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Barclays and Santander back MarketInvoice as banks continue to go big on fintech

Oscar Williams-Grut
Senior City Correspondent, Yahoo Finance UK
Vote of confidence: MarketInvoice CEO and cofounder Anil Stocker. Photo: MarketInvoice

British fintech startup MarketInvoice has raised £56m ($71.9m) in debt and equity funding, attracting investment from high street banks Barclays and Santander.

MarketInvoice announced on Monday that it has raised £26m in equity funding. The round was led by Barclays, with participation from Santander’s venture capital arm InnoVentures. European venture capital firm Northzone also took part in the fundraising.

Alongside the equity investment, MarketInvoice announced a new £30m credit facility from Isreali company Viola Credit. Viola Credit is also investing in MarketInvoice’s shares as part of the deal.

Founded in 2011, MarketInvoice’s online platform lets small businesses do invoice factoring. Cashflow in businesses can often be a problem as firms sometimes have to wait months for invoices to be paid. Invoice factoring solves this problem by allowing the business to sell the invoice to an investor for slightly less than the face value of the amount. This gives the business immediate cash and means the investor makes money when the invoice is eventually paid.

MarketInvoice operates a marketplace model and sophisticated investors and institutional investors buy the invoices over the platform.

The London startup has sold 170,000 loans over its platform, facilitating lending of £2bn. More recently it has launched newer products such as business loans and overdraft-like products.

MarketInvoice cofounder and CEO Anil Stocker said the investment from Barclays and Santander was part of a move towards strategic partnerships. He said the partnerships would help give MarketInvoice access to more data to refine their model.

As part of the investment, Barclays will offer MarketInvoice’s products to its small and medium-sized business customers.

Stocker said it was “win-win” for Barclays as it allowed them to “get the product out much faster and drive innovation within the bank.”

The investment from Santander and Barclays comes as traditional banks continue to back innovative startup businesses. Royal Bank of Scotland recently announced an investment in millennial focused banking startup Loot and Lloyds Bank invested in core banking startup Thought Machine at the end of last year.

“What I’m seeing is the banks are realising the landscape is moving very fast,” Stocker said. “Quite a lot of banks have gone through this soul searching and decided they want to work with fintechs, they’re not going to build a walled garden.”

MarketInvoice, ThoughtMachine, and Loot are all part of a global wave of fintech innovation that has occured over the last decade. Originally, many fintechs aimed to replace or compete with banks. Traditional banks dismissed the startups as simply flys on the back of elephants.

However, fintechs have increasingly looked to collaborate with more traditional banks to help them grow and reach more customers. Banks also now see the benefit of offering more innovative products to their customers to help keep them happy.

“You’re seeing fintechs starting to collaborate with banks and I think that trend will accelerate,” Stocker said.

Ian Rand, CEO of Barclays Business Bank, said in a statement: “Collaborating with fintech companies like MarketInvoice is an integral part of Barclays’ strategy for accelerating growth.”

The investment takes MarketInvoice’s total funding to over £45m to date.

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Oscar Williams-Grut covers banking, fintech, and finance for Yahoo Finance UK. Follow him on Twitter at @OscarWGrut.

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