SoftBank has invested $800 million in a fintech advised by former UK Prime Minister David Cameron

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SoftBank has invested $800 million in Greensill Capital in a much-needed vote of confidence for the UK’s financial sector, which has been hampered by continued Brexit uncertainties, per a press release.

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Greensill, founded by former Morgan Stanley and Citigroup banker Lex Greensill and advised by former UK Prime Minister David Cameron, provides supply chain funding to businesses across 60 countries. SoftBank’s investment via its $100 billion Vision fund, one of the world’s largest tech investment vehicles, values the startup at $3.5 billion, per Bloomberg.

Here’s what it means: Greensill’s made a major mark on supply chain financing — and SoftBank’s cash and know-how is likely to strengthen its position.

Greensill is a key player in the niche business of supply chain financing. The startup acts like a buffer between a business and its clients, allowing businesses to access greater working capital and giving client firms more time to pay off their debts. Businesses looking to secure financing from Greensill apply online, with the process completed in minutes. The startup charges a fee for its services as well as interest for providing the finance, underwritten from its own balance sheet and through its partnerships with institutional investors. Since its launch in 2011, the firm has unlocked $60 billion in working capital, making it the second-biggest player in global supply chain financing, behind only investment bank behemoth Citi, per The Australian.
The startup has earmarked the latest funds for geographical expansion and technology development.Greensill will accelerate its expansion into Brazil, a market it’s already present in, and enter new countries including China and India. Given its success already, and with a major backer like SoftBank on board, these efforts will likely help the company continue its strong growth.

The bigger picture: SoftBank’s investment is vital news not just for Greensill, but for the UK as a whole.

SoftBank’s investment in Greensill is the second major bet it’s made on a UK fintech this year. SoftBank pumped $390 million into neobank OakNorth earlier this year. These investments are welcome news for the UK’s fintech sector amid continued uncertainty over the effects of Brexit. Fintech funding has seemingly been insulated from negative impacts so far: The UK remains Europe’s fintech capital, with startups in the country capturing 56% of the region’s total fintech investment across 2018, per Accenture.

However, the uncertainty surrounding Brexit is beginning to impact some players’ allure. For instance, we reported yesterday that BBVA has forgone its option to acquire neobank Atom, and concerns over the lack of clarity regarding the terms of the UK’s exit from the EU were key in driving that decision. Given these worries, SoftBank’s investments could have a much more significant impact, beyond the startups it’s investing in, by giving the UK’s fintech sector a rounding endorsement.

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