Capitalflow acquired by Dutch fintech for undisclosed fee

Acquisition of Irish business lender will give it access to funding at better rates, CEO says

Capitalflow’s target is to treble the size of its loan book to €1 billion over the next three years. Photograph: iStock

Capitalflow’s target is to treble the size of its loan book to €1 billion over the next three years. Photograph: iStock

 

Irish business lender Capitalflow has been acquired by Dutch fintech Bunq for an undisclosed fee. The transaction is subject to approval from the Dutch financial regulator.

Speaking to The Irish Times, Capitalflow’s chief executive Ronan Horgan said the acquisition would give it improved access to funding at competitive rates, and would increase its scale. Capitalflow’s target is to treble the size of its loan book to €1 billion over the next three years, he said.

Latest accounts for Capitalflow Holdings show that its loans and advances to customers amounted to €331 million at the end of 2019, some 78 per cent higher than a year earlier.

Accumulated losses

The company made a profit of €232,753 for the year, having recorded a loss of just under €2.2 million in 2018. It had accumulated losses of just more than €8 million at the end of 2019.

Mr Horgan said the company made a loss in 2020 due to provisions booked as a result of the impact of Covid-19 on the economy. But the company has returned to the black this year and the level of loans to customers was unchanged.

Based in Dublin, Capitalflow employs 60 staff and currently has about 3,000 customers on its books. It lends to SMEs in a broad range of sectors across the Irish economy.

Consumers and businesses

Bunq was founded in 2012 by successful Canada-born entrepreneur Ali Niknam, who has invested €98.7 million in the company. It provides subscription-based banking services online to consumers and businesses.

Based in the Netherlands, it claims to have passed €1 billion in users’ deposits earlier this year and its services are available in 30 countries.

The Dutch group raised €193 million in funding this year, including from British private equity firm Pollen Street Capital, which owns Capitalflow, to give it a valuation of €1.6 billion.

Bunq said it recently achieved its first-ever profitable month and “expects to break even on a monthly basis before the end of 2021”.

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