Goldman Sachs leads £45 million investment in British fintech start-up Nutmeg
Goldman Sachs has backed British financial technology business Nutmeg through a £45m investment round in the company.
Nutmeg announced on Tuesday that it had raised the money from investors including Goldman Sachs’ Principal Strategic Investments arm as well as Hong-Kong listed financial advisory firm Convoy.
The new funding is subject to approval from the Financial Conduct Authority, Nutmeg said. The business plans to use the funding to continue its international expansion.
Founded in 2011, Nutmeg manages customer investments and allows them to use a smartphone app and website to tailor their portfolio according to their desired risk level.
Rana Yared, a partner at Goldman Sachs who will be joining Nutmeg’s board, said: “Nutmeg has already established itself as one of the fastest growing wealth managers in the UK.
"We are excited to fuel further growth and innovation through our investment and to support management in their vision of leveraging technology to broaden access to world-class investment solutions."
Nick Hungerford, the founder of Nutmeg, stepped down from the chief executive role at the company in 2016. The current head, Martin Stead, joined the business from EDF, where he was the company’s marketing, sales & digital director.
The company’s most recent accounts showed that losses at Nutmeg rose to over £12m, which it said was due to a rise in regulatory costs and further investment into the business.
Nutmeg faces growing competition from a new generation of digital wealth manager companies.
New start-ups including London-headquartered Plum are using automated messaging bots to talk to customers about their money. And new digital banks including Monzo and Revolut are also branching out into helping their customers invest their savings.
Monzo chief executive Tom Blomfield told the Telegraph in November that he was keen to allow customers to purchase investment products.
“If you are buying stocks and shares and you want a tracker, does it make sense to embed Nutmeg? Or does it make sense to simply allow people to buy the BlackRock ETF that's behind Nutmeg? It's the same ETF you're getting anyway,” Blomfield said.
