Is there gold in the digital hills? Some of the smartest (some might say “most avaricious”) minds aroundk seem to think so.
Two of the UK’s most prolific venture capital firms, Index Ventures and Dawn Capital, both announced funding rounds yesterday as they build up their investment war chests.
The cash is split $2bn for its sixth growth fund, $900m for its 11th venture fund and £200m for its first early-stage origin fund.
“We’ll be investing in companies across sectors, particularly in consumer, enterprise, software infrastructure, gaming and fintech, where we’ve established leadership and expertise,” said Index partner Mike Volpi.
“We continue to see a lot of opportunity here, while of course we remain open to exploring other new and exciting areas.”
Meanwhile Dawn Capital, which just this week made a follow-on investment in portfolio company and expense automation platform Soldo, raised $120m for its second later-stage fund.
The last few years have been particularly kind to Dawn’s fintech portfolio, with iZettle being acquired by PayPal in 2018 for $2.2bn and Tink just last month signing a €1.8bn deal to be acquired by Visa.
Historical Performance And IFISA Process Guide
That figure is the result of over £24 million of loans facilitated on the site, as we bring individuals looking for a good return on capital together with carefully vetted small companies seeking funds for growth. Bear in mind that lenders’ capital is at risk. Read warnings on site before committing capital.
All loans on site are eligible to be held in a Money&Co. Innovative Finance Individual Savings Account (IFISA), up to the annual ISA limit of £20,000. Such loans offer lenders tax-free income. Our offering is an Innovative Finance ISA (IFISA) that can hold the peer-to-peer (P2P) business loans that Money&Co. facilitates. For the purposes of this article, the terms ISA and IFISA are interchangeable.
So here’s our guide to the process:
The ISA allowance for 2020/21 is unchanged from last tax year at £20,000, allowing a married couple to put £40,000 into a tax-free environment. Over three years, an investment of this scale in two Money&Co. Innovative Finance ISAs would generate £8,400 of income completely free of tax. We’re assuming a 7 per cent return, net of charges and free of tax here.
Once you have made your initial commitment, you might then consider diversifying – buying a spread of loans. To do this, you can go into the “loans for sale” market. All loans bought in this market also qualify for IFISA tax benefits.
Risk: Security, Access, Yield
Do consider not just the return, but the security and the ease of access to your investment. We write regularly about these three key factors. Here’s one of several earlier articles on security, access and yield.