London payments start-up GoCardless has tapped up JPMorgan to lead a fund-raising process that will likely see the firm reach unicorn status, the Standard can reveal.
JPMorgan is understood to be in the early stages of working on a funding round for the 10-year-old business. A source in the market suggested GoCardless could be seeking around £200 million. The company last raised money in December 2020 when investors including Bain Capital put in $95 million. GoCardless was valued at $970 million in the deal. New funding would likely see the business become a unicorn — a private tech firm worth over $1 billion.
JPMorgan and GoCardless declined to comment.
GoCardless is one of London’s earliest fintech success stories. The company helps businesses accept direct debits online, as well as offering broader payment services. Its original niche was serving small businesses once thought of by banks as unprofitable in the direct debit market.
Today it works with the likes of The Guardian newspaper, challenger energy supplier Bulb and TripAdvisor. It processes around $20 billion of payments for 65,000 customers around the world each year and has offices in New York, San Francisco, Paris, Munich, and Melbourne.
The effort to raise new money comes amid an explosion of investor interest in digital payments after the pandemic pushed more shopping online. Checkout.com, another London payment business, saw its valuation triple during the pandemic to hit $15 billion at the start of this year.
GoCardless has raised around $240 million to date, according to data provider CrunchBase.
JPMorgan’s involvement suggests the US bank could be angling for work on an eventual IPO of the business. Wise, another London fintech start-up founded around the same time as GoCardless, recently went public at a £8 billion valuation, showing that fintech businesses can reap significant fees for investment banks.
GoCardless was founded by three Oxford graduates who worked in consulting before setting up the business. Two of the three have since gone on to found other notable start-ups: Tom Blomfield set up digital bank Monzo and Matt Robinson established digital estate agent Nested. Hiroki Takeuchi, the final of the three, remains with the business and is CEO.
The company’s latest set of accounts covering the year 2019 show the business made a pre-tax loss of £29 million on revenues of £29 million.
Article by Oscar Williams-Grut reposted from Evening Standard