Flagstone secures £108M equity investment from Estancia Capital Partners

Flagstone is a cash deposit platform enabling savers to spread their deposits across hundreds of accounts with a single application.
Flagstone secures £108M equity investment from Estancia Capital Partners

Today UK cash deposit platform Flagstone announced a £108 million equity investment by Estancia Capital Partners, a US financial services specialist private equity firm with deep expertise in the cash management market. 

Co-founded by Andrew Thatcher and Simon Merchant, Flagstone launched in 2015, as a platform for individual savers to access and maintain multiple cash savings accounts in one place. Flagstone today provides white-label and API-integrated capabilities for businesses to offer their customers easy-to-use, adaptable, and competitive savings options.  Flagstone is the largest UK cash savings platform by the number of banks and savings accounts on its panel. 

Flagstone partners with many of the UK’s leading wealth management firms, including St. James’s Place, powers a range of savings products at financial services providers, including Saga and Revolut, and through its international subsidiary, has already put in place a number of distribution relationships outside of the UK.

Individual savers, SMEs and charities using Flagstone – either directly or through multiple fintech platforms, financial advisers or brand partnerships — can access over 200 savings account offerings available from 60 of the UK’s leading cash savings providers. 

Serving a customer base of over 600,000, Flagstone’s total Assets under Administration (AUA) now stand at more than £11 billion. The company’s AUA increased by more than £1 billion per quarter in 2023 as more personal and business savers looked to maximise the interest earned on their cash and FSCS protection. 

Flagstone recorded its first quarter of profitability in December 2022.

Simon Merchant, co-founder and CEO of Flagstone, commented:

“We selected Estancia based on the strength of their team’s experience in supporting ambitious businesses to transform the shape of the cash management market in the US. 

At a time when funding capacity is down globally, Estancia’s investment and market expertise provides us with the firepower necessary to capitalise on the opportunities ahead of us, whether through organic growth, partnerships, or acquisitions, and prompt further consolidation of our market leadership position.”

Takashi Moriuchi, Co-Founder & Managing Director of Estancia, shared: 

“We are excited to mark our entry into the UK savings market at a time when the opportunity to disrupt this status quo is enormous, and innovators like Flagstone must take the lead. We are thrilled to partner with Simon, Andrew, and the talented Flagstone team.”

Under the terms of the deal, Estancia takes a minority stake in the Flagstone business. 

The deal combines primary and secondary investments. The primary investment will further consolidate Flagstone’s position in the cash deposit market, building greater brand awareness, doubling down on partnerships, and matching competitive savings products. 

The secondary investment will reward Flagstone’s earliest backers, enabling them to realise a significant return on their investments.  

Estancia’s Takashi Moriuchi and Keegan Mitchell will join the Flagstone Board of Directors. Darrin Jeffries will be a Board Observer.

The transaction is expected to close in the second quarter of 2024 after receipt of necessary regulatory approvals.

Lead image: Flagstone co-founders, Simon Merchant and Andrew Thatcher. Photo: uncredited. 

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