-based company started with the idea of building a socially conscious investment app, allowing users to make positive investments in a portfolio of companies related to areas they are passionate about, be it climate change or diversity and inclusion.

After limited uptake it has since pivoted to providing data to existing investment advice providers – be that human financial advisors or online investment platforms like Nutmeg and Wealthsimple – to provide their users with greater transparency into the ethical practices of the companies within their portfolios, as well as empowering them to use their shareholder power and perks.

The software-as-a-service (SaaS) dashboard and underlying API can be integrated into existing solutions by these companies as a value add for their more socially conscious customers. It charges the advisors a monthly fee for access to the dashboard and transparency API and is also building a data service where it can show companies what their most engaged investors are passionate about.

"Users want transparency to show what they are actually investing in," Goodwin told Techworld. "[Now] you can type in the name of your fund and we can show all the underlying holdings of that so that people realise they are invested in companies and can start to engage and get their shareholder vote, campaign and get perks."

Tumelo raised an undisclosed seed funding round through the Pitch @ Palace programme 2018.

PrimaryBid

PrimaryBid

Ever wanted to get in on the action when a hot technology company like Spotify hits the stock market? PrimaryBid aims to give public investors access to new share issues from European listed companies at the same generous discount that institutional investors get. The FCA-regulated startup gets a percentage fee from the companies it raises for, so doesn't charge customers a commission.

Once subscribed to the service PrimaryBid will inform you of upcoming share offers at discounted rates. You can then buy between £100-100,000 of shares and have them transferred where you want. Once the offering is gone, it is gone and these are risky investments.

Founded in London three years ago by Anand Sambasivan, Kieran D'Silva and James Deal, PrimaryBid raised £7 million in September 2019, led by UK venture capital firms Pentech and Outward VC, with participation from new and existing investors. It has raised nearly £10 million in total to date and the startup is eying European expansion.

Soldo
© Soldo

Soldo

Soldo started life as a consumer-facing fintech which provided multi-user spending accounts and pre-paid debit cards aimed at families, before pivoting to the business market as an expense management platform.

Founded by Italian entrepreneur Carlo Gualandri, Soldo now focuses on making it easier for businesses to hand out corporate spending cards, put restrictions on them depending on the employee and easily track and log all spending, with integrations to popular accounting software like Xero, Sage, SAP and QuickBooks.

That pivot proved fruitful when the firm raised $61 million in a Series B funding round led by Battery Ventures and Dawn Capital, with participation from previous backers Accel and Connect Ventures, and some debt financing from Silicon Valley Bank in July 2019.

In the UK it charges £5 for each plastic card issued or £1 for virtual cards, as well as up to £7 per card per month for the enterprise analytics and integrations and a 1% fixed rate for foreign exchange.

Credit Kudos

Credit Kudos

Credit Kudosis a challenger credit bureau founded in 2015 by Freddy Kelly and Matt Schofield after Kelly struggled to get credit upon returning to the UK after a stint working overseas in the US.

The idea was to create a credit scoring mechanism that takes in more current data on a person to give a fuller picture of their credit than the traditional agencies, like Experian. "They are backward looking," Kelly told Techworld, "so it misses a lot of information about people that paints them in a better light." This can then be white labelled by other lenders to help them onboard and approve more customers.

Kelly said the enforcing of open banking regulation across Europe, through PSD2 and the UK's own regulations, was "our inflection point to access this data."

Now it is able to link with your bank accounts to see your existing financial commitments and what you can afford to borrow. So even if a customer has never had a credit card before its algorithms work out how much debt you can take on based on your actual financial history.

Credit Kudos raised a £5 million Series A funding round in April 2020, led by AlbionVC and joined by TriplePoint, Plug & Play Ventures, the Ascension Ventures’ Fair by Design fund, and Entrepreneur First (EF), as well as some well-known fintech angels.

OpenFin

OpenFin

London-based OpenFin calls itself the operating system for finance. In reality this is a range of modern desktop applications that sit on top of legacy systems, allowing financial services firms to theoretically move away from archaic systems for their employees and drive greater agility.

The startup also launched a new Cloud Services offering in ? to provide firms with the ability to offer private app stores for employees and customers.

OpenFinclaims to work with most major banks and asset management firms already, who are running more than 1,000 applications across 200,000 desktops in 60+ countries.

It raised $17 million (£13.4 million) in Series C funding in May 2019 from big names like Wells Fargo, Bain Capital Ventures, J.P. Morgan and Pivot Investment Partners. OpenFin has now raised more than $40 million (£31.5 million) to date.

"Agility and interoperability are core pillars of our digital strategy because time is a precious resource, especially in a banking environment. OpenFin accelerates our innovation cycle and allows us to create better workflows, enabling our colleagues and clients to make more productive use of their time,” said Brett Tejpaul, head of digital and client strategy at Barclays Investment Bank said as part of the latest funding announcement.

