Two of the UK’s leading financial technology companies, Moneybox and GoCardless, are advancing with secondary share sales, allowing existing investors to partially liquidate their stakes while attracting new investors. Moneybox, a savings and investment app, and GoCardless, a payment platform, are following in the footsteps of other fintech firms like Monzo and Revolut. This move reflects a growing trend in the fintech sector, where secondary share sales are becoming an attractive option for both investors and companies.
Why Are Fintech Firms Opting for Secondary Sales?
Secondary sales in startups offer an opportunity for original investors to gain liquidity while potentially bringing new investors on board. Moneybox, for instance, has nearly doubled its valuation to £550 million following a £70 million investment from Apis Global Growth Fund III and Amundi. These investments will predominantly occur through secondary share sales, with existing investors selling 10-15% of the current share capital. This strategy allows Moneybox’s shareholders, including employees and crowdfund investors, to sell 10% of their holdings.
What Are the Implications of These Sales?
The implications of these secondary sales are multifaceted. On the one hand, they provide liquidity to early investors, enabling them to realize some returns on their investments. On the other hand, the influx of new investors can bolster the company’s capital base, allowing for further growth and expansion. For Moneybox, which reported a pre-tax profit of £27 million for the year ending in May 2024, this move comes at a time of significant financial improvement.
In comparison to past reports, Moneybox’s decision to engage in a secondary share sale marks a turning point from its previous financial strategies. While secondary sales were once considered a rarity in the fintech space, they are becoming more common as companies look for flexible funding options and liquidity for their shareholders. Moneybox’s evolution reflects this broader industry trend.
GoCardless, valued at around $2 billion in 2022, is also preparing a secondary share sale. It has been reported that its employees could receive a windfall exceeding £100 million from this sale. Sources indicate that up to $200 million in stock may change hands, although GoCardless has not commented on these developments. The company’s established investors include Accel, Balderton, and Notion Capital.
Ben Stanway, Moneybox co-founder and executive chair, stated, “We want to enable our shareholder community to realize some of the value of their investment at this important juncture.”
This statement underlines the intention behind the share sale, focusing on providing a return to long-term supporters and employees.
As the fintech landscape evolves, secondary share sales are anticipated to become an integral part of the financial strategies of startups. They offer a balance between liquidity for existing investors and opportunities for new capital infusion. For companies like Moneybox and GoCardless, these sales are not just financial maneuvers but strategic decisions that could shape their future trajectories, reflecting a shift in how fintech companies manage investments and growth.
