In preparation for an imminent period of interest rate hikes, Fintel – SimplyBiz’s parent company – has set aside £100m for making acquisitions in the fintech-advice industry.
Phil Smith, who has been chair of Fintel since May, revealed that 12 deals are in the pipeline.
Fintel aims to acquire startups within the advisory sector, focusing on areas such as research, hybrid advice, and cash management. Notably, recent transactions include acquisitions of Competent Adviser, an advice education company, and Micap, a research firm specialising in enterprise investment schemes and venture capital trusts. Additionally, Fintel secured a 25% stake in Plannr, a provider of adviser customer relationship management (CRM) services.
Fintel’s acquisition drive will pass down to its subsidiaries Simply Biz and Defaqto, which will now ‘put its foot on the gas’ on their own external growth.
Mr Smith commented: “[This year] is the optimal window for acquiring and developing fintech capabilities,’ Smith said. ‘What we saw in 2021 and 2022 was there was a lot of cheap capital coming into the fintech space from private equity and venture capital money.
“That money has gone away, so the market for capital for these businesses is tight and they don’t have the distribution power to break even. There are a hell of a lot of great fintech startups that are under massive pressure, and that has created opportunities.”
Fintel has raised the £100m through its cash resources and its banks’ debt facility. Fintel’s strategy aims to take a significant stake at first and incrementally increase its ownership stake, until it reaches full ownership status.
“Everything we invest into we see as a long-term need in our marketplace,” continued Mr Smith.
“This is not a fund. This is about buying and proving new technology that we think can be central to the adviser community in five years’ time. Plannr is a great example. Tech in CRM providers is very old and there isn’t yet a credible alternative to them. We think Plannr will be that credible alternative.”
The fintech-advisory firms that Fintel acquires will be accessible to SimplyBiz’s network of adviser firms at a lower cost.
Gunner & Co. specialise in IFA sales, IFA business sales, retiring IFAs and IFA client bank sales
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