Italy’s largest investment bank pledges to back UK fintech startups

London-based startup accelerator Founders Factory has gained a new partner in the form of Mediobanca. The Milan-based investment bank is looking to increase its presence in the UK, and has pledged €12mn to the joint venture. 

Specifically, Mediobanca will be looking to back as many as 35 fintech startups that focus on technologies such as blockchain and artificial intelligence over the coming five years. However, it will also include early stage fintech startups in other parts of Europe. 

Founders Factory, co-founded by Brent Hoberman, Henry Lane Fox, and George Northcott in 2015, has thus far supported over 300 companies globally through its Venture Studio and Accelerator. The company says it is currently investing in fintech, health, climate, media and telecoms, consumer, and Web3. 

“Combining our venture-building capabilities and fintech experience with Mediobanca’s heritage, financial prowess, and global ambition creates a powerful platform to back fintech founders,” Henry Lane Fox, Founders Factory’s CEO, said in a statement announcing the collaboration. 

Among the fintech startups Founders Factory has backed thus far are climate risk modelling software company Dovetail, AI-powered commercial real estate investment tool Built AI, landlord accounting software Hammock, and end-to-end mortgage platform Acre. 

Hope for a faltering UK fintech investment climate?

Fintech has traditionally been one of the UK’s most successful tech sectors. In 2021, it saw record investments of $13.5bn (approx. €12.2bn). Despite a global downturn, it also fared fairly well throughout 2022, with investments dropping only 8% compared to the year prior.

However, a cautious climate throughout H1 2023 has meant that UK fintech has experienced a drop by as much as 37% from the second half of the year prior. What’s even more disconcerting is that the majority of deals took place in the first quarter. 

Mediobanca is Italy’s largest investment bank. Other than Milan, the company has offices in Frankfurt, London, Madrid, Luxembourg, New York, and Paris. Under a new strategy, Mediobanca is looking to expand its portfolio. In May this year, the investment bank acquired UK-based “financial advisors to the digital economy” Arma Partners, with an annual revenue of over $100bn (€90bn). 

While €12mn might not be a huge drop in the venture ocean, Mediobanca’s push towards diversification may be something of a lifeboat for the fintech ecosystem.