A fast-growing financial technology start-up has raised its third round of equity funding from a syndicate of investors including Finance Yorkshire.
Ffrees, the UK’s leading digital current account provider, will use a £300,000 cash injection from the regional funding body to introduce new products including a mobile app, and to re-develop its platform to allow direct debit transactions.
Established in 2012, Sheffield based Ffrees is one of a new breed of small, fast-growing financial technology – “fintech” – companies which is offering an entirely different approach to the retail banks. It currently has 35,000 UK customers and is adding around 1,000 new ones each week.
Founder Alex Letts said: “Ffrees is not a bank but an account that also helps customers to save.
“We don’t rely on their wealth for our revenues, there are no unexpected fees and we don’t try to sell them products.
“We don’t offer overdrafts and we don’t run credit checks.
“A vital part of our ethos is saving and effective money management – we aim to take customers away from the debt mentality and encourage them to control their finances through tools such as our online ‘jam jars’ and the Ffrees Money Manager, which is free and helps to pay bills, avoid debt and control spending.”
With the latest round of funding, Finance Yorkshire has now invested a total of £1.55m in Ffrees since 2012.
Alongside investment from other parties, the business has evolved from a prepaid debit card provider to a much wider-reaching business with the potential to change the way customers save and spend money.
Finance Yorkshire Portfolio Manager Ian Brown said: “Ffrees has responded very effectively to the disenchantment many people feel with the retail banks.
It offers a real alternative which is easy to use and has customers’ financial security at its heart.
“This latest round of funding from Finance Yorkshire will enable the business to develop a new, more cost-effective platform, in addition to an app which will allow the Ffrees account to be used entirely on a mobile device.”
He added: “The business has a hugely experienced management team in place, with big ambitions for the future, and we are confident of its ongoing success.”
Within the next five years Ffrees aims to have 1 million UK customers.
Alex Letts said: “Finance Yorkshire is a remarkable investor. It attracts experienced, responsible, creative talent and charges them to deliver back value, however ambitious the plan. This is financially astute.”
To date, Finance Yorkshire has made 647 investments totalling more than £80 million.
Finance Yorkshire provides seedcorn, loan and equity linked investments, ranging from £15,000 to £2m to help a range of small and medium sized businesses to meet their funding requirements for growth and development.
The project is supported financially by the European Union. It has attracted £30million investment from the European Regional Development Fund (ERDF) as part of Europe’s support for the region’s economic development through the Yorkshire and Humber ERDF Programme, £15million from UK Government and £45million match funding from the European Investment Bank.