Newly licensed UK bank Cashplus is raising £50m

Written by Ruby Hinchliffe
19th February 2021

Cashplus, a UK-based challenger which landed a full UK banking licence earlier this month, is in the swings of a £50 million funding round. The fintech’s CEO, Rich Wagner, tells Reuters the company’s board approved fundraising plans at the end of last week.

The fresh capital, which it intends to raise from growth investment firms, will fund its loans to consumers and small businesses under its new licence.

“The credit profile of our customers is quite unique,” says Cashplus CEO

It would mark the 2005-founded company’s first group outside investment, having relied on its main shareholder Trident Capital, a California-based private equity firm. To date, it’s plugged £20 million into Cashplus.

Also this week, the fintech appointed Mark Sismey-Durrant as its new chairman. Previously chief executive of Sun Bank, Heritable Bank and most recently Hampshire Trust Bank, Sismey-Durrant succeeds Jim Jones.

Cashplus’ portfolio

The UK fintech wants to deliver £1 billion of new loans within the next five years. So far, it’s lent £640 million and has operated on a profit for nine straight years.

Cashplus claims to serve more than one million customers and hold half a billion in safeguarded funds. It clocked a revenue of £50 million last year.

Around half of its revenue came from its business arm, which currently holds 150,000 customers, according to Sifted.

“The credit profile of our customers is quite unique,” Wagner tells Reuters. “We are seeing individual directors who are formulating business ideas as a contingency against losing their job. Start-ups are already at record highs and we expect they will grow from there.”

Last month, Cashplus bought the 5,000-customer-strong portfolio of Manchester-based firm, icount.

The deal marked one of the first fintech acquisitions of 2021. The value of the deal remains undisclosed.

It also saw Cashplus take on £2 million-worth of monthly customer transactions.

A spokesperson for the company tells FinTech Futures that Cashplus will continue to consider growing via organic channels, and acquisitions like that of icount.

A rival for Starling?

Now armed with this full banking licence, Cashplus can offer cheaper lending by loaning its £500 million of deposits.

It claims to have more than one million customers, which consists of retail consumers and business customers. It intends to turbocharge lending, and has become one to watch for Starling Bank, which made a profit last October of £800,000.

Comparably, Starling claims around two million customers, 300,000 of which are businesses.

In October, its gross lending sat at around £1.5 billion, thanks to the Bounce Back Business Loan Scheme (BBLS). Its customer deposits sat at £4 billion – eight times Cashplus’ deposits.

Whilst Starling is in the lead on every vertical but profit – which it’s planning to temporarily solve with a £200 million capital raise – Cashplus is in a stronger position to start challenging this state of play.