Uncapped lands $80m from Spotify investor Lakestar to offer startups wider banking services

UK-based firm which provides funding to startups without taking equity Uncapped raised an $80m funding round to launch a suite of banking services tailored for tech-driven companies.

Led by Lakestar, the round included Uncapped’s previous investors namely All Iron Ventures, White Star Capital, Global Founders Capital and Mouro Capital.

The company plans to use the cash to move into the banking space with new products and services. Additionally, the startup plans to extend the model of giving companies a way to get their revenue upfront not just to SaaS companies but also to the sector of e-commerce.

The latest round comes after Uncapped raised $26m from backers including Santander’s Mouro Capital, Global Founders Capital and White Star Capital.

Founded in 2019, Uncapped is an alternative to traditional debt financing and venture capital providing companies with growth finance for a flat fee which goes down to 6% and fast-released capital. Currently, it lends working capital to businesses with at least six months of trading activity and revenues of at least £10,000/month. Repayments are based on revenue and the cash comes with a flat fee which doesn’t compound. There are no credit checks or business plans required.

The firm initially offered financing of up to £2m ($2.8m) – a figure that now expanded to £5m ($7m).

While it initially started as a pure lending business, the firm has expanded its offering to help startups more through offering automation, specific banking services and other tools to make building their business more efficient.

In 2021, the company began issuing Visa cards allowing its customers to access their cash faster, a project the company says will also be expanded further.

Commenting on the firm’s key goals, Uncapped co-founder Piotr Pisarz said, “Digital companies are innovating and evolving faster than ever before, but their legacy banking providers are not keeping up with the pace. We want to help digital entrepreneurs with quick access to funding, insights that help their business grow, rewards they actually care about and modern integrations that will save them time and money.”

Building on the lack of capital services for startups, Uncapped co-founder Asher Ismail added, “The reality is that legacy banks don’t really understand the needs of digital entrepreneurs and their dated infrastructure is not up to the standards required to help their business grow. So it’s no surprise that 82% of business owners say they are unhappy with their bank. This is a huge problem and, as digital entrepreneurs ourselves, we’re best placed to solve it.”

Lakestar partner Nicolas Brand commented, “The composition of our economies is changing, with digital native businesses contributing an ever-increasing share to overall GDP. Uncapped uses real-time data provided by its clients across APIs to offer bespoke credit and other novel banking services.”

The industry is indeed going from strength to strength with similar startups looking to finance businesses. Uncapped’s Canadian competitor Clearco recently attaining a $2bn valuation. Dublin’s Wayflyer and Berlin’s Uplift1 offer similar services in Europe.

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