Clifford Chance

A multitude of geopolitical concerns and the high-interest rate environment have contributed to a challenging fundraising environment for fintech. However, some less-used sources of liquidity are beginning to fill some of the funding gaps. Funding of fintech platforms is increasingly an area of focus for the credit arms of private capital, i.e. financial investors such as private equity and hedge funds.

As part of our recent International Festival of Fintech Daniel Dobrev (Fortress Investment Group) and Huy Nguyen (Teylor Capital) joined us to explore alternatives to traditional financing in light of the current landscape, including the practical steps that fintechs can take to transition from equity funding to more asset-based structures. The panellists discussed why asset-based structures make sense for every originator of financial receivables such as loans or credit cards, but in particular for early-stage ones where the quality of the asset books is typically higher than the creditworthiness of the company itself, giving access to institutional capital at an earlier stage, and flexibility is key.

The panellists also discussed the differences between traditional financing structures and asset-backed structures, the key factors that private capital firms and investors consider when working with fintech platforms and some high-level structuring and legal considerations, as well as some international trends.

It was highlighted by all on the panel that the key benefit of such financing structures is the ability for investors and fintech platforms to partner together to create flexible and bespoke solutions tailored to a platform's wider business direction and specific product features, resulting in a truly dynamic relationship for all those involved in the financing.

Speakers:

• Daniel Dobrev, Director, Speciality Finance, Fortress Investment Group
• Huy Nguyen, CFO and Head of Private Debt, Teylor Capital
• Soojean Choi, Senior Associate, Clifford Chance
• Oliver Kronat, Partner, Clifford Chance