1007. News: Goldman Sachs acquires Industry Ventures and UK fintech funding bounces back to 2022 highs

28:34And unfortunately, our cousins across the pond have bigger pockets than us around this sort of area. And so U.S. capital coming to U.K. and to Europe to fund later stage growth businesses is still a key trend that we're seeing. You look at the revenue raise last month, that$2 billion there, a whole platter of investors in there, but clearly a skew away from the UK at that point. I think what's also quite important is to kind of articulate what are we in the UK trying to do different to this? And some of the things around the mansion house rules, the kind of changes to pension rules, et cetera, really can try and drive some of that changes.

29:10But I think it's also empowering us to kind of make sure that we're shining the spotlight on UK businesses, making sure that those UK investors that are quite susceptible to wanting to invest in UK growth stage businesses get the opportunity and we're kind of connecting them up as much as possible. Fantastic. Thank you so much. We could talk about this all day, but we need to move on. So on that note, we will take a quick pause here and we will be back shortly. Hey folks, David Breer here, CEO of 11FS. Here's something you might not know about me. I get a lot of people trying to impersonate me online.

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31:14Before we dive back into the news, a quick word about our latest Insights episode. Artificial intelligence is everywhere. Your feed, your boardroom, your LinkedIn inbox, all buzzing with chat GPT generated everything and promises to transform this, that and the other. But when you look at actual customer-facing use cases and financial services, there's not so much to see. So what's holding things back? This week on Fintech Insider Insights, we cut through some of the hype to talk about what's really working. Smart chatbots, virtual agents, faster onboarding, automated know-your-customer and compliance, saving hours, reducing errors, and getting customers' answers faster.

31:57My colleague David Barton-Grimley is joined by a panel of experts from Starling and Multiply to ask the big questions. How do we go from these small wins to truly transforming the customer experience? Find it in the same podcast feed as this one. And now, back to the news. The UK's Financial Conduct Authority has launched an open finance accelerator. So the Financial Conduct Authority, or FCA, has introduced a comprehensive strategy to advance open finance in the UK, aiming to enhance consumer control over financial management and future planning. In partnership with KPMG and Europe Economics, the FCA has published a report highlighting the benefits of open banking and finance, emphasizing the need for balanced data sharing and robust technological infrastructure.

32:43The Smart Data Accelerator extends the FCA's sandbox, enabling firms to pilot open finance applications. The FCA plans to conduct two tech sprints between November 2025 and February 2026, focusing on innovations in mortgage processing and small and medium-sized enterprise services. To tell us more about this raise, we briefly spoke to Colin Payne, Head of Innovation at the FCA. It's Colin Payne here, the Head of Innovation at the FCA, and there's big news this week from the innovation team. We just launched two groundbreaking open finance tech sprints under our new Smart Data Accelerator initiative.

33:25These sprints focus on two of the most important challenges in people's financial lives, home ownership and small business credit. We're bringing together the banks, fintechs, data providers and policy experts to co-design practical, scalable solutions that make financial data work harder and fairer for everyone. I'm also thrilled to announce alongside this a new partnership with Radium, who are powering the data infrastructure that will enable secure, real-time testing of open finance use cases. This collaboration helps us move from theory to practice, turning smart data into smart outcomes. Applications are open now, so if you're passionate about the future of open finance and want to shape how data transforms markets for good, this is your moment to get involved.

34:11Smart Data Accelerator, innovation with purpose. feel free to reach out to either me or the team and we'd love to have you involved. Thanks ever so much. Barry, it's fabulous to have you here as someone who's passionate about open finance and open data. So you partnered with the FCA for the Smart Data Accelerator and the upcoming tech sprints. Can you tell us a little bit more about it? Sure. So yeah, we're super pleased to be partnering with the FCA on their Smart Data Accelerator ahead of two exciting tech sprints coming up in November. We've been discussing how we could help power the FCA Innovation Sandbox to really accelerate their thinking on open finance and smart data.

34:58So the two tech sprints are covering mortgages and also a second one covering SME Finance. And we're providing our award-winning trust framework technology, Radium Connect, to power secure data exchange between trusted participants in a fully representative fashion so that, you know, this collaboration will enable concepts to move from theory to practice, to have real world implementations and to co-create essentially real concepts and to launch new propositions that serve consumers in managing their financial lives better. So what does your sort of framework do? Can you tell us a little bit more about what's the sort of plumbing underneath it?

