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Volution doubles-down on booming UK fintech with new $100M fund
Volution has launched a $100M fund targeting UK fintech firms established with revenue streams. The UK fintech sector is thriving, driven by successful companies like Allica Bank and Revolut. However, funding challenges persist post-Series A, prompting Volution to focus on firms needing capital for growth, amidst a backdrop of declining early-stage funding in the tech sector.
Key points
- UK fintech sector is booming with notable companies achieving significant profits.
- Volution launched a $100M fund with Japanese partner SBI Investment Co.
- This is Volution's second fund, aiming to support companies with existing revenue.
- James Codling highlights the need for funding due to a reduction in early-stage investments since the venture market correction of 2021-22.
- Volution's previous fund had three successful exits, indicating investor confidence.
- The tech sector faces a 44% drop in Series A funding in 2024, and Series B conversion rates down by over 50% in five years.
Why it matters
- The rise of UK fintech parallels trends in global fintech growth and innovation.
- The push for open banking has been a significant factor in the success of UK fintech companies.
- In 2023-2025, many investors are increasingly focusing on established revenue-generating startups amid tightening funding conditions.
Volution's new fund reflects confidence in the UK fintech market's potential, even as early-stage funding challenges persist, indicating a strategic shift towards companies ready for growth amidst ongoing economic adjustments.