Cardiff-based fintech venture Sonovate has surpassed £3.5bn in total funding to businesses since the firm started lending in 2014, after deploying over £1bn in 2022 alone, as it builds on record activity. The business lender, which also has an office in London, provided £1.1bn to firms for the first time last year as rising costs forced businesses to seek finance to manage cash flow and drive growth.
This was a 58% increase on the £700m lent in 2021 and more than double 2020’s figure of £444m. Lending hit £312 million in Q4 2022 alone – up 30% from the same period in 2021. Last autumn, Sonovate surpassed £100m of funding in one month in October and then hit £110m the following month in November.
This was a 22% increase on the previous highest performing month, when £90m was provided to businesses in December 2021. The volume of funding provided to enterprise customers over the course of 2022 increased by 50% year-on-year.
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The firm’s record performance was driven in large part by the expanding adoption of its business finance and technology services by consultancies, recruitment agencies and labour marketplaces globally to allow them to pay contractors on time. To date, more than 33,000 freelancers, contractors and gig workers in 44 countries have received payments from over 3,300 businesses supported by Sonovate. It also onboarded more than 170 new customers.
Enterprise businesses (organisations that generate average annual revenues in excess of £10 million) receive approximately one third of Sonovate’s total lending volume. This significant increase in volume provided to enterprise-level organisations demonstrates the continued growth in the use of contract and freelance labour, and indicates the market potential in the years ahead.
Sonovate is the UK’s leading finance and back-office tech provider to recruitment agencies and consultancies. It also has aspirations to become Wales’ first unicorn business.
The company is now looking to expand its workforce to 230 employees this year to support its continued strong growth in the UK and plans to enter new markets.
Richard Prime, Co-founder & CEO of Sonovate, commented: “Rising costs have presented many challenges, but ambitious businesses are embracing the opportunities to drive growth and increase their competitiveness by securing finance to invest in their workforce.
“With workers demanding new ways of working in response to both the pandemic and the cost of living crisis, and businesses looking to reduce costs where possible, more and more companies are building their teams around a contract-based workforce. Businesses benefit from this approach as they’re more agile to adapt to changing workload or cash flow and, as this trend continues, the need for on-demand funding will continue to soar.”
Sonovate secures its funding from investors globally. The increase in finance deployed to businesses was made possible by the securitisation deal with BNP Paribas and M&G Investments that Sonovate completed in Q3 2022.
This deal added £165 million to Sonovate’s funding structure, increasing its capital efficiency and expanding its customer base, especially in the enterprise space, whilst delivering added flexibility for export financing.
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