The British mobile payment app has defied Brexit fears by fundraising an impressive £12 million. The successful fundraising round also highlights the strength in venture capital investment, according to the Financial Times who broke the story on Monday. The fundraising will be aimed at supporting the firm’s European and US expansion.
Big fundraising news for Brexit Britain
There have been growing concern, especially in the fintech sector, about the impact Brexit will have. Many have seen it as problematic for the country’s fintech sector, especially in terms of fundraising. The latest research has also pointed out a slight dip in UK investment.
However, Yoyo seemed to fight against the trend with its impressive fundraising round. The £12 million investment included investors such as the German retailer Metro Group, as well as fund manager Neil Woodford.
Overall, the company’s latest fundraising round has seen it raise over £20 million. Yoyo is planning to use the investment to push its business further into Europe and the US. Alain Falys, the co-founder of Yoyo, told the Financial Times, “There is a big push in the US coming after this round”. Falys used to work as a Visa executive.
Falys also believes the incoming Payment Services Directive 2 by the European Union will help provide Yoyo with bigger opportunities. The directive allows third party payment providers to access banks’ client accounts and therefore, could help them bypass big lending banks.
Hansjörg Sage, the general manager at Metro Group’s digital Unit, commented on the deal by stating, “We intend to work with Yoyo, leveraging its considerable success in the UK, to help tailor and market its offering to the continental European market and in particular, the long-tail of independent entrepreneurs.”
Fast growing startup
Yoyo was founded four years ago and it recently passed the milestone of processing over 1 million monthly payments. It currently has 400,000 registered users and it can be used to handle payments in 1,700 outlets. As it started out as a university-based app, it can be used in over 60 UK and Irish universities.
The app can be used to make payments for goods with a mobile phone. It also provides information for the retailers, which can send personalised offers to the consumer. Falys described the app to the Financial Times by saying, “We have combined the best of Starbucks mobile experience with the advantages of Tesco’s Clubcard scheme.”
Strong venture capital investment during Q1
The Yoyo fundraising also shows how strongly venture capital investment has performed during the first quarter of the year. As DealMarket reported earlier, KPMG’s report showed European fintechs attracting over $600 million in VC investment during Q1. This is a new record for VC fintech investment in Europe.
Despite the record-breaking Q1 in terms of venture capital investment, the overall fintech investment in the first quarter dropped year-on-year. Global investment stood at $3.2 in fintech, showing the quarter hasn’t started as strongly. This has caused some concern, although the KPMG report suggested that investment would pick up during Q2.