Manchester-based FinTech BankiFi has raised £2.2 million in funding.
The startup specialises in payment processing and financial administration services for SMEs.
The investment round was led by Praetura Ventures, with participation from the Greater Manchester Combined Authority (GMCA).
BankiFi was founded to help financial institutions better serve small and medium-sized businesses. The firm’s technology equips banks to take on challengers and provide more agile customer-led services to SMEs, as opposed to more traditional product-led offerings.
It enables banks to provide a set of integrated services, including invoicing, payments, cash management and accounting, which are designed to help businesses reduce time spent on financial administration.
“SMEs and early-stage innovators are a vital pillar of our economy and will play an important role in the UK’s post-pandemic recovery, but many continue to be hampered by inadequate banking services,” said founder and CEO Mark Hartley.
“BankiFi want to change that by putting banks at the heart of businesses’ day-to-day needs. Before the pandemic, invoice cycles took a month on average, meaning most businesses didn’t get paid for their services or products for more than 50 days.
“That delay has now increased to more than 70 days, putting immense pressure on the cashflow of many SMEs.”
According to McKinsey, late payments owed to individual SMEs stand at more than £6,000 on average, according to research from the Federation of Small Businesses.
“The good news is that banks are beginning to see the sizeable opportunity to tap into this under-served market,” added Hartley. “Our software allows them to offer advanced services to SMEs, and we’re seeing a real uptick in demand for our products as banks look to compete in this space.
“The Praetura Ventures team has deep sector insight with a track record of scaling FinTech businesses, which we believe will be crucial in helping us grow our business.”
Hartley previously scaled payments technology provider Clear2Pay, which was sold to FIS for circa €375m in 2014. BankiFi’s CFO is Chris Fry, who was previously a partner at KPMG.
Praetura Ventures invested £1.5m while an additional £700k comes from GMCA. The new funding will allow BankiFi to expand its product and service offering, grow its client base and target new domestic and overseas markets.
David Foreman, MD at Praetura – who contributed the Insights piece above – said: “The UK is Europe’s established leader in FinTech, and the sector will play an important role in the future of the UK economy.
“The global market is forecast to almost triple in size to £380bn by 2030, so there’s a clear opportunity for innovative businesses like BankiFi to scale up. It’s such an exciting sector that we’re always looking to invest in.
“Since we first met Bankifi, we’ve been so impressed with the founding team’s passion, knowledge and track history in FinTech. Their focus on growing the business in the North of England and delivering something revolutionary to the region dovetails perfectly with our own mission.”