Lloyds Bank has terminated its partnership with FinTech Satago just two years into a five-year agreement.
Lloyds partnered with the startup in 2022 to help its SME customers get access to cash against invoices due, investing £5 million into the company in exchange for a 20% equity stake.
London-based Satago – led by CEO Sinead McHale – is a cash management platform that provides automated credit control, risk management and invoice finance to SMEs and accountants.
Following an internal review, Lloyds has given notice to terminate the five-year commercial agreement to license its software platform.
“The bank has decided to no longer prioritise the Satago platform and exercise its right to terminate the contract,” Satago investor TruFin revealed in a notice to the London Stock Exchange.
“Satago will continue to service, support and meet the needs of those businesses which are currently using the platform as required.”
Ben Stephenson, the bank’s representative on the board of Satago, will step down with immediate effect.
“The board of TruFin believes that this decision is not a reflection of the quality or robustness of the Satago platform,” continued the notice.
“It continues to believe in Satago’s ability to generate significant value through its lending-as-a-service embedded finance strategy, underscored by its ongoing successful partnerships with Sage and the Bank of Ireland, and its continued progression of a significant pipeline of other tier 1 banks and specialist lenders.”
Gwynne Master, MD of working capital at Lloyds Bank Commercial Banking, said in 2022: “Our partnership with Satago goes beyond a supplier-buyer relationship.
“The equity stake we have taken in the business underscores our commitment to deliver best-in-class, future-focused solutions for UK businesses by partnering with a market-leading provider with proven capability.”