Connect with us

Business & Technology

Mid-sized fintech firms squeezed out as funding tightens

Published

on


Mid-sized fintech firms are disappearing as funding tightens, reshaping the sector around larger platforms and earlier-stage startups.

The pressure is hitting companies that raised Series B to Series D funding, built working products and acquired customers, but have not reached the scale of market leaders. They are caught between investor demands for clearer paths to sustainable revenue and rising operating costs driven by regulation and competition.

During the low-interest-rate period of 2020 and 2021, many fintech groups expanded quickly as venture capital flowed freely. Investors prioritised growth over profitability, and companies hired aggressively to win market share. That backdrop has reversed. Higher rates and weaker risk appetite have pushed investors towards businesses with stronger margins, more predictable income or clear market dominance.

The result is a squeeze on what some investors and founders describe as fintech’s middle tier. Smaller startups can still attract capital for new ideas, while larger companies can rely on scale and established revenue streams. Firms in between often need fresh funding to keep growing, yet face greater scrutiny over whether that growth can deliver acceptable returns.

Recent closures

Several recent UK shutdowns illustrate the pressure on this group. Payments app VibePay entered voluntary liquidation in early 2026 after a proposed acquisition collapsed and investor backing was withdrawn. The business had raised more than GBP £12 million and built a user base around open banking payments.

SmartLayer, focused on AI-based home finance infrastructure, also closed after three years, despite having worked with a major bank on product development. Another consumer fintech, Zero, ceased trading after failing to secure further funding, despite attracting tens of thousands of users.

These businesses had products in the market, active users and, in some cases, institutional relationships. Their closures point to broader structural pressure rather than isolated operational mistakes.

Capital shift

Investment has shifted towards fewer, larger deals. Backers are concentrating capital in companies that can already show scale, profitability or both, leaving less support for firms seeking incremental expansion after their initial product launch and first wave of customer growth.

That has narrowed the viable paths for mid-sized fintech groups. Some grow into larger platforms. Others are sold to bigger players seeking technology, licences or customer bases. A rising number are pushed into restructuring, strategic pivots or closure.

Investor preference has also moved towards financial infrastructure rather than consumer-facing applications. Payment rails, compliance software and financial application programming interfaces are attracting interest because they tend to generate steadier business-to-business revenue and are more deeply embedded in financial systems.

By contrast, many mid-tier fintech companies operate mainly through front-end apps. They compete on user experience and brand, which can require heavy marketing spend and make it harder to defend margins. As capital shifts towards infrastructure, these application-led businesses risk losing investor attention.

Regulatory burden

Regulation is adding to the strain. As fintech companies grow, they face stricter oversight and higher compliance costs. Large operators can spread those costs across bigger revenue bases, while early-stage startups often remain below key regulatory thresholds for longer.

Mid-sized firms are more exposed. They may face the full burden of compliance without the financial resources of larger rivals. That makes scaling more expensive, just as investors demand stronger evidence of efficiency and profit discipline.

Artificial intelligence is intensifying the divide. Bigger firms can use automation across customer service, compliance and risk management to lower costs. Startups can build AI-native products without the legacy cost structures of more established businesses.

Companies in the middle often have existing teams and systems that are costlier to adapt. At the same time, AI is making many consumer-facing features easier to replicate, from budgeting tools to transaction categorisation and financial insights. That weakens businesses that once stood out on product features alone.

Fewer exits

Exit options have also narrowed. Public listings have become less common for this part of the market, partly because weaker conditions make it harder to justify the valuations secured in earlier funding rounds. That has reduced flexibility for founders and investors and increased pressure to pursue trade sales or internal restructuring.

The broader result is a more concentrated market. At one end are large fintech platforms such as Revolut and Wise, which continue to expand their product ranges and customer bases. At the other end are newer startups testing niche ideas or targeting specific market gaps.

Between those poles, the number of viable independent companies is shrinking. Fintech innovation continues, but the room for a business to remain sustainably mid-sized is getting smaller.

The sector is becoming more polarised, with fewer companies able to stay in the middle.



Source link

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Business & Technology

Major UK restaurant chain rescued amid £37m debt administration

Published

on



Las Iguanas, which runs 44 sites across the country but none currently in Oxfordshire, had warned it would “inevitably enter administration” if the deal was not sanctioned.

