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Flagstone's £108M primary and secondary round

Mar 11, 2024
Illustration of a piggy bank with gradually smaller piggy banks falling into it

Illustration: Sarah Grillo/Axios

Flagstone, a U.K.-based savings startup, raised £108 million ($138 million) in primary and secondary funding from private equity firm, Estancia Capital Partners, it announced today.

Why it matters: Secondaries have been on the rise amid a slowing exit market as companies seek returns for investors and employees. Look no further than Stripe.

Zoom in: The "vast majority" of the £108 million went to buying shares from existing investors, says Estancia managing director Takashi Moriuchi. Those investors remain on the cap table.

  • Estancia will take a minority stake in the business. Founded in 2015, Flagstone has been EBITDA profitable since the last quarter of 2022.
  • Though he did not disclose the company's valuation, Moriuchi said it was an uptick in valuation compared with its last funding round.
  • Flagstone, which manages about £11 billion in assets, pitches itself as a single platform for consumers and businesses to shop for higher rates by spreading capital across multiple fintechs, banksand advisers.
  • It plans to use part of the capital to expand its U.K. business and internationally.

Context: Flagstone previously raised roughly $45 million, largely from venture capital firms and a family office.

  • The investor list includes Volition Ventures, Kindred Capital, Omers Ventures, Alexander Square Partners and Vanneck.

The bottom line: "As liquidity has come out of the system and rates have normalized, banks are looking for different sources of capital," says Moriuchi.

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