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Shard Credit Partners exits its first venture debt fund investment in PassFort Ltd, in sale to Moody’s Corporation for an undisclosed sum.

PassFort Ltd (“PassFort”), a UK based SaaS regulatory technology company has been acquired by Moody’s Corporation (“Moody’s”) for an undisclosed sum.

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).

 

Contact details:

SEC Newgate

 

Tel: Elisabeth Cowell / Robin Tozer / Isabelle Smurfit

Email: shardcapital@secnewgate.co.uk

Shard Credit Partners Investor relations:   IR@shardcreditpartners.com

Business:    info@shardcreditpartners.com

Website:    www.shardcreditpartners.com

 

 

Shard Credit Partners provides a £3.5 million Venture Debt facility to PassFort Ltd

Shard Credit Partners has provided financing of £3.5 million ($4.89m USD) in support of the growth of ‘Reg-Tech’ business PassFort Ltd.

PassFort, headquartered in London with 40 staff, was founded in 2017. PassFort (https://passfort.com) is a compliance platform designed to automate the collection, verification and secure usage of due diligence (“DD”) and documentation for banks and financial services customers. The product gives the user the ability to oversee digital ‘Know Your Customer’ (“KYC”) practices, Anti Money Laundering (“AML”) requirements and identity checks plus allowing ongoing risk monitoring all-in-one solution.

PassFort is a product whereby the customers can create their policies and rules as to how they undertake their compliance practices in a fully automated manner. Their platform enables compliance teams to build a contextual understanding about their clients through live and real time searches, onboarding and continued red flag monitoring.

The Venture Debt facility has been provided to assist PassFort with expansion of the sales team, and to assist with the strong growth the business is currently going through.

Donald Gillies, CEO of PassFort said: “We are delighted to extend our partnership with Shard Credit Partners as part of our $16.2m Series A. The $4.89m being provided by Shard Credit Partners will enable PassFort to capitalise on significant growth across the digital economy and the growing need for our automated compliance solutions. It is a testament to the efforts of our team and company culture to have come through the last 12 months in a position where our products and our customer base are growing so rapidly. We are grateful to Will and the rest of the Shard Credit Partners team for believing in PassFort to be the cornerstone investment for this new UK fund and we look forward to partnering with them as both our businesses continue to grow.”

William Chappel, Head of Venture Debt for Shard Credit Partners, commented: “We are delighted to have been able to provide financing support to PassFort and we are extremely pleased to announce this as the first deal of the new Shard Credit Partners UK tech-focused venture debt strategy. PassFort is a name that I have followed for many years, and Donald and his team continue to build a dynamic and exciting offering. We are looking forward to working closely with PassFort as they continue to achieve strong growth milestones.”

Legal advice to Shard Credit Partners was provided by Orrick LLP, led by Partner Scott Morrison and supported by Hridi Chowdhury.

Shard Credit Partners’ strategy is to become a leading provider of capital to entrepreneur and management-owned companies, VC backed growth businesses and private equity-owned companies focused on achieving transformational growth and expansion in the UK regions.  In the past two years, Shard Credit Partners has invested more than £130 million in supporting regional Management Buy-Out transactions and M&A buy-and-build acquisition strategies, as well as growth capital expenditure financing. This transaction represents the first Venture Debt transaction by Shard Credit Partners.  

 

An introduction to Passfort:


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 at low leverage, benefiting from robust documentation and a full suite of financial and non-financial covenants.

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 businesses in the Software as a Service (“SaaS”) and Fintech markets across the UK tech sector. Shard Credit Partners plans to hold a first close on its new Venture Debt Fund in Q4 2021.

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 million. Shard Credit Partners plans to hold a first close on its second UK lower mid-market direct lending fund during the fourth quarter of 2021.

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 fund invests in businesses across all sectors and throughout the UK.

The firm has a strong ESG focus; in particular, it is a strong supporter of female entrepreneurs and firms with meaningful female leadership, ownership and senior management.

Recent investments include the financing in support of the acquisition of The Technology Group by Gradwell Communications in March 2021, 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 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.

 

Contact details:

Newgate Communications

 

Tel: Elisabeth Cowell / Robin Tozer / Isabelle Smurfit

Email: shardcapital@newgatecomms.com

Shard Credit Partners

Investor relations: IR@shardcreditpartners.com

Business: info@shardcreditpartners.com

Website: www.shardcreditpartners.com