Sonovate is on course to become the first fintech ‘unicorn’ in Wales, according to independent research.
The report by the UK government’s Digital Economy Council and data firm Dealroom.co names the Cardiff-headquartered disruptor as a potential future unicorn.
Sonovate, which provides finance and tech solutions to recruitment agencies and other businesses that engage contractors and freelancers, is the only Welsh business named in the list of future UK unicorns – technology startups that achieve a valuation of $1bn.
Of the 132 potential unicorns named in the report, 83 are based in London. Scotland has four while the North West of England has five.
Sonovate is highlighted as a ‘futurecorn’ alongside the likes of peer-to-peer lending pioneer Zopa, app-based bank Atom Bank, connected car data specialist Wejo and renewable energy supplier Bulb.
Founded in 2013, Sonovate has provided a total of £1.9bn in funding, enabling more than 3,000 businesses in 40 countries to grow and ensuring 25,000 independent workers around the world get paid in full and on time.
It removes uncertainty around the payment of contract workers – giving its clients confidence that funds are in place and payment deadlines can be met.
In the 12 months from March 2020 Sonovate provided more than £500m of funding, including a record £55m in March 2021, as it helped to keep the contract labour market moving during the pandemic – a period when one in four UK workers* turned to freelancing.
Damon Chapple, co-founder and co-CEO at Sonovate, said:
“Despite the flourishing and well-established fintech scene in Cardiff especially, there are currently no fintech unicorns in Wales.
“As someone who grew up in Cardiff and still lives and works in the city, I’m keen to see this change.
“Sonovate becoming the first would be testament to our hard-working and talented team, which has played a huge role in our growth and led to us being recognised as a futurecorn.”
Richard Prime, co-founder and co-CEO at Sonovate, added:
“It’s great to be included in this list, reflecting the increasing demand for solutions like ours.
“We continue to focus on enhancing and expanding our proposition to support the growing number of freelance and contract workers in the UK and internationally.”
Sarah Williams-Gardener, CEO at membership body Fintech Wales, said:
“At Fintech Wales we are all about ensuring Wales is a globally recognised hub for fintech excellence.
“We are delighted when we see the outstandingly strong performance of members like Sonovate being acknowledged. We are proud to applaud Damon, Richard and the team at Sonovate on this achievement, reaffirming the thriving fintech cluster we have here in Wales.
“Sonovate’s support has allowed many businesses to survive and thrive over the past year and is a great example to businesses across Wales of how to achieve scale both domestically and internationally.
“We’re really delighted to see them being highlighted in this report and look forward to their continued success and growth.”
Professor Dylan Jones-Evans, creator of the Wales Fast Growth 50 report and Assistant Pro-Vice-Chancellor and chair in entrepreneurship at the University of South Wales, added:
“The biggest challenge to the growth of unicorns in Wales is the lack of venture capital.
“The latest Tech Nation report showed that venture capital investments have declined by more than 50% in Wales during 2018-20, compared to a 15% growth in the UK, and now account for only 1.6% of the total invested into UK firms.”
In 2019 Sonovate secured £110m debt and equity finance, led by investment house M&G and tech entrepreneurs Michael and Xochi Birch.
This followed the £10m it secured in debt funding from US bank PNC in 2015, and the £20m it raised in Series A and Series B funding rounds in 2016 to grow its product capabilities.