35:41What are you enabling firms to share? Sure. Well, the secret sauce is our product, Radiant Connect. We brought that to market in 2020, roughly. The origins of that come from Open Banking Limited. So we pioneered the technology, having conceived of, designed and built the trust services that have underpinned open banking for every consumer and every business for almost eight years now. So it's really stood the test of time. And we've brought it to market as a cost-effective turnkey solution. And really it enables

36:22secure innovation at scale between a large group of participants, those participants that are surfacing data, maybe account providers, and the fintechs that wish to rely and consume that data on behalf of consumers and businesses to drive some innovative propositions that maybe don't exist in market today and to really benefit them in their financial lives. So it is plumbing for a large extent. It bundles a directory capability. It bundles a public key infrastructure that issues digital certificates to ensure the authenticated, encrypted integrity of connections and all of the data that moves over the wire.

37:04Yeah, so it's really exciting for a delight to be involved. Thank you. I'm keen to hear from the panel as a whole about, you know, the UK's sort of progress with Open Finance. I mean, obviously, this is very, very exciting. But on the other hand, sometimes, you know, when we're talking to small businesses, for example, you know, we hear them sort of expressing frustration with sort of direct debits and standing orders because they're just not flexible enough for the kind of subscription-based pricing that lots of the kind of innovative startups, Tom, that you work with, you know, are sort of trying to set up and so on.

37:36Is the UK moving as fast towards open banking and open finance as it sort of could and should? Or have we sort of just sort of slowed down a little bit compared with, let's say, India, Aaron, you know, where we're just talking about, you know, and UPI and so on? And I realize it's a little bit of a loaded question, but Tom, Aaron, what do you think? are we moving fast enough in the UK or have we sort of slowed down a little bit? I definitely agree with you, Benjamin, that when we first kind of had the big bang of open banking, we all thought we'd be using these new payment rails in exciting and efficient ways and it would bring down cost.

38:20It would be very, very kind of good for the wider economy. I know banks like HSBC spent quite large sums of money being able to implement the right technologies to be able to kind of be part of the network. But then being able to find ways to be creative and innovative and use the rails, it seems to be quite lackluster. Got a couple of companies that are doing fantastic work around the kind of account-to-account payment rail methods, you know, the likes of Trulayer and Yapply and others. And I think that's fantastic for his own use case. But actually being able to do something that's broader on a payments business, a payment rails and a payments perspective is a little bit more lackluster.

38:58I'm really excited about what Barry's building and what they're kind of doing around data for it. And I think kind of being able to utilize open finance, open banking from a kind of information sharing perspective, whether that's kind of better credit decisioning that might come out of the kind of mortgage work stream that'll be happening, or kind of being able to promote financial inclusivity by being able to make sure that credit scoring is being done in the right way, I think is really quite key. Yeah, I'd probably agree. I think when you look at open banking, the UK has done relatively well in that space.

39:31So we allow customers, for example, to add money to their wise account using open banking alongside a number of other payment methods. And it's one of the most popular ways to add money to your account in the UK. However, you look all over the world and we're seeing the UK is far, far more advanced on this journey than a number of other markets, including Europe, the US, and various other parts of the world. But as Tom said, outside of the open banking scope with payments and account information, the other elements of open finance, be that SMEs, mortgages, pensions, are all still very, very far behind.

40:15And it's really cool to see the FCA push forward with this. And I've seen they've got loads of really cool plans, but there's still a tremendous amount of work to do. Any aspect of personal finance and SME finance that currently isn't touched by this open banking scope still feels like it's 10, 15 years behind everything else that's happening in payments. So it's really cool to see Barry and Co just work with the FCA really closely to help push this forward because there's still so much potential for disruption and innovation and so many use cases that probably haven't even been thought of yet.

40:59So Barry, what are you most excited about? What are you most hoping to sort of see come out of these sprints, come out of this work that you're doing with the FCA? Ultimately, we're going to be extending the scope of data to include a new scope, right? So beyond current accounts, we're going to be looking at the possibility of managing mortgages, the possibility of dealing with SME finance. And these are just two of these cases to start with. They're priority areas that CFIT has explored, Centre for Finance Innovation Technology. And we think there's significant benefits to be driven. And these accelerators essentially will allow participants to create and to be creative in thinking how to solve for some of the problems that exist that consumers haven't been able to manage as effectively to date.

