UK FinTech startup BankiFi secured £2.2m to expand its services for SMEs

By Gaia Lamperti

Time for another UK challenger FinTech to get off the ground: the startup BankiFi has raised £2.2 million in a funding round led by Praetura Ventures alongside participation from the Greater Manchester Combined Authority (GMCA).

The Manchester-based FinTech specialises in payment processing and financial administration services for SMEs and was founded to help financial institutions better serve small businesses by providing agile customer-led services, as opposed to more traditional product-led offerings.

BankiFi applies Open Banking technology to a set of integrated services, such as invoicing, payments, cash management and accounting, helping 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. He explained that, before the pandemic, invoice cycles took a month on average, but now the delay has increased to more than 70 days, putting immense pressure on the cash flow of many SMEs.

According to research by McKinsey, late payments owed to individual SMEs stand at more than £6,000 on average. The report also estimated that about 74% of an SME’s time is spent on ‘non-core activities’ including time-consuming administrative tasks. “BankiFi want to change that by putting banks at the heart of businesses’ day-to-day needs. 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,” Hartley commented.

“The good news,” he continued, “is that banks are beginning to see the sizeable opportunity to tap into this under-served market. 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.”

After receiving backing from Nationwide Building Society in November 2019, the firm will invest the new funding in the expansion of its product and service offering, grow its client base and target new domestic and overseas markets.

David Foreman, Managing Director at Praetura Ventures, which led the funding round, said: “The UK is Europe’s established leader in FinTech, and the sector will play an important role in 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.”

Councillor David Molyneux, GMCA lead for investment and resources, said: “This investment will boost the services BankiFi is already providing and assist in achieving its ambitious global ambitions. COVID-19 has amplified the importance of helping micro and small businesses reduce time spent on administration rather than doing the job, and BankiFi’s products will be invaluable for fulfilling the post-pandemic opportunities for businesses. This is a great example of how business, private investors and GMCA can work together to support our burgeoning technology sector.”