Banco Santander has paid £350m to snap up a majority stake in British fintech Ebury, as part of plans to expand services to small firms that trade internationally.
The Spanish high street banking giant said it will take a 50.1 per cent stake in the London-based firm, which offers currency services and funding to 43,000 smaller firms.
Ebury, which employs 900 staff across 22 offices in 19 countries, said it processed £16.7bn in payments last year.
Santander added the fintech has “generated consistent average annual revenue growth of 40 per cent in the last three years”.
Engine of growth
The global lender said Ebury will use £70m of the investment to enter new markets in Latin America and Asia.
Santander group executive chairman Ana Botín (pictured) said: “Small and medium-sized [SME] businesses are a major engine of growth around the world, creating new jobs and contributing up to 60 per cent of total employment and up to 40 per cent of national gross domestic product in emerging economies. SMEs are becoming increasingly global and Santander is the best positioned bank to play a leading role to help them access global trade finance.”
Ebury was founded by co-chief executives Juan Lobato and Salvador García in 2009, and up until this investment has raised $134m from early investors who include venture capital group 83 North and Germany-based private equity firm Vitruvian Partners.
Santander said the current management team will remain in place, but added the bank’s Brazil chief executive, Sergio Rial, will join the Ebury board as chairman.
Ebury reported sales of £43.7m in the 12 months to April 2018. It made a pre-tax loss of £19.1m, compared with a profit of £1.1m the previous year.
“Combining a big bank with nimble fintech means we can offer our clients the best of both worlds: they can benefit from our technology and high-quality service safe in the knowledge that they are counterparty to one of the world most important financial institutions,” said Ebury’s Lobato and García in a joint statement.
A range of fintech firms have grown up since the 2008 financial crisis, offering finance to smaller firms, as high street banks withdrew from this area, fearing losses. Consumers have been attracted to these platforms by a mixture of low charges and higher customer service standards.
High street banks have scrabbled to catch up by launching their own fintech arms, buying rivals, or both.