41:50and we think that can really drive real benefit and real value for consumers and for businesses. So we're incredibly excited about the prospects and seeing what people are able to bring to that and the innovation days that are scheduled and the demos. So it's a really interactive, creative exercise and it's great that the FCA facilitate and foster that. What sort of companies are you expecting to take part? Is it going to be sort of startups with sort of one or two developers or do you think, I don't know, HSBC Innovation Banking or WISE might take part? Will it mostly be small firms or are you hoping you'll get some bigger firms taking part as well?

42:30Typically, what we see is a real mix, right? You see new potential startups that are maybe in an incubation stealth mode looking for an opportunity to bring a new proposition to market. You see established players already in the open banking space who are looking at adjacent go-to-market efforts. And they're well-placed to execute because they've built that muscle, they've built the intellectual capital, they've got the capability to execute. And you'll see larger players too. You've got large blocks of mortgages and you could potentially serve better the SME in terms of underbanked and underfinanced.

43:08So I think you'll see a real mix. Fabulous. Well, we're going to have to get you back onto the podcast in six months' time to tell us about all the success that you've seen. I should look forward to that. Fantastic. Well, congratulations to you and your team at Radium and best of luck to the FCA and Radium in driving this important innovation forward. Indeed. Okay, let's move on to our next story, which is that Goldman Sachs is acquiring industry ventures for around a billion dollars as alternative venture capital exits surge. So Goldman Sachs is acquiring industry ventures, which is a venture capital firm with some$7 billion in assets under supervision for about$965 million, making it one of the largest alternative sort of VC acquisitions in a long time.

44:00The deal gives Goldman access to industry ventures' portfolio of secondary fund stakes and direct venture investments, expanding Goldman's footprint in alternative assets. The acquisition comes amid a surge in venture capital secondary market exits driven by investors seeking liquidity and trying to redeploy capital into new funds. Industry Ventures' team will continue to operate independently, while Goldman uses its global distribution and capital to try and scale its secondary market offerings. So this is an interesting story. I mean, Goldman Sachs, obviously vast investment bank, and you always sort of think, well, surely they've got capabilities everywhere.

44:43What do they need to acquire? But here they are acquiring a VC fund. Thomas, what do you think of this? Is this driven by the sort of maybe the difficulty of doing IPOs, of sort of needing to find alternative ways for sort of startup businesses to get funding? What do you think the story is here? Yeah, I think it's exactly that. You know, quite a few years ago, secondary portfolio sales would have been a bit of a dirty word. They would have been the sort of portfolio sales that were a bit lackluster. And there's probably a little bit of value in there if you really wanted to roll your sleeves up and work quite hard for it.

45:21But actually, overall, they were seen as a quiet exit for a portfolio. With the equity markets not performing quite as well as we would like at the moment, the public equity markets and being open for IPO exits, would there be a need to start to see some real quality recycling of capital? I think a lot of very, very interesting, very, very credible funds are using this as an avenue to put more capital back into their machine and recycle it through. So no longer is it the dirty word, but actually it's a very credible avenue to get more capital back. I think someone like Goldman Sachs, it's a fantastic example for them to be able to kind of take some of the great wins that they've already had with their direct VC investing and with their secondary strategy already and just amplify that.

46:09you know, kind of we've already got a great platform, they've already got kind of a good experience of investing in the right sort of technology companies that have performed exceptionally well, and then being able to kind of take that next step further, and kind of broaden that out into other parts of the same collection of assets, really. Barry, what do you make of this story? Because we've seen a number of startups in the UK getting acquired, you know, sort of fintech startups getting acquired, you know, so perhaps when the founders set the business up in the first place, they imagined, you know, the IPO and, you know, ringing the bell on the stock market and so on.

46:45But actually quite a common path for successful fintechs is to become part of other bigger, more successful fintechs. Do you think there's maybe a sort of shift in thinking about how to sort of repay the venture capital? Possibly. You know, I look at the numbers here and I think, wow, these are serious. It's an interesting move by Goldman, the Secretary of Market and BC. So I guess we're, as a business, as Radium, in the privileged position of having fully bootstrapped the business and scaled it organically without tapping external funding or debt. And this has really enabled us to innovate and grow at a fast pace in a very disciplined way.

