NatWest's Bourn Investment: A Drop in the Bucket or a Sign of Things to Come?
NatWest Group is taking a minority stake in Bourn, a London-based fintech, as part of a £3.5 million funding round. Portfolio Ventures, McPike Global Family Office, Haatch, Love Ventures and Aperture are also kicking in funds. The stated goal? To accelerate Bourn’s Flexible Trade Account (FTA), which launched last year and aims to ease cash-flow pressures for SMEs.
The press releases are full of the usual corporate optimism. Bourn’s CEO, Nick Tracey, claims this investment round "shows that established banks see the same opportunity we do." Ladi Greenstreet at NatWest echoes this sentiment, highlighting Bourn’s "potential" and how it "complements our ambition." But let's dig a little deeper than the marketing fluff.
£3.5 Million: Revolution or R&D Fig Leaf?
The Scale Problem
£3.5 million. That's the headline figure. Now, consider NatWest's balance sheet. Their annual revenue is in the billions. This investment in Bourn is, frankly, a rounding error. A tiny bet. Is it really a game-changer, or just a PR move to appear innovative?
The stated purpose of the FTA is to help SMEs manage recurring cash-flow problems. Bourn integrates overdraft-style flexibility directly into existing bank accounts. Sounds good on paper, but let's be real: SMEs are notoriously difficult to lend to. Their risk profiles are all over the place, and their needs are incredibly diverse.
How many SMEs can Bourn realistically serve with this initial funding? Let's assume, generously, that each SME requires an average of £50,000 in working capital. That £3.5 million could potentially support 70 businesses. (To be exact, 70 is already rounding up from 69.something). For a bank the size of NatWest, serving potentially hundreds of thousands of SMEs, 70 is statistically insignificant.
So, is this about truly revolutionizing SME finance, or is it about something else entirely? NatWest says it wants to use insights from Bourn’s FTA to explore how embedded working-capital tools could improve cash-flow access. Which makes me wonder—is Bourn a genuine investment, or a cheap R&D lab? I've looked at hundreds of these fintech investments, and the "insight gathering" justification is a common theme when the investment size doesn't match the stated ambition.
Embedded Finance: NatWest's Small Bet on a Big Idea
The Embedded Finance Angle
The real story here might be about embedded finance. NatWest wants to "help customers access working capital seamlessly through the platforms they already use." That's the key phrase. The bank isn't just investing in Bourn; it's investing in the *idea* of embedding financial services directly into the software and platforms that businesses already rely on.
NatWest Backs Fintech Bourn in Push to Modernize SME Working Capital - TradingPedia
Think about it: Instead of going to a bank for a loan, a business could access working capital directly from their accounting software, their e-commerce platform, or their supply chain management system. The potential is enormous.
But the execution is tricky. Integrating financial services into existing platforms requires deep technical expertise, strong partnerships, and a willingness to experiment. It also means navigating a complex regulatory landscape. (Regulators are still figuring out how to deal with the implications of embedded finance.)
NatWest's move also comes as Sky News reported they've discussed selling their stake in Cushon. One hand giveth while the other taketh away. Curious.
A Calculated Gamble, or Just Calculated PR?
This investment in Bourn isn't about to single-handedly solve the SME funding gap. It's a small step in a much larger, and much more complex, journey toward embedded finance. Whether it pays off remains to be seen. But one thing is clear: NatWest is placing a bet—albeit a small one—on the future of banking.
