Mediobanca makes bet on London with start-up venture

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Mediobanca has joined forces with a London-based start-up investor in a bid to launch more than 30 fintechs over the next five years, in the Italian bank’s latest bet on the UK.

The Italian bank has established a joint venture with Founders Factory, whose co-founders include Brent Hoberman, as the lender seeks to strengthen its presence both within the UK and the wider tech sector.

As part of the plan, Mediobanca will invest €12mn in the joint venture and look to back fintechs, particularly those with a focus on technologies such as blockchain and artificial intelligence.

“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,” said Henry Lane Fox, Founders Factory chief executive.

But the push by Mediobanca comes at a testing time for fintechs as the easy funding they enjoyed during the era of low rates ends and investors grow more cautious.

Under chief executive Alberto Nagel, Mediobanca is trying to expand its role beyond corporate Italy, where it has been a powerbroker for decades.

The joint venture with Founders Factory is the latest investment in the UK in recent months. In May, the bank acquired London-based Arma Partners, which specialises in advisory services across the software and cloud computing sectors. The deal valued Arma at more than twice its annual revenues of more than $100mn.

Two years ago, Cairn Capital, which is controlled by Mediobanca, snapped up Bybrook Capital, one of London’s most successful distressed debt firms. The merged firm has since been rebranded Polus Capital Management and remains controlled by the Italian bank.

The Italian bank’s willingness to bet on London comes as Brexit and, more recently, the near shutdown of the market for initial public offerings has raised questions over its ability to compete as a global financial hub.

Mediobanca regards London as the best hub through which to expand both its wealth management and investment banking businesses. 

Nagel, whose term as chief executive ends in the autumn, said that the joint venture with Founders Factory would allow the bank to “seize new opportunities”.

The joint venture will also look to back early stage fintechs in other parts of Europe. Capturing more business from the tech sector is central to Nagel’s latest strategy.