47:28And we've performed exceptionally well expanding it to overseas markets. thankfully without needing to do a round or a raise and dilute in recent times, which has been fantastic. So we're hoping to continue on that path and to grow the business to an exit event without potentially having to dilute at all. So that's quite an unusual and unique position, and therefore we kind of track under the radar on a lot of these things. Indeed, impressive. Aaron, I realize you're not going to be able to tell us Wise's list of fintechs you're looking to acquire but um do you have you sometimes thought as a business about where there are sort of other fintechs that maybe have capabilities that that might fit with wise i can't remember whether wise has actually done any acquisitions itself um but presumably you occasionally think about is there is there a little you know fintech in this market or that market that actually might suit your portfolio quite well yeah we always we always try and go back to the customer problems and it's it's what i discussed and described earlier which is around this problem of money movement across borders and we we try and think through what is the most complete way we can solve those customer problems in ideally a way that's never been done before and almost always we come to the conclusion that if we can always try and do this best ourselves because we have this knowledge of solving the singular problem in so many markets now that we're quite unique in the experiences that we can bring to a market.

49:04And when we go and speak to regulators like we have done in India and the UAE and all over the world, we can often share our experience of solving this problem in other countries. So more often than not, our thinking and our logic takes us to, we should probably try and do this best ourselves because it's usually the most complete way of solving this problem and that typically tends to be the way we approach it. Thomas, last quick question for you. I was looking at this story and I was thinking, is this basically an American story? This is about secondary market liquidity in the States, but actually maybe it's a bigger story than that.

49:44Do you think this has sort of ramifications for startups in Europe, Asia, Latin America, as well. Is this a US story or has this got implications a bit more widely? No, I think it does have global implications because it just further exemplifies how pockets of capital can be global. And so you've got a big investment bank like Goldman Sachs looking to deploy capital into this part of the market. As I said earlier, Goldman's had a really successful track record with its VC investment already, although be it you know kind of relatively modest in scale so this is clearly a testament that they're kind of doubling down on that and wanting to kind of go further into it and you see that with a lot of the big banks you see that kind of with uh cvc arms hsbc ourselves we've got a fantastic um cvc arm that we invest into a number of great great quality companies that we feel can move the dial in our business but also kind of move the dial in the ecosystem as a whole so i think that kind of really shows the founders of early stage businesses that there's a really good story here.

50:50There's a really good theme to more equity capital being around to support their ambitions. And it might come from pockets of locations you didn't necessarily think would be the usual route. Indeed. Okay, well, we'll take another quick pause here and we will be back very shortly.

51:17Okay, now for a quick look at one more news story this week that we don't have time to cover in full, but we think is just as interesting. Which is that Revolut is facing further UK license delays, but meanwhile it has been acquiring an AI travel agent. So Revolut has experienced further delays in obtaining a full UK banking license, owing to regulatory concerns over its risk controls related to cross-border payments. The digital bank's mobilisation phase, which began after receiving partial approval last year, was expected to conclude by the 25th of July this year. However, there has been no progress, and the company remains limited to accepting total deposits of just£50 ,000 in the UK.

51:58The UK's Financial Conduct Authority, the FCA, and the Prudential Regulation Authority, the PRA, are seeking assurances that Revolut will enhance its risk management controls to support its rapid international expansion. But meanwhile, Revolut has acquired Swifty, an AI-powered travel agent startup, to enhance Revolut's loyalty and lifestyle products by integrating Swifty's proprietary AI technology. So these are two really interesting stories from one of the world's fastest-moving fintechs. Revolut, of course, has a banking license from Estonia that enables it to operate in many European countries.

52:39so certainly really it's UK business that's being really held back but it must be very frustrating for Revolut that it has failed to get some of those, failed to get that approval and of course there have been many banks that have got caught out by cross-border money movement and have been in trouble with regulators for having inadequate money laundering controls and clearly the regulators are trying to avoid Revolut which is of course a very popular way of moving money across borders, trying to avoid Revolut becoming a vector for people moving money illegally or anything like that. So very frustrating for Revolut.

53:17I'm sure that license will come. But meanwhile, of course, it carries on building out its own products. And Revolut's move into travel is very smart as Revolut migrates towards becoming perhaps one of the first European super apps as it builds more and more functionality to enable it to help its customers achieve more of their jobs to be done. So I'm sure we'll hear more on this story. And finally, now time for something a little bit different from the world of business to finish this week's news show, which is that as food delivery drones take off in Ireland, here are the most popular items. So Manor Aero, which is an Irish startup, is planning to launch food delivery drones in the UK, pending regulatory approval.

