TruFin steps into UK challenger bank zone
UK challenger bank TruFin is now up and running, and has started trading on the alternative investment market (AIM) of the London Stock Exchange.
The bank, a creation of independent AIM firm Arrowgrass, has conducted a conditional placing and subscription of ordinary shares to raise around £70 million in funding.
TruFin is a holding company comprising three fintech and banking businesses – Distribution Finance Capital (DFC – supply chain finance), Satago (invoice finance) and Oxygen Finance (dynamic discounting).
Henry Kenner, CEO of TruFin, says listing on AIM will allow it to “provide further capital to our subsidiaries and scale faster, and take advantage of any developments in the current financial services market”.
To give you some background, the bank was established through a series of acquisitions and investments by Arrowgrass between 2014 and 2017. TruFin currently has 100 employees, and offices predominantly in the UK and a small team in the US.
In addition, TruFin owns a c. 15% minority stake in Zopa, a UK consumer P2P lender, which operates independently. DFC and Zopa are pursuing UK banking licences.
In 2013, Arrowgrass says it became interested in P2P lending platforms as these were “reliable originators of high-yielding assets”.
This led to the formation of the alternative finance team led by James van den Bergh and their first investment, Zopa. Kenner, co-founder and CEO of Arrowgrass, joined the team in 2015, leading it with van den Bergh.
In connection with the IPO, Kenner, van den Bergh and “certain other members” of the management team have left Arrowgrass to become employees of TruFin.
The team behind TruFin have plenty of experience (and no doubt, connections).
Kenner has 30 years of investment banking and capital markets experience. Such as Deutsche Bank, Swiss Re Capital Management and ABN Amro.
Van den Bergh has a bit less, with over 16 years’ experience. He’s worked at Merrill Lynch, SAC Capital Advisors, Walter Capital Management and Ivaldi Capital.
In terms of Arrowgrass. It first invested in Zopa in January 2014. In February 2016, Arrowgrass added Oxygen Finance to its portfolio. Arrowgrass funded the incorporation of DFC in May 2016 and DFC commenced lending in March 2017. In February 2017, Arrowgrass acquired Satago, an SME cash flow management platform.
In November 2017, Arrowgrass incorporated TruFin as a wholly-owned subsidiary, and in December 2017, Arrowgrass transferred its fintech and banking assets to a subsidiary of TruFin.
View our comprehensive list of UK challenger banks and their tech here.