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Satago Financial Solutions, or ‘Satago’, a subsidiary of TruFin (TRU ), a holding company for lenders and early payment providers, announced today that its platform has been selected by Lloyds Bank to support the provision of invoice factoring solutions to Lloyds Bank customers.
Specifically, Lloyds intends to enter into a commercial agreement to licence the software platform for its Single Invoice Finance and whole of book Invoice Factoring customers.
This morning, it was announced that Satago and Lloyds Bank have signed a letter of intent together and are working towards finalising a commercial agreement in the coming months.
Under the terms of the agreement, Satago said its platform will be utilised to introduce a new digitised proposition designed to help Lloyds Bank further support businesses in the UK.
Satago expects to be paid a recurring fee for each customer which utilises the platform, as well as one-off implementation fees, with the final terms subject to commercial negotiation.
Ahead of signing the commercial agreement, Lloyds Banking Group has completed a £5 million investment of new equity capital in Satago, at a pre-money valuation of £20 million.
‘All parties believe that the commercial agreement will be transformational for Satago and has the potential to deliver significant equity value uplift for Satago,’ TruFin told investors today.
TruFin announced that it has agreed to vary the terms of an existing £3m loan to Satago ‘so that it is convertible into equity capital in Satago at the same valuation as the LBG investment or, if a further funding round takes place, the valuation implied by the funding round.’
Assuming conversion based on the £20m valuation, and assuming LBG does not subscribe for its pro rata entitlement to shares, TruFin would hold around 68% of Satago following this.
In addition, Ben Stephenson has been appointed to the Board of Satago as Managing Director and Head of Specialist Client Solutions at Lloyds Bank Commercial Banking.
Under these roles, Stephenson will be responsible for the teams who provide SMEs with Invoice Finance, Trade, Payments, Asset Finance and Merchant Services solutions.
As Satago rolls out its platform to a growing pipeline of leading finance providers, the Board told investors that it believes there are ‘multiple value accretive developments to follow.’
James van den Bergh, CEO of TruFin, said: “We welcome the Bank as a shareholder in Satago and are excited about the value that Satago will create through this landmark commercial and strategic partnership. We continue to believe there is meaningful value to be unlocked from our portfolio of companies and thank shareholders for their ongoing support.”
Sinead McHale, Chief Executive Officer of Satago, commented: “This announcement is the start of the next stage of our relationship with Lloyds Bank and is testament to the innovative and intelligent use of data and technology which makes our proposition best in class.”
She added: “We are reinventing invoice finance as a mainstream product - making it available to all UK businesses regardless of size or sector. We are extremely proud to have secured such a landmark partner to help with this endeavour and delighted to welcome them as an investor in the business. Satago has a significant pipeline of further opportunities allowing an ever-growing number of SMEs in the UK to benefit from its award-winning products.”
Ben Stephenson, MD and Head of Specialist Client Solutions at Lloyds Bank Commercial Banking, said:“Extending our partnership with a leading Fintech like Satago represents a truly exciting opportunity for LBG and our clients. Combining Satago’s technology with LBG’s reach and focus on Helping Britain Prosper has created a market leading proposition that provides clients with much needed working capital management and cash flow optimisation tools.”
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