It previously operated an Oxford branch in Park End Street, which closed back in June 2017, leaving the county without any of the group’s Latin American-themed restaurants.

The chain is owned by Iguanas Holdings Ltd, a subsidiary of The Big Table Group, which also sits behind several familiar high-street brands including Frankie & Benny’s, Bella Italia and Banana Tree.

READ MORE: Staff ‘gutted’ as UK giant cuts thousands of jobs amid £800m administration

In May, the company confirmed it had gone to court to seek approval for a restructuring plan intended to deal with its heavy debt pile.

At the time, bosses said that, without the move, the business would not be able to continue trading and would be forced into administration.

The court has now backed the plan, allowing around £37 million of debts to be cancelled or compromised and giving the chain a financial lifeline.

As part of the rescue, The Big Table Group is injecting £3 million of new funding into the business as part of a wider turnaround strategy.

READ MORE: UK food supplier giant falls into administration owing £1.5m debt

The deal also paves the way for reduced rents at certain sites and agreements with landlords on some outstanding sums, easing pressure on the company’s day‑to‑day cash flow.

Mr Justice Meade approved the scheme at a hearing in London, clearing the way for the restaurant operator to avoid collapse and continue trading.

The group has stressed that the restructuring relates only to the legal entity that holds the chain’s property leases and related costs, and does not involve the wider Big Table business, its suppliers, its employees or any of its other brands.

All 44 restaurants are continuing to operate as normal while the rescue plan is implemented, with the company presenting the deal as a way to secure the long‑term future of the brand and safeguard sites and jobs.





Source link

Continue Reading

Business & Technology

Ssen Transmission joins European cyber security network

Published

on


SSEN Transmission has joined the European Network for Cyber Security as an Information & Knowledge Sharing member, bringing a major UK electricity transmission operator into a European cybersecurity network for critical infrastructure.

The membership gives SSEN Transmission access to ENCS research, technical documentation and knowledge-sharing with European transmission and distribution system operators. Key areas include testing, operational technology security operations and the development of cybersecurity practices for grid infrastructure.

SSEN Transmission operates the high-voltage electricity transmission network across the north of Scotland. Its network covers more than a quarter of the UK’s land mass and includes substations, overhead lines, underground cables and subsea cables.

The decision comes as cyber threats to essential services face growing scrutiny from governments and operators. The UK National Cyber Security Centre reported 204 nationally significant cyber incidents in the year to August 2025, up 130% on the previous year, including cases affecting critical infrastructure.

Shared concerns

ENCS is a non-profit membership organisation that works with critical infrastructure groups and security specialists across Europe. Founded in 2012, it supports members through applied research, technical security requirements, testing, education and training.

Its network includes transmission system operators, distribution system operators and regulators. By joining as an Information & Knowledge Sharing member, SSEN Transmission is entering a forum focused on common cybersecurity issues across energy networks, rather than a bilateral arrangement with a single partner.

That matters because electricity operators increasingly face similar challenges across borders, especially in the operational technology environments that underpin power networks. Utilities must also respond to a regulatory climate in the UK and EU that places greater emphasis on secure systems and formal cybersecurity practices.

“Cybersecurity is a shared challenge across Europe’s energy sector, and collaboration is fundamental to staying ahead of evolving threats,” said Anjos Nijk, Managing Director of ENCS.

“Across both the UK and EU, regulatory frameworks place clear requirements on investment in robust security practices and secure systems. We are pleased to welcome SSEN Transmission to ENCS and strengthen cooperation across the sector,” Nijk said.

Cross-border work

For SSEN Transmission, the arrangement broadens the expertise available to its operational technology and cyber teams. The company is in the middle of a wider investment and build-out programme tied to the electricity network in northern Scotland, where infrastructure upgrades are closely linked to reliability and the transmission of power over long distances.

Operational technology security has become a particular concern for energy operators because these systems control physical assets and industrial processes. Disruption in these environments can have consequences beyond data loss, affecting electricity flows and service continuity.

Participation in the ENCS network will help the UK operator look beyond domestic peers and compare approaches with companies across Europe. That includes exchanging practical experience on security operations and learning from work already carried out elsewhere in the sector.