Tully
© Tully

Tully

Tullyis an online budget builder that leverages open banking data to ease customers concerns and offer tangible advice to better manage their money. It was authorised by the Financial Conduct Authority in March as a digital debt advice solution.

Thanks to open banking Tully is able to access your transaction data (with your permission) where it can start to create a detailed and realistic budget complete with a wide range of debt options and advice with a flexible repayment plan that adapts to your finances, so an MOT you forgot about or a broken boiler won't derail your life. Tully makes money on these lender referrals.

It is only in early access for now but came out of 'venture builder' Blenheim Chalcot and recieved FCA authorisation in early 2019. The CEO and cofounder Stuart Bungay is ex-Barclaycard and CCO Steve Bradford is an experienced fintech operator.

Wagestream
© Wagestream

Wagestream

London-based fintech Wagestream is declaring war on the payday loan by allowing employees to get an advance on a pre-agreed proportion of their monthly salaries for a flat fee of £1 via its online platform. The startup charges 50p per employee per month to the employers themselves for offering this facility. Gym group David Lloyd, Camden Town Brewery, Slug & Lettuce pubs and Carluccio’s restaurants are named customers.

Wagestream raised a £20 million Series B funding round in July 2020, lef by Northzone with participation from QED Investors, Latitude Ventures and Balderton Capital. This brings total investment in the startup to £65 million.

Dozens

Dozens

Founded by ex-HSBC employee Aritra Chakravarty, Dozens takes a more drastic approach to creating a new way of banking, based on his idea that banking does not currently benefit the customer.

"We’re changing the fundamental model of banking," he told Techworld. The idea is to build a combination of a digital current account which prioritises effective saving and investing so that customers get more from their money than with traditional providers. "The journey we are trying to follow is spender to saver and saver to investor," he added.

Chakravarty takes a pretty academic approach to the problem, which you would expect from someone that did their Masters in finance at the London Business School. "This is based on a statistic I saw: most people check their balance in their app twice a day. Not everyone is doing that so there must be some segments that are checking a lot, and if you are you aren't making savings, it is to check if you can buy the next pint of beer. So they needed better budgeting tools to even get onto the savers track."

In practice this means when you sign up with Dozens you open both a current account and an savings account at the same time. Money held in that savings account can be put into a 5% per annum interest bond to help you start benefitting from savings straight away.

As the website states: "Our income as a business is directly linked to the returns we create for you. We keep a smaller share and pass on the majority to you. Unlike most banks, we are not looking to make money from things like overdrafts, but by helping you save, invest and grow your money. So our goals are the same as yours."

Dozens received $8 million (£6 million) in seed funding from Hong Kong-based STI Financial Group and £3 million in seed funding in May 2019.

 
Exo

Exo

Exois a London and Madrid-based fintech startup that offers an AI-powered robo-advisor service to customers, as well as a platform-as-a-service solution for other businesses looking to offer similar automated investing services.

The firm is backed by Spanish asset management firm ETS, which was looking for a way to offer it's algorithmic investing to retail customers.

In practice you let Exo know about your financial situation and risk profile and investment preferences. It then automatically builds a portfolio from a range of exchange traded funds (ETFs), which is reviewed by the technology daily and can be viewed and tweaked by customers. It charges a 0.75% fee on your first £5,000 - £100,000, dropping to 0.5% beyond that.

Chief operating officer Nikolai Hack explained to Techworld that unlike most robo-advisor services, like Nutmeg and Wealthsimple, EXO aims to truly automate the entire end-to-end investment process.

The business to business solution basically platforms these capabilities via a set of API's, so that other companies can set up what Hack called "wealth management-as-a-service".

Exo has raised £14 million to date and is backed by ETS and Benjamin and Ariane de Rothschild.

 
Monzo
© Monzo

Monzo

Digital challenger bank Monzo is London's fintech darling. The bank's popular app offers real-time information about your money, simple peer-to-peer transactions, lower fees on international spending and withdrawal, and its coral coloured cards have become something of a status symbol, especially in the capital.

Monzo gained its full, unrestricted banking licence from UK regulators in February 2017, meaning it can hold customer money and offer products like current accounts.

Founder and former GoCardless cofounder Tom Blomfield wrote in a blog post in 2017: "We're tired of hidden fees and charges, endless paper forms, and nothing quite working in the way we'd expect. So we're trying to build a bank that we’d want for ourselves, our friends, and our families."

Monzo achieved 'unicorn' status of a $1 billion valuation in 2018, before raising a further £113 million in June 2019, led by Y Combinator's Continuity fund and venture capital firm LocalGlobe, with the money earmarked in part to fund expansion to the USA.

