FinTechs In a Hurry To Launch IPOs

There’s a lot going on in our sector just now, with a rush of FinTech companies on both sides of the Atlantic seeking IPOs.

FaizPay, a company offering a truly multi-channel fast and fair payments service that’s built on Open Banking rails, has secured 87% or £526,958 of its fundraising target of £600,001 from 79 investors (at the time of writing) via a securities offering on Seedrs. As of July 4, 2021, there are 34 days left in the company’s sale.

With business offices in London, FaizPay focuses on the Finance & Payments sectors (Digital Mixed B2B/B2C). Incorporated in December 2019, the company reports a £4.5M pre-money valuation, and it’s offering 11.75% equity along with EIS and tax relief.

Here are the main business highlights shared by the company:

  • Integrated with Open Bankingincl the 9 biggest UK banks
  • Native API integrations with Monzo, Revolut & Starling
  • We are authorized & regulated by the FCA (#934835)
  • Testing the solutions with the first few clients

The queue of fintechs hoping to reach the public market in the coming weeks and months is… extensive.

  • Wise just published its prospectus ahead of a 7 July London direct listing,
  • Robinhood filed its IPO paperwork on Friday to join the NASDAQ later this year,
  • eToro’s SPAC merger is on track for Q4,
  • LendInvest is said to be preparing to file its London IPO paperwork any day now,
  • And that’s not to mention Klarna, Checkout.com, WorldRemit, Trustly and Allfunds, all reportedly weighing up listings…

Quite a busy time for the army of investment bankers, lawyers and management teams who’ll be shepherding this herd of fintechs.

Their excitement is understandable.

After years of ‘challenging’ market conditions, investors on both sides of the Atlantic have demonstrated their appetite for higher-risk, even lossmaking fintechs.

The warm reception of PensionBee in London and Marqeta in New York, both of which are bobbing at or around their offer price, is certainly a reassuring sign.

Then there’s the stellar performance of listed fintech investors like Chrysalis Investments (up over 105 per cent YoY), Augmentum Fintech (up nearly 30 per cent YoY) and Draper Esprit (up over 100 per cent YoY).

Contrast that with the last time LendInvest considered listing in 2019, no-deal Brexit fears gripped the market while industry peer Funding Circle had seen its shares sink 74 per cent since its IPO the previous year.

Historical Performance And IFISA Process Guide

  • Money&Co. lenders have achieved an average return of more than 8 per cent gross (before we deduct our one per cent fee). 

That figure is the result of over £24 million of loans facilitated on the site, as we bring individuals looking for a good return on capital together with carefully vetted small companies seeking funds for growth. Bear in mind that lenders’ capital is at risk. Read warnings on site before committing capital.

  • Money&Co. has been lending for over 5 years and has only had two bad debts so far, representing a bad debt rate of 0.03 per cent per annum.

All loans on site are eligible to be held in a Money&Co. Innovative Finance Individual Savings Account (IFISA), up to the annual ISA limit of £20,000. Such loans offer lenders tax-free income. Our offering is an Innovative Finance ISA (IFISA) that can hold the peer-to-peer (P2P) business loans that Money&Co. facilitates. For the purposes of this article, the terms ISA and IFISA are interchangeable.

So here’s our guide to the process:

  • Step 1: Register as a lender. Go to the login page, and go through the process that the law requires us to effect. This means we have to do basic checks on you to comply with money-laundering and other security requirements.
  • Step 2: Put money into your account. This is best done by electronic transfer. We can also process paper cheques drawn in favour of Denmark Square Limited, the parent company of Money&Co.
  • Step 3: Buy loans in the loan market. Once you’ve put cash in your account it will sit there – and it won’t earn interest until you’ve bought a piece of a loan. It’s this final step that requires lenders and IFISA investors to be pro-active. Just choose some loans – all loans on the Money&Co. site can be held in an IFISA – and your money will start earning tax-free interest.

The ISA allowance for 2020/21 is unchanged from last tax year at £20,000, allowing a married couple to put £40,000 into a tax-free environment. Over three years, an investment of this scale in two Money&Co. Innovative Finance ISAs would generate £8,400 of income completely free of tax. We’re assuming a 7 per cent return, net of charges and free of tax here.

Once you have made your initial commitment, you might then consider diversifying – buying a spread of loans. To do this, you can go into the “loans for sale” market. All loans bought in this market also qualify for IFISA tax benefits.

Risk: Security, Access, Yield

Do consider not just the return, but the security and the ease of access to your investment. We write regularly about these three key factors. Here’s one of several earlier articles on security, access and yield.


Tags: Altfi, FinTech, IPO

FOLLOW MONEY&CO. ON TWITTER

Search blog

You may put double quotes around your search to search for literals. Max. 4 words inside quotes (dashed words count as one word).

Allowed symbols: " ' & -

More from blog

Disclaimer: Money&Co.™ is the trading name of Denmark Square Limited, Company Number 08561817, registered in England & Wales, authorised and regulated by the Financial Conduct Authority (FCA). The company is identified on the Financial Services Register under Reference Number 727325. The registered office is 58 Glentham Road, Barnes, London, SW13 9JJ where the register of Directors may be inspected. Denmark Square Limited (ISA manager reference number Z1932) manages the Money&Co. Innovative Finance ISA.