The Bank of London has stressed that its investors remain confident in the business despite its ongoing tax troubles after the firm announced it had raised £42 million in fresh funding.
The embedded banking and deposit-as-a-service business said it completed the raise during the month of August in an over-subscribed funding round led by Luxembourg-based Mangrove Capital Partners.
CEO Stephen Bell said: “Our success in completing this £42 million funding round underscores investor belief and confidence in our vision, and I am excited to take over leadership of The Bank of London as it continues to grow.”
“The Bank of London’s ability to close an over-subscribed £42 million funding round speaks to the confidence investors have in its leadership and unique model,” added Mark Tluszcz, CEO of Mangrove Capital Partners, an early investor into tech firms Wix and Skype.
Bank of London investors were stunned on Friday after it was revealed the firm had received a winding up petition from HMRC, a manoeuvre used by the government body when it is unable to collect unpaid taxes from a business. The news came just days after the firm’s founder, Anthony Watson, announced he would be stepping down as CEO to transition to a new role as senior adviser.
The company’s advisers worked through the weekend to shore up investor and customer confidence, including meeting with the Bank of England on Sunday to discuss its governance practices, according to the Financial Times, which also reported that Bank of London directors had been unaware of the unpaid taxes to HMRC.
The Bank of London has insisted that it is in a strong capital and liquidity position, adding that the winding up petition was down to an “administrative” delay and the tax owed had now been paid.
The firm said it had also hit two milestones in August: Customer deposits passed £500m, having more than
doubled since the start of the year, and are on course to exceed £1 billion by the end of the year, while the bank successfully onboarded its 100th institutional client and has over 4,500 clients in total.
Founded in 2021, the Bank of London is the UK’s newest clearing bank and one of only six established in the last 250 years. The fintech business has close ties to the new Labour administration in the UK, with Labour peer Lord Mandelson on its board and founder Watson a previous chair of the party’s Business and Enterprise Advisory Council.
Last year, the company made a bid to rescue the UK arm of Silicon Valley Bank after the collapse of its US parent, but lost out in favour of a takeover by HSBC.