Fintech is once again the UK’s best-funded startup sector after climate tech secured the most investment in 2023.

In the first quarter of 2024, UK fintech companies raised $1.4bn across 73 rounds, according to data from Dealroom and HSBC Innovation Banking.

Fintech funding rounds over the period include £340m raised by challenger bank Monzo and the £18.8m raised by Manchester-based AccessPay.

Fintech has historically been one of the UK’s leading technology sectors. However, last year climate tech startups accounted for nearly a third of all investment raised.

More broadly, startup funding levels stabilised in the first quarter, with total levels of investment standing at $3.9bn – the highest in Europe. However, it remains down on the $4bn raised in the first quarter of 2023 and significantly lower than the $12bn peak in the first quarter of 2022.

It follows declining levels of startup investment since the second half of 2022 as macroeconomic factors, such as rising interest rates, caused investors to take a more cautious approach.

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Traders piled into shares of Rent the Runway on Thursday, sending the shares up by more than 220% after the apparel rental firm said it was betting on artificial intelligence tools to power its growth in the current year.

More than 34 million shares had changed hands, far surpassing the usual calm trading in a stock that coming into Thursday only had a market value of $26.27 million.

But numerous companies have kicked off rallies in their stocks over the last year by talking up their plans to use artificial intelligence to boost their businesses - and Rent the Runway is now the latest to join that frenzy.

The company has forecast revenue to grow between 1% and 6% in the current fiscal year, compared with a 0.6% rise in 2023, and expects breakeven free cash flow.

"Rent the Runway has just become the poster girl for investors that believe AI can help small business and not just large behemoths," said Michael Ashley Schulman, chief investment officer at Running Point Capital Advisors.

Shares of the company were last up 138.7% at $17.82, giving it a market capitalization of about $63.3 million.

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Fashion company Shein has confidentially filed to go public in the United States, according to two sources familiar with the matter, in what is likely to be one of the most valuable China-founded companies to list in New York.

Goldman Sachs, JPMorgan Chase and Morgan Stanley have been hired as lead underwriters on the initial public offering (IPO), and Singapore-based Shein could launch its new share sale some time in 2024, the sources said.

Shein has not determined the size of the deal or the valuation at IPO, the sources said. Bloomberg reported earlier this month it targeted up to $90 billion in the float.

The luxury e-tailer saw modest growth as aspirational luxury consumers cut back on nonessential spending. In its first quarter of the year that ended in September, Mytheresa’s gross merchandise volume — a measure of goods sold on the platform — rose 3 percent year over year to €204 million ($224 million), against a 13 percent increase in the previous quarter.

The company’s profit margins also fell as price-conscious consumers flocked to competitors offering steeper discounts. Mytheresa’s gross profit margins slipped 7 percentage points in the first quarter, and its profits on the basis of adjusted earnings before interest, taxes, depreciation and amortisation dropped more than 100 percent.

Mytheresa said it expects sales and profits for the full fiscal year ending in June to come in at the lower end of its previous guidance, with 8 percent year-over-year sales growth and 3 percent EBITDA profit margins. Investors appeared spooked about Mytheresa’s growth prospects. The company’s stock dropped more than 5 percent following its earnings release.

PlayGround, a Gilbert, AZ-based provider of a healthcare fintech payments platform, raised $19.7M in Series A funding.

The round was led by SixThirty with participation from Rally Ventures, IA Capital Group, FCA Venture Partners and Plug and Play Ventures. 

The company intends to use the funds to bolster its expansion into hospitals and health systems, building on its entry in the ambulatory market, as well as grow its senior leadership team.

Led by CEO Drew Mercer, PayGround provides a healthcare payments platform that streamlines the payment experience for providers and patients. The mobile app enables patients to manage, track and pay all medical bills in one secure place. For medical providers, the modernized payment platform reduces costs, simplifies processes and boosts patient and employer satisfaction.

Lassie has now raised €23 million in Series B funding led by Balderton Capital. Previous investors including Felix Capital, Inventure, Passion Capital and Philian (H&M chair Karl-Johan Persson) also participated in the round. That means Lassie has now raised a total of €36.5 million.

The funding will be used to develop Lassie’s team and products, such as its in-app sale of health products for pets, and expand beyond its core bases of Germany and Sweden. The app features online courses, and other information on preventative health for pets. Owners who complete the courses receive rewards every insurance year, from lower premiums to loyalty points for its online store.

OQC, a Reading, UK-based quantum compute-as-a-service (QCaaS) company, raised $100M in funding.

The round was led by SBI Investment with participation from Oxford Science Enterprises (OSE), University of Tokyo Edge Capital (UTEC), Lansdowne Partners, and OTIF, acted by manager Oxford Investment Consultants (OIC).

The company intends to use the funds to further enhance its R&D sector and its ability to bring enterprise ready quantum to businesses globally.

Online luxury retailer Farfetch's founder José Neves is looking to take the company private after a troubled New York Stock Exchange listing, the Telegraph reported on Tuesday.

Neves is said to be working with advisers at JPMorgan, the report said, adding that he retains a 15% stake but holds 77% of the voting rights through a dual-class share structure.

Shares of the company edged 20% higher following the news. The stock has fallen about 64% so far this year.

Global Content Operations Strategy and Services leader ICP has announced its acquisition of Team 6ix, a UK-based Martech and Content Operations consulting firm. The move joins Team 6ix's highly respected team of martech strategists, consultants and experts with ICP's resources and expertise.

"This marks the start of ICP's next exciting phase of growth," said ICP CEO Christopher Grakal. "The addition of Team 6ix strengthens us at a key moment: global businesses increasingly recognize new opportunities to unlock the full value of their marketing and commerce assets, across their content ecosystem. That means more than just delivering creative martech strategies and solutions. It means dedicating the right people to serve as their partners, as well as the right automation and AI solutions. ICP's people, joined by Team 6ix's, form a world-class team of experts, strategists and solution-builders." 

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YFM Equity Partners (YFM) has held the final close of its Buyout Fund III, with £95.5 million of committed funds and a high percentage of new entrepreneurial investors in place.

The fund exceeded its original £80 million target and achieved a first time YFM investor rate of 33%. This close also marks the highest amount raised to-date by a YFM Buyout Fund.

Buyout Fund III will typically invest between £5m and £15m per transaction into businesses with strong growth potential located across the UK regions.

YFM’s latest fundraise success comes during a significant period of growth for the PE firm. The firm now manages funds in excess of £630m.