UK-based ThinCats, an alternative finance provider dedicated to funding growing and ambitious mid-sized SMEs across the UK, announced on Monday that it has raised £100M (approx €118.73M) in additional funding from an extension of Insight Investment partnership.
The additional capital for the startup follows earlier participation from Insight Investment managed funds in September 2018. Insight Investment’s managed funds are part of a panel of senior investors, including Barclays and Citi, which is deployed alongside ThinCats’ own capital.
Shaheer Guirguis, head of secured finance, Insight Investment, says, “Insight has partnered with ThinCats for more than three years and seen it grow from strength to strength. During this time, and despite the substantial economic impact caused by the Covid pandemic, our investment capital has continued to provide valuable support to UK SMEs while delivering good risk-adjusted returns to our investors.”
ThinCats claims that the proceeds will be deployed as a senior finance line to support SMEs across the UK.
Ravi Anand, MD at ThinCats, says, “The new investment will provide much needed additional support for mid-sized SMEs as they invest in their post-pandemic growth strategies. Adding this new investment to the existing capital of our investor panel, alongside our own funding, means we have £650M currently available to deploy in support of businesses across the UK.”
Funding solutions for mid-sized UK SMEs
According to ThinCats, there are about 400,000 mid-sized SMEs accounting for more than 25 per cent of the UK’s GDP. However, they often struggle to access the capital they need. ThinCats exists to fill this gap by opening up new sources of long-term funding to help these businesses thrive.
Founded in 2010 by Christopher Rothschild and Kevin Caley, ThinCats combines data analytics with traditional lending skills and a regional network of business finance specialists, to provide funding from £1M up to £15M for businesses looking to grow organically and/or through acquisition.
The company says, “Although we offer asset-backed loans, cashflow lending accounts for approx 75 per cent of new funding and is particularly suited to high growth businesses.”
In order to create bespoke funding structures, ThinCats needs to assess credit risk. It does this by using a proprietary risk model, PRISM, alongside the skills in traditional underwriting.
PRISM is powered by big data, comprising over two billion data points from every UK mid-sized SME that has traded since 2007. Using more than 200 different data metrics from filed financial accounts with timely behavioural trends, PRISM is a tool that gives potential borrowers an early indication of price and potential loan size.
According to a report from January 2022, the company has provided a record £318M of funding to support mid-sized SMEs in 2021. In total, it claims to have lent more than £1.2B to businesses across the UK.
ThinCats CEO Amany Attia says, “As Covid restrictions lifted and business confidence strengthened during 2021, borrower demand switched from the short-term liquidity needs of 2020 to funding strategic growth plans, both organic and through acquisitions. Using a combination of the CBILS and RLS government-backed schemes and BAU lending, we were delighted to provide a record amount of funding to existing and new borrowers.”