Don't invest unless you're prepared to lose all the money you invest. This is a high-risk investment and you are unlikely to be protected if something goes wrong.
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Risk Summary

Estimated reading time: 2 min

Due to the potential for losses, the Financial Conduct Authority (FCA) considers this investment to be high risk.

What are the key risks?

  • You could lose all the money you invest
  • Most investments are shares in start-up businesses or bonds issued by them. Investors in these shares or bonds often lose 100% of the money they invested, as most start-up businesses fail.
  • Checks on the businesses you are investing in, such as how well they are expected to perform, may not have been carried out by the platform you are investing through. You should do your own research before investing.

You won't get your money back quickly

  • Even if the business you invest in is successful, it will likely take several years to get your money back.
  • The most likely way to get your money back is if the business is bought by another business or lists its shares on an exchange such as the London Stock Exchange. These events are not common.
  • Start-up businesses very rarely pay you back through dividends. You should not expect to get your money back this way.
  • Some platforms may give you the opportunity to sell your investment early through a 'secondary market' or 'bulletin board', but there is no guarantee you will find a buyer at the price you are willing to sell.

Don't put all your eggs in one basket

  • Putting all your money into a single business or type of investment for example, is risky. Spreading your money across different investments makes you less dependent on any one to do well. A good rule of thumb is not to invest more than 10% of your money in high-risk investments. Learn more here.

The value of your investment can be reduced

  • If your investment is shares, the percentage of the business that you own will decrease if the business issues more shares. This could mean that the value of your investment reduces, depending on how much the business grows. Most start-up businesses issue multiple rounds of shares.
  • These new shares could have additional rights that your shares don't have, such as the right to receive a fixed dividend, which could further reduce your chances of getting a return on your investment.

You are unlikely to be protected if something goes wrong

  • Protection from the Financial Services Compensation Scheme (FSCS), in relation to claims against failed regulated firms, does not cover poor investment performance. Try the FSCS investment protection checker.
  • Protection from the Financial Ombudsman Service (FOS) does not cover poor investment performance. If you have a complaint against an FCA-regulated platform, FOS may be able to consider it. Learn more about FOS protection here.

If you are interested in learning more about how to protect yourself, visit the FCA's website here.

For further information about investment-based crowdfunding, visit the crowdfunding section of the FCA's website here.
Insights
Admin
· 2 min read
· Updated on

Challenger Bank Market to Grow $471.0 Billion by 2027

New research in which leading market players were analysed has reported exponential growth of the global challenger bank market over the next 7 years.

GCV portfolio company Atom Bank was analysed alongside Monzo Bank Limited, Fidor Solutions AG, MYbank, Movencorp, Inc., Simple Finance Technology Corporation, Number26 GmbH, UBank limited, Tandem Bank, and WeBank.

In the recent report published by allied market research the global challenger bank market generated $20.4 billion in 2019, and is estimated to reach $471.0 billion by 2027, registering a CAGR of 48.1% from 2020 to 2027. 

Over recent years challenger banks have been disrupting the traditional banking model by providing both retail and business customers with reduced costs by removing the need for legacy IT systems, physical branches and historical regulatory issues.

Read More: Atom Bank's balance sheet exceeds £5 billion as the company reflects on a positive 2022

Unlike highstreet banks, challenger banks are able to act quickly, adapt to consumer and business needs, taking an agile and flexible approach towards developing banking systems and improving the customer experience.

 

High Growth for Challenger Business Banking 

The allied market research report details the segmentation of the global challenger bank market based on service type, end user, and region. 

Based in service type, the loans segment contributed to the largest share in 2019, accounting for nearly one-third of the total share, and is estimated to maintain its dominant position during the forecast period.

Based on end user, the business segment accounted for the largest share in 2019, holding nearly three-fifths of the total share, and is expected to maintain the largest share throughout the forecast period.

These findings shouldn’t come as a surprise given that as of July 2018, the SME Lending Market was reportedly worth over £154 billion yet £48 billion is still unmet in the demand by UK SMEs. 

At the same time new SME loans from high street lenders started to decline, there was also an increase in challenger banks presenting themselves as a viable external finance alternative for SMEs.

Business Banking has changed significantly over the past few years, with businesses requiring financing options in days rather than months. 

For customers wanting to borrow between £500k and £5 million, the experience for many is a very frustrating and a time-consuming process that ultimately stifles business growth for the business lenders.

 

 

GCV Portfolio Company B-North

At Growth Capital Ventures, we recently worked with B-North (a start-up which aims to transform the way SME lending is delivered).

B-North are committed to building a business focused bank which combines market leading personal service, best in class delivery and exceptional speed of funding.

By streamlining the lending process, it will seek to serve business customers in a way which cannot be matched by traditional banks.

Once operational, the bank will deliver loans of between £500,000 and £5m to ambitious companies looking to scale up their business, providing finance up to ten times faster than large mainstream banks.

Having raised seed capital of over £4m including a six-figure investment from the Greater Manchester Combined Authority, B-North has used this to build the core team, develop a prototype lending platform and broker portal whilst also building significant momentum in the banking licence process. 

In late 2019, B-North further raised over £2.8 million through the Growth Capital Ventures online investment platform, exceeding its initial target of £2 million.

The latest investment round places B-North in a position to further strengthen the existing management team and continue building the infrastructure ready for launching the bank later in the year.

 
Driving Growth.
Creating Value.
Delivering Impact.

Backed by

Growth Capital Ventures (GCV) is backed by funds managed by Maven Capital Partners, one of the UK’s leading private equity and alternative asset managers.