Ebury nabs £350M for foreign exchange and currency services for SMEs, Santander takes 50.1% stake

As the UK continues on its slow march to leave the European Union, a London-based startup that enables companies to work internationally has raised a huge round of funding from a strategic backer to expand its business. Ebury, which provides foreign exchange, money transfer and other currency services to small and medium businesses and their banking partners, has picked up £350 million (about €400 million, or $452 million) led by Spanish banking giant Santander. With the deal, Madrid-based Santander will become a majority shareholder at 50.1% but notes that Ebury will continue to operate as an independent entity.

Ebury and Santander said that the funding will be used to support Ebury’s growth, and specifically to scale its customer base in Latin America and Asia, while at the same time bolting on more modern services to Santander’s offerings as it seeks both to expand its revenues from existing customers and take on new ones.

Santander said that it has 4 million SME customers globally, and currently more than 200,000 of them do international business, while Ebury is already operating 19 countries and covers 140 currencies, with annual revenue growth of 40% in each of the last three years.

But putting to one side 4 million businesses, even providing services to 200,000 customers would be a big step up for Ebury: the company said that last year it processed £16.7 billion in payments for just 43,000 clients.

Santander said that its investment gives it a 50.1% stake in the company, but it is not disclosing total valuation. On a straight percentage, it would work out to about £700 million, or $902 million, but it sounds like the deal includes both primary and secondary investment — “£70 million will be new primary equity (approximately €80 million) to support Ebury’s plans to enter new markets in Latin America and Asia,” the companies note — and that could change the numbers. Santander is optimistic and said it expects a return on its invested capital in Eubury of higher than 25% in 2024.

Ebury’s existing investors and co-founders and management will also invest in the transaction. Past backers include 83North (formerly Greylock Israel) and Vitruvian Partners, among others. 

Founded in 2009, it has to date raised $134 million.

Services that Ebury currently provides include currency transfer and exchange, but it looks like there will be  more down the line. Just last month, Ebury announced that it had acquired another fintech called Frontierpay, which specialises in international payroll solutions. The deal is still going through regulatory approavals.

Many have lamented the fact that startups out of Europe find it hard to scale and grow and need to look to markets like the US for that kind of funding and support — often relocating in the process. Fintech is one of the big areas that bucks this trend.

Adyen built and still operates its successful online payments business out of the Netherlands; Revolut, Monzo and a wave of other so-called ‘challenger banks’ are revisiting what it means to provide banking services to consumers and businesses; and TransferWise — itself a major player in currency transfer services focusing both on individuals as well as businesses — are among the many that have scaled internationally out of Europe and have valuations in the billions.

Indeed, it’s competition from the likes of TransferWise that may have spurred Santander to invest in Ebury.

If bringing Ebury’s technology to the Santander platform will give the legacy bank a better way of competing in a market that’s seeing a lot of challengers at the moment, it also gives Ebury a stronger underpinning for those skeptical of doing business with a newer startup.

“Combining a big bank with nimble fintech means we can offer our clients the best of both worlds: they can benefit from our technology and high- quality service safe in the knowledge that they are counterparty to one of the world most important financial institutions,” said Juan Lobato and Salvador García, co-founders of Ebury, in a joint statement. “It is an exciting time for Ebury, we have just completed our first acquisition, and the new capital from Santander and our existing shareholders will allow us to invest in new ways to serve SMEs trading internationally and continue the growth in our business while keeping our entrepreneurial culture.”

Santander is not a stranger to making strategic investments in financial technology startups to grow its business, specifically by integrating or co-marketing those services alongside its own. It made an early strategic investment in Sweden’s iZettle, a Square competitor, that brought the startup into Latin America, and specifically as a co-provider of services to Santander’s customers in the region. Although it looked like iZettle could eventually get gobbled up by Santander, in the end, it was acquired by PayPal for $2.2 billion.

As with the iZettle investment, the focus for Santander here is on providing more services for SMEs, a huge sector that is fragmented and often overlooked and underserved against the bookends of mass-market consumer services and high-touch, high-end large enterprise services. The gap in turn becomes an opportunity.

“Small and medium-sized businesses are a major engine of growth around the world, creating new jobs and contributing up to 60% of total employment and up to 40% of national GDP in emerging economies,” said Ana Botín, Group Executive Chairman of Banco Santander, in a statement. “SMEs are becoming increasingly global and Santander is the best positioned bank to play a leading role to help them access global trade finance. By partnering with Ebury, Santander will deliver faster and more efficient products and services for SMEs, previously only accessible to larger corporates.”

Source. TechCrunch, Ingrid Lunden, November 4, 2019 

 

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Freetrade, the UK challenger stockbroker, completes $15M Series A

FreeTrade the U.K. challenger stockbroker that offers commission-free investing, has closed $15 million in Series A funding. The round includes a $7.5 million investment from Draper Esprit, the U.K. publicly listed venture capital firm, along with previously announced equity crowdfunding via Crowdcube.

The funding will be used by Freetrade for further growth and product development, including “doubling down” on engineering hires. The firm, which claims more than 50,000 customers, is also planning to expand to Europe next year.

In addition, Adam Dodds, CEO and founder of Freetrade, tells me there will be a marketing and content push to help reach more of the challenger stockbroker’s target millennial customers and help educate the market as a whole that investing in the stock market doesn’t have to be prohibitively expensive or complicated.

Amongst a number of new stock trading and investment apps in the U.K., London-based Freetrade was first out of the gate as a bona fide “challenger broker” after deciding early on to build its own brokerage. This included obtaining a full broker license from the FCA, rather than simply partnering with an established broker.

