Italian investment bank supports UK fintech startups.

Italian investment bank supports UK fintech startups.

Mediobanca Partners with Founders Factory to Boost UK Fintech Sector

London-based startup accelerator Founders Factory has gained a new partner in the form of Mediobanca, a Milan-based investment bank. Mediobanca aims to increase its presence in the UK and has pledged €12mn to the joint venture. This partnership will focus on backing fintech startups, particularly those working with technologies such as blockchain and artificial intelligence. Founders Factory, founded in 2015 by Brent Hoberman, Henry Lane Fox, and George Northcott, has already supported over 300 companies globally in various sectors, including fintech, health, climate, media, and telecoms.

“Combining our venture-building capabilities and fintech experience with Mediobanca’s heritage, financial prowess, and global ambition creates a powerful platform to back fintech founders,” said Henry Lane Fox, CEO of Founders Factory.

Mediobanca’s Strategic Expansion

The collaboration between Founders Factory and Mediobanca offers hope to the faltering UK fintech investment climate. Despite a global downturn, the UK fintech sector saw record investments of $13.5bn (approximately €12.2bn) in 2021. Throughout 2022, investments dropped by only 8% compared to the previous year. However, the first half of 2023 has experienced a cautious climate, resulting in a significant 37% drop in UK fintech investments compared to the latter half of 2022.

Mediobanca, as Italy’s largest investment bank, aims to expand its portfolio through strategic partnerships. In May this year, the bank acquired Arma Partners, a UK-based “financial advisors to the digital economy” with an impressive annual revenue of over $100bn (€90bn). By forming a collaboration with Founders Factory, and specifically focusing on supporting fintech startups, Mediobanca is showcasing its commitment to diversifying its investments and bolstering the fintech ecosystem.

Supporting Innovation in Fintech

Founders Factory’s track record in backing successful fintech startups is impressive. Among the companies it has supported are Dovetail, a climate risk modelling software company, Built AI, an AI-powered commercial real estate investment tool, Hammock, a landlord accounting software, and Acre, an end-to-end mortgage platform. This success is a testament to Founders Factory’s expertise in nurturing startups and driving innovation.

With the financial backing of Mediobanca, Founders Factory will be able to offer even more support to fintech founders. The €12mn investment will empower the accelerator to fund up to 35 fintech startups over the next five years. While this may not sound substantial in the grand scheme of the venture capital landscape, it represents a crucial boost to the UK fintech sector, especially in challenging times.

Conclusion

The partnership between Founders Factory and Mediobanca comes at a critical time for the UK fintech sector. With a recent decline in investments, this collaboration brings hope and potential opportunities for fintech startups. Mediobanca’s commitment to diversifying its portfolio and Founders Factory’s proven success in supporting innovative companies create a strong platform for fintech founders to thrive.

As the fintech industry continues to evolve, the role of accelerators and investment banks in providing the necessary resources and expertise becomes increasingly important. Together, Founders Factory and Mediobanca are poised to make a significant impact in the world of fintech and contribute to the growth and success of the UK’s tech ecosystem.