54:04The drones are autonomous quadcopters that deliver meals in about three minutes using a biodegradable drop line. Trials in Ireland sparked noise complaints from residents, raising questions about community impact as the technology scales. Meanwhile, the most popular orders so far, according to the founder, have been coffee and, surprisingly, eggs. um so what do we think um aaron is this the beginning of the end for um britain's famously soggy chips uh is this the start of a sort of mid-air seagull buffet um what do you think i mean are we going to see yeah deliveries of food i as someone who very much probably like abuses Deliveroo and Just Eat and all of those delivery apps probably a bit too much.

54:57I very much look forward to putting my name on the wait list for this service coming to London. I mean, to be honest, I have no idea how it's going to work, but I look forward to being able to order. I've got a little child at home, so there have been times where I've very much forgotten to ensure that we have a stock of nappies at the worst possible time. So if they can bring me nappies at 3am on drone, I am all for it. Barry, what's your take? You're looking forward to instant on-demand drone deliveries? So as an Irishman from Dublin, I have to say I find this story highly amusing, but also a really exciting innovation actually.

55:42Like who doesn't like a Friday Night Takeaway. I have to say, I do worry about the seagulls savaging my fish and chips. But I know my family, my sisters had stuff delivered in their back garden through these drones and they just land and drop off the payload and head off again. It's very amusing to her young boys, two-year-olds looking up at this thing in the sky that's dropping off. I think it was nappies or something innocuous. But yeah, a Friday Night Takeaway sounds like a great innovation. who likes going out in the cold winter's evening on a Friday when maybe you've had a beer or something.

56:17If it can land in your front door, then what's not to like? What do you reckon, Tom? I think when I read this article, I thought there's clearly a startup idea here for kind of egg boxes with shock absorber, shock absorber, something similar. I can't imagine a box of a dozen eggs flying to the sky and arriving on your doorstep being fully intact. But there's probably a spin out there somewhere of kind of people being able to create something that's interesting out of it. As a self-confessed sweet treats fan, I do fear for the kind of biscuits on demand subscription service that will be tempted and thrown at me.

56:55So for my own personal health, I'm not necessarily sure that kind of that's a good innovation that I'm embracing in quite the same way. So we asked you, our listeners, on our FinTech Insider WhatsApp community, what you thought the worst thing to be delivered by a drone would be. And your replies included a piano, rubbish, a three-tiered wedding cake, bees, and perhaps the favourite, a baby.

57:25Okay, last thoughts for the panellists. What were the best thing to be delivered by a drone? Is there anything that you'd love to receive by a drone? That's a tough question, isn't it? Possibly Oasis tickets. I'd like to see a 19 wedding cake come across the skies to my back garden. That'd be quite an interesting thing to observe and then also to kind of tuck into. It'd be tasty. Yeah, it depends. Do I have to also then pay for the thing that they are delivering? I think so. I think that's how it works. If this is free, then the options are a bit more limited. So, yeah, I think I have no idea, so I'm not going to say anything stupid.

58:08I understand that they're actually quite popular for prisons, and there's actually an increasing problem in prisons, because prisoners' friends are delivering all sorts of things by drone. All right. Well, I hope everyone has enjoyed the show. That wraps up today's news. Thank you so much to our three fabulous panelists. Where can people find out a little bit more about each of you and your companies? Thomas, where can people find out more about you and about HSBC Innovation Banking? Yeah, sure. You can find out more from me on my LinkedIn. That's Thomas Easterby on LinkedIn. But also from HSBC Innovation Banking, just go to hsbcinnovationbanking.com.

58:53Thank you. Aaron, where can people find out more about you and about WISE? Yeah, you can always reach out on LinkedIn. That's Aaron Dharamaraja. Or if you want to find out more about WISE, WISE.com if you're a personal customer in SME or our WISE platform website if you're a bank or online platform. And Barry, where can people find out more about you and about Radium? Well, firstly, on our website, Radium.com and also on our social media channel. You'll find lots of interesting things there to follow. So, and by all means, reach out on LinkedIn. I'd love to have a conversation. Thank you. And as for me, Benjamin Ansar, you can find me on LinkedIn and you can find out what the team are up to at 11fs.com or on social media.

59:36Thank you all so much for listening to today's episode. If you like what you heard, please do make sure you follow us. Feel free to recommend us to colleagues or friends who you think might enjoy it as well. If you want to join the conversation, seek us out on social media, just search for 11fs or FinTech Insider, or you can email us at podcasts at 11fs.com. Thank you again and goodbye.

59:59Thank you.