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.