It then raised a further £60 million funding round in June 2020 at a £1.25 billion valuation, marking a 40% valuation drop from its previous raise, as the company grappled with the global pandemic.

Starling Bank
© Starling

Starling Bank

Founded by Anne Boden, the former chief operating officer of Allied Irish Bank, Starling Bank received its initial licence with restrictions in July 2016 and started accepting beta customers to open current accounts through its app in March 2017.

That December, it became the first mobile-only bank to gain approval from the Prudential Regulation Authority and the Financial Conduct Authority to offer direct access to a wide range of financial products, including loans, mortgages and ISAs.

Read next: 'Banking is broken and we must start from scratch', says Starling CEO Anne Boden

As well as offering a digital-only current account, Starling provides business banking, various borrowing options and no-fees travel spending.

Starling raised £40 million from existing backers in May 2020, following a £60 million funding round in February 2020, led by Merian Chrysalis Investment Company and JTC. This brings total funding to more than £360 million for the company.

Divido
© Divido

Divido

Dividois a retail finance platform that enables companies to offer instalment payments to their customers online, in-store and over the phone. The platform connects to multiple lenders to deliver higher acceptance rates and lower fees for multiple finance products, from 0% interest to guarantor loans.

The company was founded in London in 2014 by a trio of Swedes, and has gone on to raise a total of £14.3 million, including $15 million (£11.4 million) from a September 2018 Series A round led by Dawn Capital and DN Capital. The cash injection will help Divido continue its global expansion into 10 more countries by the end of 2019.

Read next: Meet Divido, the fintech looking to democratise instalments

TrueLayer
© TrueLayer

TrueLayer

TrueLayer is a London-based fintech startup which is building APIs to allow fellow fintech startups to access customer's banking information, with their permission of course.

With the introduction of open banking here in the UK, the big banks now must open up access to customer's account information if requested to do so. So TrueLayer has built an API enabling access to the newly opened banking data, without fintechs having to design their own integrations, charging a small fee for access to the API.

The data API, which is live now, allows clients to access identity data, balance and transactions from their users' bank accounts. The payments API will allow users to transfer funds directly from their bank account as an alternative to card payments and direct debits.

TrueLayer was founded by former Silicon Valley venture capitalist Francesco Simoneschi and raised a $35 million round in June 2019 from Chinese technology giant Tencent Holdings and Singapore government-owned fund Temasek, with a view to expand across Europe. It had previously raised $4.5 million of funding across two rounds from the likes of Connect Ventures and Anthemis Group.

Paybase
© BetaList

Paybase

London-based Paybase has built an end-to-end payments, compliance and risk management solution into a single API. Cofounded by Chris Wessels and CEO Anna Tsyupko and in 2016 and the startup went live with its first product in early 2019.

The idea is to make payments simple for businesses by integrating payments into their existing product flow through a single API which links their business to multiple payment partners, with risk and compliance taken care of. The solution is aimed at platform companies that have to pay a wide range of people and suppliers as well as crypto businesses.

Paybase has raised more than £7 million in funding to date and plans to scale into the European market in 2020.

Nutmeg
© Nutmeg

Nutmeg

Nutmeg is one of a handful of fintechs looking to democratise investments via an online platform. Nutmeg acts as an online wealth manager from as little starting capital as £100 through a variety of vehicles, from ISAs to pensions.

Read next: Meet the team behind Nutmeg: the fintech upstart that hopes to democratise investing

When you register you tell the platform what you are saving for and how much risk you want to take before being presented with a portfolio that you can check in on 24/7. The investment decisions are made by the Nutmeg team on your behalf without the use of algorithms. You can withdraw your money whenever you want with no exit fees.

All the hallmarks of a good fintech company are there: a user-friendly online interface, transparent pricing and a mission to bring down barriers. In November 2017, Nutmeg reached more than £1 billion in assets under management, after doubling its number of clients to 48,700.

Nutmeg last raised a £45 million Series E round led by Goldman Sachs, bringing total funding to north of £100 million.

GoCardless
iStock

GoCardless

Founded by Oxford graduates Matt Robinson and Hiroki Takeuchi, GoCardless uses technology to process business-to-business payments and direct debits quicker than traditional providers.

The technology brings down barriers for small businesses to process direct debits by aggregating payments, and fees are kept low at one percent per transaction which is capped at £2.

Customers can process payments using one of three tools: an online dashboard, account software partnerships or as an integration via an API. Customers can't accept credit card or instant payments via the platform though and the system is limited to the UK and Europe as the company continues to grow.

GoCardless raised a $75 million (£57 million) Series E funding round in February 2019 led by Adams Street Partners, GV and Salesforce Ventures, with the money earmarked for global growth into the US

Revolut

Revolut

Revolutstarted life as a mobile wallet app to help customers avoid fees when sending and receiving money in foreign currencies. Now it does a bit of everything when it comes to personal or business finance, from savings and budgeting to cryptocurrency and metal cards.

