A Santander banking branch is seen in Manhasset, New York Thomson Reuters This story was delivered to BI Intelligence " Fintech Briefing " subscribers. To learn more and subscribe, please click here . Santander UK has created a £200,000 ($255,000) fund, called the Changemaker Fund, which will be used to invest in small businesses via a new partnership with equity crowdfunding platform Crowdfunder. The partnership will focus on funding community projects, charities, and businesses aimed at social change, according to the Financial Times . Santander’s approach marks a departure from traditional equity crowdfunding. Typically, equity crowdfunding refers to when a group of people invest in a small business in return for shares. However, contributions from the Changemaker Fund will be donations. Once a project has been approved by Santander, it will need to raise 50% of its funding target via Crowdfunder’s platform from investors. Santander will then donate the remaining 50%, up to £10,000 ($13,000). The bank is partnering with alt finance platforms to expand its small- and medium-enterprise business. Santander already has a referral agreement with UK marketplace lender Funding Circle , as well as a partnership with alternative finance firm Kabbage, whereby it leverages the fintech’s advanced credit checking technology to speed up the loan application process for small businesses. This latest partnership adds a crowdfunding platform to Santander’s clutch of partnerships. It is likely that Santander is testing different forms of alternative finance to see which technologies and business models best suit its own aims before fully committing to one. We think the bank will start to move away from partnerships and toward acquisitions once it has determined which technologies it prefers. This will likely put it in direct competition with the remaining alt finance platforms, some of which it currently collaborates with. We expect to […]
