Elliott-backed Chetwood hires Rothschild over £100m cash raise

Credit:  HANNAH MCKAY

Chetwood Financial, a British fintech start-up backed by New York hedge fund Elliott Advisors, has hired bankers to sound out investors for a blockbuster £100m funding round.

Chetwood is understood to be in early talks with backers over the potential round, which would provide a major boost to the company’s growth.

Elliott, founded by billionaire activist investor Paul Singer, is Chetwood’s majority shareholder, and has so far invested £100m in equity in the firm, as well as providing it with £100m in debt financing.

The Sunday Telegraph understands that Chetwood has hired bankers from Rothschild to engage with new investors over a potential round, although discussions have not yet been formalised. Any new backers would have to be approved by Elliott. Sources stressed Chetwood may ultimately decide against raising new cash. 

The challenger bank, which was founded by former HSBC banker Andy Mielczarek, has been working to develop products specifically targeted to those under-served by big banks. It has, for example, launched loans for those with poor credit histories that, over time, improve their credit scores. It also offers fixed rate savings accounts. 

Any new cash that it raised would be expected to go towards lending growth, as well as further product launches. 

Chetwood declined to comment.

Should Chetwood decide to go ahead with the round, it would come as the latest of a series of fintech firms tapping investors, with GoCardless and Monzo having recently closed rounds, and Starling said to be hunting for £200m in capital.

The billionaire co-founder of payments firm Stripe, John Collison, last month told the Telegraph he was "very bullish” on the prospects for UK fintech firms, which he said would flourish after Britain left the EU. 

The Government is currently reviewing what measures could be introduced to support the fintech sector, tasking former Worldpay chief executive Ron Kalifa to head up the work. According to government estimates, it is worth around £7bn to the UK economy.