The United Kingdom is launching an investment fund of one billion pounds (about 1.27 billion euros) aimed at investing in start-ups in the fintech sector. Investments will be allocated to growth-stage start-ups (Series C onwards) with a view to their IPO.
The government is backed by several financial institutions, including MasterCard, Barclays and the London Stock Exchange. It aims to make investments between £10m and £100m: from start-ups offering consumer products to financial infrastructure and payment specialists including regtech. The Fintech Growth Fund expects to close its first transaction by the end of the year, CNBC reported.
The ultimate goal is to prevent British-born fintechs, which have the largest number of unicorns in Europe, from going public in the US. For example, like Arm, in another category, semiconductors.
According to Alvolta Partners, the fintech sector has seen a significant drop in funding since the start of the year, around 80% in the first half. Valuations are also falling, a phenomenon affecting big UK fintechs such as Revolut and Checkout.com. So now is a good time to pick up stocks of companies that theoretically have the ability to weather the current turmoil.
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