The UK fintech sector is on a little bit of roll. Allica Financial institution – a London-based fintech – just lately introduced it had doubled its profits in 2024, bringing in £29.9 million, whereas Neobank Revolut introduced a £1bn revenue in 2024. Firms of this nature proceed to spring out of London, a metropolis which has turn into a fintech world chief, partly due to its lengthy monetary heritage but in addition as a result of it was a pioneer of Open Banking. There are actually over 185 UK fintech startups valued over £1 billion, in accordance with analysis from HSBC Innovation Banking.
So it’s with that context that Volution, a UK-based VC investing in FinTech, AI, and SaaS startups, has launched a brand new $100 million fund.
Launched in partnership with Japanese VC buyers, SBI Funding Co., this shall be Volution’s second devoted fund following its first, which got here in at $30 million.
Volution mentioned a “important quantity” of Volution’s present LPs recommitted to the brand new fund.
Volution mentioned it could goal at firms which have already established income streams however which require extra capital.
James Codling, Managing Associate at Volution, informed TechCrunch that whereas UK Authorities is targeted on productiveness and progress there’s a structural funding problem, with early-stage funding evaporating submit Collection A. He mentioned they’re out to fund firms with product-market match and a strong go-to-market technique
“We again firms which might be sometimes wherever between 5 million in income and as much as 20. That’s a badly wanted half available in the market on the minute, and it’s turn into more and more so given what occurred within the correction within the enterprise markets 2021-22. There’s an terrible lot of funds on the market which might be struggling to boost new capital and making an attempt to cope with points that they’ve already obtained inside their portfolio.”
Earlier firms Volution has backed embody Sign AI, Flagstone, Cognism, and Zopa Financial institution. The earlier fund had three exits.
In a press release, Tomoyuki Nii, a director at SBI Funding, mentioned: “The UK is a worldwide chief in FinTech and AI, with world-class universities, a robust regulatory atmosphere, and a thriving entrepreneurial ecosystem. These strengths make it a lovely vacation spot for funding. Our cornerstone dedication to Volution comes at a time when Japan and the UK authorities are strengthening financial ties to drive progress throughout each markets.”
Volution can be operating an ESG-focused “Carbon Carry” initiative designed to encourage accountable and sustainable progress throughout its portfolio.
Though Fintech is doing nicely, the UK expertise sector has confronted a downturn with funding at Series A dropping by 44% in 2024 in comparison with the earlier yr, and Collection B conversion charges plummeting by over 50% within the final 5 years.