Complexity of deal-making has materially increased in the last 12 months. Debt, in the form of warehouses, revolvers and notes, often plays a pivotal role even in "vanilla" deals.

Current market:

• Limited M&A activity, dampened by UK motor finance uncertainty.

We are seeing:

Private capital providers display continued appetite for specialty lenders:

• Focus on early-stage fundraisings (i.e., pre-Seed to Series B)
• Only SME lenders buck the trend

Funding rounds often comprise:

• Equity & debt: across SME lending (e.g., Lenkie’s Series A) and working capital finance (e.g., Revving’s Series A) sub-verticals
• Debt only: across motor finance sub-vertical (e.g. Ayan Capital’s and Carmoola’s fundraisings)

Consolidation activity by:

• Established banks: displaying appetite for leasing (e.g., NLB’s acquisitions of Summit Leasing Slovenija and Mobil Leasing)
• Trade: seeking scale and scope

Partnerships remain the preferred route for B2B BNPL growth:

• Last 12 months:  Mondu / Payin3 and Mondu / Lemonway partnerships
• Previous 12 months:  Hokodo / BNP Paribas and Two / Santander partnerships

Key drivers / challenges:

SME lending retains its crown as the hottest sub-vertical for growth capital:

Trade consolidators searching for:

• Share of existing market (e.g., Orbian’s acquisition of Roger)
• Entry into new geographies (e.g., MNT-Halan’s acquisition of Tam Finans)
• Enhanced technological capability (e.g., Credion’s acquisition of CapSearch)
• Digital distribution channels (e.g., Orbian’s acquisition of Roger)

Established banks seeking:

• To conquer specialist niche markets (e.g., Paragon Bank’s acquisition of Five Arrows Leasing)
• In-house technological advancement (e.g., Alpha Bank’s acquisition of Flexfin)
• Diversify lending capabilities (e.g., Victoriabank’s acquisition of Microinvest)

Trends to watch:

The UK Financial Conduct Authority’s consultation process provided long-awaited certainty for UK motor finance (following the Supreme Court’s judgments on discretionary commission arrangements):

• Private equity exits of UK motor finance businesses (which have been backed for longer than originally intended)
• Larger lenders deploying excess provisions to acquire further scale
• Medium-sized lenders reconsidering risk appetite— some lenders will consider shrinking exposures

Specialty Finance / Marketplace Lending – Publicly reported deals & situations

Sustained buyer / investor / partner interest

Private equity / venture capital:

• General Catalyst (Customer Value Fund): SME finance, €92.7 million equity investment in Finom (May 2025)
• ABN Ventures: Corporate credit card and financial management, Participation in US$19.8 million debt and equity funding round in Qashio (May 2025)
• Partners for Growth: Automotive finance, Provision of £25 million Shariah debt funding to Ayan Capital (April 2025)
• Incore Invest: SME finance Participation in €20 million Series B funding round in Froda (April 2025)
• Bain Capital Ventures: Cross-currency management, Participation in US$33 million Series A funding round in Grain (March 2025)
• Breega, Evolution Ventures, Endeavor Catalyst, Daphni, Speedinvest, 212 and Plus VC: SME revenue¬based financing Participation in US$69 million Series A debt and equity funding round in Flow48, (February 2025)
• White Field Ventures and Vastly Valuable Ventures: Marketplace lending Participation in (undisclosed) pre-Seed funding round in Qardy (August 2024)
• Pollen Street Capital:  SME lending Participation in €35 million funding round in Finbee Verslui (July 2024)

FIs:

• Victoriabank / Banca Transilvania: SME lending, Acquisition of Microinvest (April 2025)
• Mediobanca: Financial leasing, Acquisition of remaining 40% of SelmaBipiemme Leasing (April 2025)
• Deutsche Bank / DWS: Factoring, Participation in £107 million Series A debt and equity funding round in Revving (February 2025)
• Alpha Bank / ABC Factors: Factoring, Acquisition of Flexfin (January 2025)
• NLB: Leasing, Acquisition of Summit Leasing Slovenija (August 2024)
• Paragon Bank: Leasing, Acquisition of Five Arrows Leasing (August 2024)
• NLB: Leasing, Acquisition of Mobil Leasing (July 2024)

Non-FIs:

• XIFU Capital: Automotive Finance, €100 million investment in Knave (June 2025)
• Alsulaiman Group: Automotive finance, Acquisition of Taajeer Finance Company (June 2025)

Trade consolidators:

• Credion: SME lending, Acquisition of CapSearch (June 2025)
• Teylor: Factoring, Acquisition of Grenke’s factoring business (April 2025)
• Orbian: Working capital finance, Acquisition of Roger (January 2025)
• MNT-Halan: Trade finance, Acquisition of Tam Finans (July 2024)

Partnering for scale:

• Mondu: B2B payments, B2B payments / BNPL,  JV with Payin3 (April 2025)
• Mondu: B2B payments, B2B payments / BNPL, JV with Lemonway (April 2025)

Availability of growth capital

Equity / equity & debt:

• Knave: Automotive finance, Successful €100 million investment from XIFU Capital (June 2025)
• Finom: SME finance,  Successful €92.7 million equity investment from General Catalyst (Customer Value Fund)
• Qashio: Corporate credit card and financial management Successful US$19.8 million debt and equity funding round led by Rocketship (May 2025)
• Froda: SME finance, Successful €20 million Series B funding round led by Incore Invest (April 2025)
• Grain: Cross-currency management,  Successful US$33 million Series A funding round led by Bain Capital Ventures (March 2025)
• Lenkie: SME financing, Successful £49 million Series A debt and equity funding round (March 2025)
• Revving: Factoring,  Successful £107 million Series A debt and equity funding round led by DWS (February 2025)
• Flow48: SME revenue¬based financing,  Successful US$69 million Series A debt and equity funding round led by Breega (February 2025)
• Qardy: Marketplace lending, Successful (undisclosed) pre-Seed funding round led by White Field Ventures and Vastly Valuable Ventures (August 2024)
• Finbee Verslui: SME lending, Successful €35 million funding round led by Pollen Street Capital (July 2024)

Debt only:

• Ayan Capital: Automotive finance Successful £25 million Shariah debt funding from Partners for Growth (April 2025)
• Carmoola: Automotive finance, Successful US$100 million debt financing from NatWest (October 2024)

Banks opt for indirect exposure

• NatWest: Automotive finance, Provision of US$100 million debt financing to Carmoola (October 2024)

IPO green shoots?

• JetLend Holding: Crowdlending, €0.66 per share St. Petersburg Stock Exchange IPO (March 2025)

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