PassFort, headquartered in London, was founded by Donald Gilles and Henry Irish in 2015. The company’s compliance platform provides automated ‘Know Your Customer’ (“KYC”) screening, Anti-Money Laundering (“AML”) services and facilitates automated risk monitoring for regulated financial firms.
Moody’s is a global risk assessment firm, headquartered in New York. Its data and analytical solutions provide transparency to decision-makers across the world, empowering individuals to take more informed and effective business actions. The acquisition of PassFort supports Moody’s previous investments in KYC and AML capabilities.
Shard Credit Partners provided a venture debt facility of £3.5 million to PassFort in May 2021, in support of capital expenditure to promote business growth. In the past six months, the company’s workforce has grown by the addition of more than 30 staff, taking the total number of employees working in PassFort to 72. Further to the company’s growth, it has now been acquired by a multinational corporation. The Shard Credit Partners’ loan to PassFort represents the asset manager’s first ever investment from its new Venture Debt Fund I, which is holding a first close later this month.
Will Chappel, Head of Venture Debt at Shard Credit Partners said: “I am delighted to announce that our first investment in the venture debt fund is also our first exit, after only six months, generating an IRR of 249.2% and 1.8x multiple on invested capital. We are thrilled for PassFort and its excellent management team. This deal is a great example of the strength of the UK Fintech sector, and we will continue to support UK based Fintech and Software companies with our innovative first to market UK tech venture debt strategy”.
Donald Gilles, CEO and Co-Founder of PassFort, commented: “We are, of course, delighted to become part of Moody’s, as we are joining a company with market leader status and more than 100 years of expertise in helping customers to manage risk. Together we will expand our automated KYC offerings and serve global customers with innovative RegTech solutions. But, we are equally grateful for the funding and support that Shard and our other investors have given PassFort – they believed in our vision and provided the capital and support to help us realise it.”
Alastair Brown, CEO of Shard Credit Partners said: “PassFort has been a remarkable first investment for our new UK tech venture debt strategy, which we launched earlier this year. This is a ringing endorsement for UK tech venture capital and we are tremendously excited to be supporting this rapidly growing and important part of the UK economy through our inaugural venture debt fund, which is entirely focused on UK B2B SaaS and Fintech investments, the only one of its kind.”
Legal advice to Shard Credit Partners was provided by Orrick LLP, led by Partner Scott Morrison and supported by Hridi Chowdhury.
About Shard Credit Partners:
Shard Credit Partners is an alternative investment fund manager focused on private credit strategies in the UK lower mid-market. Its funds seek to generate superior risk-adjusted returns from conservatively structured senior secured credit investments with equity upside. Fund strategies include SME direct lending and tech-focused venture debt.
In January 2021, William Chappel joined Shard Credit Partners to launch the Venture Debt strategy which will be focused on senior secured loan investments in the Software as a Service (“SaaS”) and Fintech markets across the UK tech sector.
Shard Credit Partners is currently investing from its debut direct lending fund Shard Credit Partners Fund I, which held a first close in October 2017 at £90.2 million. Shard Credit Partners plans to hold a first close on its second UK lower mid-market direct lending fund during Q1 2022.
Shard Credit Partners invests in solid small to medium sized businesses with strong management teams, supporting them by providing transformative growth capital and event driven financing in support of innovation, growth, and expansion. The funds invest in businesses throughout the UK.
The firm has robust ESG policies. In particular, it is a strong supporter of female entrepreneurs and firms with meaningful female leadership, ownership, and senior management. No less than 80% of its investee companies have female board representation and 60% have mixed sex equity ownership, a direct result of Shard Credit Partners implementation of ESG covenants and ESG margin ratchets in its loan agreements and investment documentation as standard.
Recent investments also include the venture debt financing for Rezatec Limited in August 2021, the refinancing and shareholder reorganisation of Midwest Mechanical and Electrical Services Ltd in August 2021, as well as the financing in support of the acquisition of The Technology Group by Gradwell Communications in March 2021. The Fund completed financing transactions for the MBI of JST Services Ltd in Scotland, the MBO and buy-and-build strategy of eQuality Solutions Ltd in the North-East of England, and the MBO of Chameleon Technology (UK) Ltd in Harrogate, North Yorkshire, each of which completed in December 2020.
In 2020, Shard Credit Partners ranked eighth in the Debtwire UK Direct Lender league table published by Acuris. Shard Credit Partners was recently awarded Alternative Finance Provider of the Year 2021 (North-East region) at the Insider Media Dealmakers Awards.
Shard Credit Partners Ltd is an Appointed Representative of Shard Capital AIFM LLP, authorised and regulated by the FCA (number 615463).
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