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
Deal highlight:
White & Case advised Switzerland-based financing platform Teylor on its acquisition of Grenke’s factoring business.
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
Market commentary:
Santander has delayed the release of its full UK results because of a court ruling on car loans (Financial Times–October 2024).
- 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)
[View source.]
