Pictured: Ferovinum founders Mitchel Fowler (left) and Daniel Gibney (right)
The completion of a £100 million deal has been announced today (19th July) between fintech Ferovinum, NatWest and BCI Capital, which is set to transform the way banks and financial institutions deploy capital into the historically difficult-to-bank UK wine and spirits sector.
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In the first deal of its kind, NatWest will lead portfolio funding arrangements for Ferovinum’s wine and spirits inventory finance platform, which leverages unique supply chain technology to enable more flexible and efficient funding for businesses within the sector. It also provides banks and financial institutions with a more risk-managed and cost-efficient way to support the industry.
The £100 million deal comprises an £80 million phased transaction provided by NatWest, with the remainder being contributed by Ferovinum equity investors and UK credit manager BCI Capital, Ferovinum’s primary portfolio funding partner since 2021.
The transaction structure also facilitates the addition of other banks and financial institutions to accommodate deployment beyond the initial £100 million via syndication. This will unlock larger-scale capital provision to wine and spirit businesses, as well as improving access to capital in a sector that has historically been hindered by its niche classification, fragmentation and long maturation times.
London based Ferovinum was founded in 2018 by investment banking and corporate finance experts Mitchel Fowler and Daniel Gibney, who share a passion for the wine and spirits world. The company’s proprietary technology is favoured by a growing list of over 30 businesses - distilleries, wineries, merchants, bottlers and brand owners – for the agility, speed and partnership model it offers. To date the platform has funded the equivalent of over 5 million bottles for a diverse range of clients: from market disruptors such as the sustainability-focused canned wine brand The Uncommon; to storied global whisky brands such as The Glenturret.
Ferovinum Founder and CEO Mitchel Fowler believes that this deal will pave the way for a new, technology-driven era of investment in the sector, whilst addressing the huge appetite amongst banks to seize opportunities and support dynamic wine and spirits business in the UK.
Mitchel commented: ‘We are thrilled to have NatWest on board as our first banking partner in a deal that marks a real step-change in how capital is deployed into the wine and spirits industry. Ferovinum’s technology has been custom built to overcome the barriers that have previously stopped institutional capital reaching this sector, giving banks the right tools to get involved. NatWest immediately recognised our platform’s potential, and we have been impressed by their ability to leverage industry expertise and a shared commitment to innovation and supporting small and medium sized companies as they grow.’
Andrew Barraclough, Head of Asset Based Lending Origination, NatWest said: ‘Stable access to credit is crucial to the success and growth of SMEs and their positive impact on the economy. Our financing package for Ferovinum is another example of our commitment to removing barriers to enterprise, allowing them to grow. Ferovinum shares our commitment to serve SMEs in the UK, and we are looking forward to working together with our new customer in the future.’
Sam Kemp, CEO of BCI Capital, added: ‘BCI partners with innovators who, like Ferovinum, bring tech-enabled financing solutions to address underserviced areas of the market. Having worked with the Ferovinum team since 2021, it’s been great to witness first-hand the business broadening its reach into the market. We’re excited to continue to partner with Ferovinum – now alongside NatWest – as the business moves to its next phase of growth.’
Ferovinum confirmed that the £100 million will be deployed into a wide range of wine and spirits enterprises over the coming months. It will also support the ongoing evolution of their platform and an ambitious UK and global expansion plan.
Ferovinum is a first of its kind funding platform designed exclusively for the wine and spirits industry. Its software integrates with the supply chain, logistics and ecommerce infrastructure of the industry, providing users with fast, flexible and cost-efficient access to funds at any point in the business process - from production, through to distribution and retail fulfilment.
Ferovinum has created a ring-fenced platform that holds assets during production, storage and distribution, allowing companies to convert their maturing stock into a just-in-time asset. This flexibility allows businesses to access capital when they need it, reducing their liquidity risk and reliance on payment terms, as well as protecting profitability should supply chain disruptions occur. Ferovinum clients can also take advantage of supply chain and inventory management tools to access automation and reduce the operational burden of getting their products into the hands of consumers.
For banks and financial institutions, Ferovinum’s technology provides a risk-managed and cost-efficient way to deploy capital into this traditionally hard to bank sector, where high levels of fragmentation have led to a historic lack of access to working capital. It uses structures adopted by investment banks in commodity markets to deploy a broad range of capital from credit funds, banks and other institutions.
Ferovinum was founded in 2018 by Mitchel Fowler, an experienced investment banker and commodity supply chain expert; and Daniel Gibney, who has years of experience in corporate finance, debt restructuring and hospitality. Based in London and Scotland, Ferovinum has a growing team of specialists in finance, tech, wine and spirits, led by Chief Technology Officer Ho Yin Lai, Head of Growth Max Noble and Director of Spirits Gregor Mathieson.
NatWest is a relationship bank for a digital world. We champion potential; breaking down barriers and building financial confidence so the 19 million people, families, and businesses we serve in communities throughout the UK and Ireland can rebuild and thrive. If our customers succeed, so will we. We operate through a number of well-known banking brands. We have a presence on the high street through our customer facing brands - NatWest, Royal Bank of Scotland, and Ulster Bank. We are the largest supporter of UK business, banking around 1 in 4 businesses across the UK. Our private banking customers know us through their relationships with Coutts, Child & Co and Drummonds. And NatWest Markets help our corporate and institutional clients manage their financial risks and achieve their short and long-term financial goals.
About BCI Capital
BCI Capital is an alternative investment manager, providing debt capital to disruptive seed and growth stage alternative finance businesses. Part of Blenheim Chalcot, the UK’s leading digital venture builder, BCI supports innovators who are disrupting funding in both established and emerging asset classes.