News Briefing - Crowdfunding, SME And Alternative Finance

Storm In A Teacup by JBraine

1.UK – FinTech


 Crowdfundinsider reports: 

“ARA Venn, a specialist investment manager of private debt in the residential sector, has “completed a fund-raise of up to £280m to invest in home-finance plans” to be originated by StrideUp, a digital home finance group that is “co-owned by ARA Venn.” 

Over the past decade, house price growth has “outstripped income growth, meaning that the average house price to income ratio for first-time buyers in the UK now stands at 6.91.” 

However, the vast majority of traditional mortgage lending “is capped by regulation at a loan to income ratio of 4.5, which puts home-ownership out of reach for huge swathes of the market.” 


2. UK – FinTech 


Altfi reports: 

“Five years after launching publicly, Starling Bank has reached a milestone of three million current accounts. 

In the last 18 months, the bank has added one million users, secured more than £300m in funding, won best British bank for the fourth time at the British Bank Awards, developed a bank card for children, and that’s just the start. 

It has also reached more than 460,000 small business accounts, with its business current accounts now comprising 8 per cent of the UK SME banking market. 

“Starling has proven that technology can transform the banking experience and we’ve attracted millions of customers as a result,” Starling chief banking officer Helen Bierton said. 

“Our technology platform was built to scale, so as we continue to launch industry-first products and features, we’re ready to onboard many more customers - and at pace.” 

Headed up by CEO Anne Boden, Starling Bank became a unicorn fintech at long last after a successful period over the pandemic, and a surprise £272m Series D funding round. 

Data from the current account switching service showed the bank gained the most net switches last year of all banks in the UK.” 


3. UK – FinTech 


Finextra reports: 

“The Financial Conduct Authority has launched a study into the use of algorithmically generated synthetic data and its potential for safely opening data sharing between firms, regulators and other public bodies. 

The regulator has released a call for input from stakeholders to better understand different market participants views' on the extent to which synthetic data can expand data access and data sharing opportunities in an increasingly digital market

"Increasingly, innovation within financial services is data-driven, requiring large volumes of high-quality data to develop and train accurate, effective models and systems," says the wathdog. "However, financial data - such as consumer transaction records, account payments, or trading data - is sensitive personal data subject to data protection obligations, as well as often being commercially sensitive. This is where we believe synthetic data can help."

The study will also evaluate the maturity of synthetic data usage within financial services, and the extent to which both regulated and unregulated firms are using it.” 


4. UK - FinTech 

Altfi reports: 


HSBC UK is launching a new ‘Growth Lending’ fund for high-growth tech businesses in the UK following the government’s calls for more investment in the sector last week. 

The £250m fund is designed to support “well-equitised, high growth, loss-making scale-ups” that are earlier on in their growth journey. 

Businesses will get access to both funding and the bank’s international expertise to help reach their global ambitions. 

The fund also includes a commitment to improving the tech ecosystem to ensure the UK remains one of the best places to start and run technology businesses, the bank said. 

“The Government’s vision for harnessing digital transformation and making the UK the best place to start and run an ambitious digital technology business is aligned with our mission to support ambitious tech businesses,” HSBC UK head of tech Roland Emmans said. 

“Growth Lending is for businesses who want to become global tech players by working with a global bank. 

“This is an ideal option for high-growth tech scale-ups, who are supported by a strong equity backing, have a proven sales track record, and a clear path to profitability.” 

The new fund will give access to up to £15m in financing to support scale-ups, targeting IP and technology-rich businesses in cloud or software, from healthtech to edtech, fintech or beyond. 

As part of its credit underwriting process, HSBC UK is working with specialist IP services firm Inngot to identify and value prospects’ IP and intangible assets.” 


5. International – FinTech 

Altfi reports: 

“The Bank for International Settlements (BIS) has said that cryptocurrencies have deeper structural inadequacies that have been demonstrated amid the current market turmoil impacting the space. 

The combined value of cryptocurrencies has dropped around $350 billion over the past two weeks, and many significant firms in the industry such as Coinbase have made cuts to staff in recent months. 

The organisation highlighted a variety of issues in its Annual Economic report, including “unregulated or non-compliant intermediaries” as well as “structural limitations that prevent such currencies from scaling”. 

The BIS acknowledged some benefits of cryptocurrencies including “innovations such as the ability to program payments”, however it concluded that “they cannot fulfill the high-level requirements, such as safety, accountability, efficiency, inclusion and openness, for a usable digital monetary system”. 

As an alternative, the BIS said a “digital version of money issued by the central bank could provide for many of the same features offered by cryptocurrencies and stablecoins”. This is commonly known as a Central Bank Digital Currency (CBDC). 

The BIS said this CBDC could “be built on a sound nominal anchor and avoid the structural limitations and risks of crypto, which include congestion, high fees, fragmentation and pseudo-anonymity, characteristics that can also facilitate abuse and illicit activity”.”