Cardiff fintech Sonovate surpasses £3.5bn in corporate lending

Cardiff-based fintech venture Sonovate has passed £3.5bn in total funding to businesses since the firm started lending in 2014, having deployed over £1bn in 2022 alone as it builds on record activity. The business lender, which also has an office in London, provided £1.1 billion to businesses for the first time last year as rising costs forced businesses to seek funding to manage cash flow and drive growth.

This was a 58% increase on the £700m lent in 2021 and more than double the 2020 figure of £444m. Lending reached £312m in Q4 2022 alone – a 30% increase on the same period in 2021. Last autumn, Sonovate passed £100m in one month in October, then hit £110m the following month in November.

This was a 22% increase on the previous top-performing month, when £90m was provided to businesses in December 2021. Funding volumes to corporate clients increased by 50% year-on-year during 2022.

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The firm’s record results were largely driven by the growing use of its business finance and technology services by consultants, recruitment agencies and labor 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 gained more than 170 new customers.

Enterprise businesses (organisations generating average annual revenues in excess of £10m) receive around a third of Sonovate’s total lending volume. This significant increase in volume delivered to enterprise-level organizations demonstrates the continued growth in the use of contract and freelance work, and indicates the market potential in the years ahead.

Sonovate is the UK’s leading finance and back office technology provider to recruitment agencies and consultancies. It also has ambitions 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 and CEO of Sonovate, commented: “Rising costs have presented many challenges, but ambitious businesses are embracing the opportunities to drive growth and increase competitiveness by securing funding 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 wherever possible, more and more companies are building their teams around a contract workforce. Businesses benefit from this approach as they are more agile to adapt to changing workload or cash flow, and as this trend continues, the need for on-demand funding will continue to increase.”

Sonovate secures its funding from investors globally. The increase in funding distributed to businesses was made possible by the securitization agreement with BNP Paribas and M&G Investments that Sonovate completed in Q3 2022.

This deal added £165 million to Sonovate’s funding structure, increased capital efficiency and expanded its customer base, particularly in the corporate space, while providing increased flexibility for export financing.

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