“Joining ENCS provides an opportunity to collaborate with peers across Europe at a time when regulatory expectations around energy network cybersecurity continue to evolve. With the growth journey that SSEN Transmission is undertaking, it is vital that we look beyond our UK peers to ensure we are tapping into best practice across the continent to solve the shared problems and escalating cyber threats we face as operators of essential services,” said Iain Dougan, Head of Operational Technology and Cyber at SSEN Transmission.

The announcement also points to closer links between UK and European operators on cybersecurity despite differing national systems and regulatory structures. Grid operators often face the same technical risks in industrial control systems, supply chains and field equipment, making sector-wide exchanges valuable even when assets remain nationally owned and managed.

For ENCS, adding a large British transmission operator extends its reach into a strategically significant part of the European energy system for electricity transmission and offshore network development. For SSEN Transmission, the membership places it inside an established network focused on the cybersecurity of critical energy infrastructure.

The backdrop remains a rise in serious cyber incidents affecting organisations that run essential services, with the UK recording 204 nationally significant cases in the year to August 2025.



Source link

Continue Reading

Business & Technology

Oxfordshire village shop and cafe finalist in national award

Published

on


Kirtlington Community Shop and Cafe is currently under construction, after a community share offer running since 2020 raised the funds for the purpose-built business in the village west of Bicester.

Already the project is gaining recognition, as it has been shortlisted as a finalist for the Rural Community Business Awards 2026.

READ MORE: Oxford congestion charge hits hospitality hardest, survey shows

The annual awards, sponsored by Lands Improvement and hosted by Woodstock-based charity Plunkett UK, have named the rural businesses in the ‘One To Watch’ category.

Kirtlington Community shop and cafe ground breaking eventConstruction of Kirtlington Community Shop and Cafe is currently underway (Image: Amanda Deadman Photography)

Celia Hawkesworth, chair of the management committee for the new shop, said: “We’re thrilled to be one of the finalists in the ‘One To Watch’ category.

“We’ve been working hard on this project since 2020, and it’s an honour to be recognised alongside the best community-owned businesses when we’ve barely got started.

“Exciting times are ahead as we work towards opening our new shop and cafe later in the summer.”

Kirtlington Community Shop and Cafe under constructionConstruction is underway at Kirtlington Community Shop and Cafe (Image: Amanda Deadman Photography)

Locals came together after the village’s shop closed in 2020, and since then successfully raised £233,500 towards the £275,000 target funds needed for the project.

This includes £180,000 raised through a community share offer, meaning villagers have personally invested in the scheme.

READ MORE: Police at ‘unauthorised encampment’ of caravans in Oxford park

A ground-breaking ceremony was held on April 10 this year to mark the beginning of construction of the much-wanted community shop and cafe.

Kirtlington Community shop and cafe ground breaking eventThe ground-breaking event of Kirtlington Community Shop and Cafe in April (Image: Amanda Deadman Photography)

The new shop and cafe, designed to bring services ‘back to the heart of the community’, will be housed in a purpose-built, energy-efficient building next to the village hall.

Plunkett UK, a national charity which supports people in rural areas to set up and run a wide range of businesses in community ownership, provided the village group with ‘invaluable’ advice, according to the committee chair.

The charity’s vision is to create resilient, thriving and inclusive rural communities by extending the number of democratic, community-owned business from the more than 850 already operating in the UK.

Kirtlington Community Shop and Cafe under constructionConstruction is underway at Kirtlington Community Shop and Cafe (Image: Amanda Deadman Photography)

Its rural community business awards celebrates businesses that contribute to their areas across nine different categories, from the ‘going green’ award to ‘team spirit’ and ‘young person’.

READ MORE: Listed village pub near Banbury up for sale after 13 years

Sarah Benn, Relationships Team Leader at Plunkett UK, said: “It has been inspiring to see so many people nominate their local community-owned businesses, truly emphasising the significant role they play in their communities.

“We celebrate the considerable impact each one is making it its local area and we are looking forward to next month’s awards event when the winners are announced.”

The award ceremony will take place at The Royal Society of Chemistry in London on Thursday, July 2.

The Kirtlington Community Shop and Cafe is expected to open later in the summer.





Source link

Continue Reading

Trending