UK fintechs raise money despite Brexit uncertainty

REUTERS/Neil Hall

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Three UK fintechs announced funding rounds totaling £15 million ($19 million) this week, amidst uncertainty across the financial services industry caused by Brexit.

• Revolut. The travel money app, which said in April that it was looking to raise £10 million ($13 million), announced it raised £6.75 million ($8.69 million) from investors at a valuation of £42 million ($54 million) in a round that closed last week. It plans to raise a further £1 million ($1.3 million) via crowdfunding platform Crowdcube. The firm said the decision to raise less money was due to "optimising on valuation and dilution," and its next priority is to launch a version of its product for businesses. 
• WeSwap. The travel money firm, which offers users a prepaid card and app, raised £6.5 million ($8.4 million). WeSwap uses a hybrid model to offer users currency exchange for a fee of 1%, compared to the 3% typically charged by legacy firms. When possible, WeSwap passes the currency one user is selling directly to another user looking to buy. If demand outstrips supply, WeSwap buys the currency from FX providers — which it says it can afford because it has lower overhead than legacy exchange firms. 
• Moneybox. The savings app, which is not live yet, rounds up spare change from card purchases and invests it according to a user's risk preference. It raised £1.4 million ($1.8 million) on top of the £2 million ($3 million) it raised in January. The app plans to launch in August.

It's likely that these fintechs started negotiations for funding before the UK voted to leave the EU, and we don't know if they'd have the same success in today's post-Brexit environment. That said, the idea of Brexit didn't put investors off so much that they pulled out. This is in part due to the fact that it will take at least two years for the UK to formally exit the EU, during which time nothing will change regarding firms' access to the EU market or the regulation they must abide by. Additionally, some business ideas promise so much value to the market that it outweighs the risk of changing regulation from an investor perspective.

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