Revolut raised a $500 million Series D funding round in February 2020 led by TCV, taking the total amount raised by the company to $836 million. Previous investors include DST Global, Index Ventures and Ribbit Capital.

Receipt Bank

Receipt Bank

Receipt Banklooks to solve a tedious business problem: bookkeeping.

Instead of accountants having to receive invoices and manually input the information into an Excel spreadsheet, the cloud-based software automatically extracts the data into the platform. It can then deliver downloadable spreadsheets or integrate with your existing cloud-based accounting software, saving accountants and small businesses time and effort.

All users have to do is get clients to send their invoices and expense claims into the Receipt Bank email address provided when you register.

Receipt Bank raised a massive $73 million Series C funding round in January 2020 led by Insight Partners, bringing total funding to more than $130 million.

ClearBank
© ClearBank

ClearBank

ClearBankis the UK's first new clearing bank in more than 250 years. Launched by Nick Ogden, formerly of Worldpay, ClearBank is a little different to most fintech companies in that it is not for consumers.

Instead, ClearBank provides access to the primary UK payments and card issuing systems, like Faster Payments and SWIFT, for new entrants to the financial services industry to get started quickly and easily.

The startup will be using Microsoft cloud technology through two data centres, which it hopes will give it greater agility, transparency and the ability to charge lower fees than the big four clearing banks, which are laden with legacy technology.

Ogden himself is worth north of £40 million and the startup has been backed by John Risley, a Canadian entrepreneur, and Petr Kellner, who founded the PPF investment fund.

iwoca
© iwoca

iwoca

London-based fintech startup iwoca (instant working capital) gives small businesses fast and flexible access to capital, without the upfront fees, lengthy forms and long-term commitments traditionally associated with business credit.

The founding team consists of CTO James Dear, who holds a PhD in theoretical physics from Kings College London, and CEO and ex-Goldman Sachs trader Christoph Rieche. In January 2018 it was awarded a £100,000 prize by innovation foundation Nesta's Open Up Challenge for its work on open banking technology.

The secret sauce of iwoca is its risk model, which uses big data techniques to assess small businesses' trading data to make a quick, informed assessment of risk and what credit limit they are subsequently willing to give, ranging from one month's revenue to £200,000. There are no upfront fees; iwoca charges a basic interest rate starting at two percent and increasing the longer you take to pay.

iwoca has raised a $150 million (£113 million) Series D round in February 2019 led by Augmentum Fintech.

Tide
© Tide

Tide

Tideis a fintech startup focusing on business customers.

Business banking is notoriously antiquated and time-consuming, so Tide has created a set of tools to try and help small business owners with their banking. Customers can get started straight from their mobile by scanning an ID and will be sent a Mastercard to use for business transactions.

Tide also provides a set of digital tools to help simplify some of the more time-consuming aspects of business banking. This includes automated bookkeeping, expense tracking with the ability to attach notes, incomes and photos to each transaction, and automated invoice scanning.

Your money will be held by Barclays but it won't be re-invested by the bank. Tide also charges lower fees than normal business accounts, with no account or card purchase fees, 20p per transfer and £1 per ATM withdrawal.

Tide raised a $44 million (£36 million) funding round in October 2019 led by the Softbank spin-off Strategic Business Innovator Group (SBI) with participation from existing investor Augmentum. It has now raised in excess of $200 million

Chip
© Chip

Chip

Chipis an automated savings app which links up with your current account. The Chip algorithm calculates how much you can afford to save and transfer it to a Chip savings account - held with Barclays - adjusting all the time depending on spending habits.

Users of Chip simply have to download the iOS or Android app and grant Chip read-only access to their online banking through an encrypted API.

Chip currently works with Barclays, HSBC, Santander, Lloyds, NatWest, Nationwide, RBS, TSB, Halifax, First Direct, Cooperative Bank and Metro Bank. The mobile savings app is a busy space, with rivals like the Facebook messenger app Plum and Moneybox offering alternatives.

The startup raised £7.3 million from angel investors in November 2019, with an additional £3.8 million in crowdfunding, which is in addition to a further £4 million in crowdfunding raised in 2018. The investment is earmarked for technology and new hires and launching an in-app marketplace.

Bud
© Bud

Bud

Budstarted life as an app which helps customers bundle all of their financial services into a single digital wallet to help keep tabs on all transactions and cut through the noise.

It has since grown into a platform allowing users to bring all of their finances into a single place by leveraging open banking APIs.

Read next: Meet Bud, the startup that hopes to become your best fintech friend

Bud raised $20 million (£15 million) from a set of major global banks, including Goldman Sachs, as well as a group of angel investors in February 2019.

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