A banking technology provider backed by Britain’s biggest high street lender will add its name to the list of UK tech “unicorns” in the coming weeks when it completes a £150m fundraising.
Sky News has learnt that ThoughtMachine, which was set up in 2014, is close to concluding a deal that will more double the amount of capital injected into the business since its formation.
Sources said on Wednesday that the company had reached an agreement with Nyca Partners, a New York-based fund that is among its existing investors, to lead its latest funding round.
Image: ThoughtMachine is part owned by Lloyds Banking GroupIn total, ThoughtMachine is likely to raise approximately £150m at a valuation of more than $1bn on both a pre and post-money basis, according to the sources.
The transaction, which will be publicly announced later this autumn, will cement ThoughtMachine’s status among the most valuable British-based fintech companies – a sector which has attracted growing political scrutiny in recent months as ministers seek ways to foment further growth in the sector.
AdvertisementSo far this year, Revolut, the digital bank, has become the most valuable private company in the UK, raising funds at a $33bn valuation.
Others, including Wise, the money transfer service, have listed on the public markets in an attempt to capitalise on booming investor appetite for the industry.
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Lloyds Banking Group has been a shareholder in the company since last year, having signed a deal to become a ThoughtMachine customer in 2019.
Image: ThoughtMachine’s customers include Standard CharteredBanking tech providers such as ThoughtMachine and rivals Temenos and 10x Future Technology have become increasingly valuable as lenders attempt to improve their technology systems to cope with soaring demand for online banking services.
The growing use of cloud-based software is also enabling banks to cut thousands of jobs in previously labour-intensive administrative functions.
ThoughtMachine has previously raised £100m of external capital, and employs more than 500 people in London, Melbourne, New York, Singapore and Sydney.
Its other investors include Draper Esprit, the London-listed venture capital firm, Eurazeo, IQ Capital and Playfair Capital.
The company is run by Paul Taylor, its founder, whose stake is likely to be worth a very significant sum of money after the latest funding round.
A ThoughtMachine spokesperson said: “We can confirm the business is fundraising and will close a significant sum, a testament to our investors’ confidence in the business, and the impact of Vault, our cloud native core banking platform.
“We are thrilled with the overwhelming new and existing investor interest in our business.”
The company declined to comment on the details of the new funding round.