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The Freetrade app lets you invest in stocks and ETFs. Trades are “fee-free” if you are happy for your buy or sell trades to execute at the close of business each day. If you want to execute immediately, the startup charges a low £1 per trade. The idea is to put the heat on the larger incumbents that can charge up to £12 per trade, which is off-putting to people wanting to only invest a small amount or regularly refresh a modestly sized portfolio.

Meanwhile, Dodds says that next on the product roadmap will be a new investment platform that will give users the option to purchase U.K. and European “fractional” shares, not just U.S. ones, which he claims will be a first.

With that said, competition has been steadily increasing since Freetrade set up shop. Silicon Valley’s Robinhood is gearing up for a U.K. launch, having recently received regulatory approval. Bux has also recently launched commission-free trading and now bills itself as a challenger broker just like Freetrade.

Then, of course, there’s Revolut, the fast-growing challenger bank that tentatively launched fee-free stock investing in August.

Noteworthy, André Mohamed, previously CTO and a co-founder of Freetrade, joined Revolut as its new head of Wealth & Trading Product, adding a bit of extra spice to that rivalry. As I wrote at the time, the circumstances that saw Mohamed depart Freetrade remain unclear. According to my sources, his contract was terminated last year and the two parties settled, with Freetrade accepting no liability.

“Freetrade are on a mission to open up investment opportunities for everyone, as are we,” says Simon Cook, CEO of Draper Esprit, in a statement. “In this sense, their mission is totally aligned with our own, as a rare tech-focused VC listed on the stock exchange. The company have shown exceptional growth in the short time since they first launched the platform last year. We could not be more delighted to support Adam, Viktor, Ian and their wider team as they enable Europe’s 100 million millennials to benefit from the world’s economic growth.”

Source. TechCrunch, Steve O'Hear, October 31, 2019

 

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DeadHappy, the UK pay-as-you-go life insurance provider, raises £4M Series A

DeadHappy, a U.K.-based insurtech startup that wants to offer more flexible life insurance and remove the taboo surrounding death, has raised £4 million in Series A funding. Backing comes from e.ventures, alongside the company’s seed investor Octopus Ventures.

Founded in 2017, DeadHappy claims to be the U.K.’s “first fully digital pay-as-you-go life insurance provider.” It offers flexible life insurance policies that are designed to be “cheaper, easier and better” than existing traditional providers. This includes pricing insurance based on your current circumstances and the option to add (or remove) further coverage on a rolling basis.

More broadly, the startup is developing what it calls its “Deathwish” platform, which is something akin to a will. The idea is that you can specify how you wish any future insurance payout to be used, such as paying off your mortgage. And there are also plans to incorporate other wishes not related to finances.

“Our vision is to change attitudes to death and we are tackling that in a number of ways,” DeadHappy co-founder Phil Zeidler tells me. “Despite death being the one certainty humans face, it remains for many a taboo subject, and the failure to talk about it and plan for it is both counterintuitive and leads to significant further trauma at the most difficult of times for family and loved ones.”

Currently the Deathwish platform offers financially motivated Deathwishes, but the longer-term plan is to enable practical Deathwishes, such as making sure your funeral is the way you want it, and what Zeidler calls emotionally motivated Deathwishes.

The idea is to help offer a way to help loved ones “achieve something meaningful in their lives, whether that’s learning how to play the drums or funding an expedition to the Amazon,” he explains.

“Crucially, customers can share these Deathwishes as they choose, which is a practical tool to ensure their wishes are clear and understood. Our platform acts as a catalyst for opening a conversation with loved ones and a place to share recorded video messages and stories.”

Meanwhile, DeadHappy says it will use the new funding for future growth by further building the technology and capabilities of its Deathwish platform. It also plans to expand its product and partnership offerings to major financial service distributors.

Source. TechCrunch, Steve O'Hear, September 27, 2019

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Achilles Therapeutics raises $120M in Series B round for cancer cell therapy

Stevenage, U.K.-based Achilles Therapeutics said Tuesday that it had raised 100 million pounds – equal to about $120 million – in a Series B round, led by RA Capital Management. Founding investor Syncona participated, along with Forbion, Perceptive Advisors and Redmile Group.

The company said proceeds for the round will be used to launch two clinical trials of its product candidates in non-small cell lung cancer and melanoma. Its pipeline page lists multicenter Phase I/IIa studies for both indications. Both trials are listed also on ClinicalTrials.gov, with the page for the NSCLC study stating it is currently open for recruitment.

Achilles’ approach involves personalized T-cell therapies that target clonal neoantigens, which are protein markers unique to each patient that are present on the surface of cancer cells. The starting material for the products, known as clonal neoantigen T cells – or cNeT – consists of T cells isolated from a tumor sample known as tumor-infiltrating lymphocytes, or TILs.

“The Achilles approach integrates years of multi-disciplinary scientific and clinical knowledge from immuno-oncology, cell therapy and genomics with the goal of creating a TIL-based therapeutic enriched with T cells reacting against clonal neoantigens,” RA Capital Management Derek DiRocco said in a statement. “We believe this approach may represent the optimal way to expand the utility of polyclonal TIL therapy to multiple solid tumor types and has the potential to provide profound clinical benefit for patients living with cancer.”

TILs represent one of multiple kinds of cell therapies currently in development for cancers. Another company developing them is Iovance, which said in July that, per discussions with the Food and Drug Administration, it could use data from its Phase II study of a TIL in cervical cancer to seek the agency’s approval.

Other types of cell therapies include T-cell receptors, or TCRs, and chimeric antigen receptor T-cells, or CAR-T. Novartis’ Kymriah (tisagenlecleucel) and Gilead Sciences’ Yescarta (axicabtagene ciloleucel) are CAR-Ts with FDA approval for blood cells, both targeting the CD19 antigen.

Source. Medcity News, Alaric Dearment, September 4, 2019

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