The business pages of British newspapers have been dominated in recent years by a wave of to do business gas station entrepreneurs Mohin and Zuber Issa and private equity group TDR Capital. Now, investors have made their first foray into venture investing after leading an $80 million investment in fintech Bud.
The Series B round is on a radically different scale to deals normally struck by Lancashire-based Blackburn brothers, and their private funders TDR. Investors have teamed up to buy Asda, Britain’s third-largest supermarket chain from Walmart for $8.5 billion in February 2021and have now mounted an $8.7 billion bid to acquire the Boots pharmacy chain from Walgreens.
Investment in the London-based startup, which uses AI to automate accessibility checks, likely plays a part in the Issa brothers and TDR Capital’s plan for Asda. TDR partnered with KKR in November to acquire a majority stake in Jaja Finance in November 2021and the credit card lender signed a deal with Asda last month to launch a digital reward cardwhile Asda has its own financial services arm offering loans and insurance products.
“We are extremely excited about the potential of Bud, not only in its platform’s ability to truly exploit the opportunities of open banking, but also in its considerable potential to help propel other businesses in which we invest,” says Gary Lindsay. , managing partner at TDR Capital.
Forbes understands that the London-based private equity group, which also owns the Pizza Express restaurant chain and David Lloyd gyms, has approached other fintech startups to make investments. Deals are often structured as a mix of traditional cash for equity and TDR-linked warrants helping startups scale by connecting them to its portfolio companies.
Bud’s decision to raise funds from an unconventional source comes as fintech startups face a squeeze in valuations and funding, after a sharp sell-off in the stock price of listed companies like Affirm, Sofi and Robinhood. The Series B round also included SEI Investments and fintech specialist Outward VC.
Bud had raised $20 million from HSBC, Goldman Sachs and ANZ for a Series A round in 2019 to compete with ‘open banking’ rivals Tink, Truelayer and Plaid that link banks, startups and other institutions financial resources to enable secure data sharing and application creation.
The Issa brothers built a retail empire by buying a single petrol station in 2001. The couple’s EG Group now operates over 6,300 petrol stations in the UK, Europe and the US and has acquired Asda in 2021 in the UK’s largest-ever leveraged buyout with the backing of TDR. The wealthy brothers reportedly made at least one investment in a sportswear brand Castore through a Monte Group holding company.