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LocalGlobe Notes

RBS acquires FreeAgent

Royal Bank of Scotland, founded in 1724 yesterday acquired FreeAgent, founded 2007.

Ed Molyneux, Founder, CEO

It was RBS first acquisition since the financial crisis of 2007/2008 — around the time FreeAgent was born in Edinburgh. The fact that both hail from Scotland is purely incidental as is the fact that FreeAgent was born in the year RBS almost died and was saved by the UK taxpayer.

I think of FreeAgent, the most complete on-line accounting package for sole traders, Freelancers and Micro-businesses, as small but perfectly formed. The company has stuck to its chosen market segment, resisting temptations to move up the stack and in the process has developed their product and service specifically to that cohort of 4m+ micro-businesses in the UK.

Like Xero, FreeAgent has found that growth in the early years was relatively slow as the conventional Accounting world was wary of adopting cloud solutions. But the inevitable arrival of on-line tax filings, open banking and the rapid move to cloud services means that FreeAgent has come into its own.

A listing in November 2016 on the AIM market gave the company the status and profile to continue building and the distribution agreement with RBS followed soon after. Those institutions which invested at the listing as well as those who invested in the Seedrs crowd funding in May 2015 (pre-money, £30.2m) will today be counting their considerable gains as the exit valuation is £53m

We’re grateful to our good friend Christoph Janz (not yet Point9 at the time) for the introduction to FreeAgent. How Christoph, based in Berlin found FreeAgent is a tribute to his careful study of the SaaS world and his ability to identify the most interesting of these types of businesses.

My trips to Edinburgh were pretty memorable. For example, one of the annual strategy days was held on the very day that Scotland voted to stay part of the UK. What a thrill to be there on the day!

The founders, Ed Molyneux, Roan Lavery and Olly Headey are ‘rolling over’ a portion of their value in the business to take it forward with RBS and I’d expect them to keep building FreeAgent strongly with the reach that RBS will provide. This is a tremendous team which has been a pleasure to work and RBS will be well advised to keep FreeAgent as independent as possible to maintain the unique culture which has developed a product loved by its 60,000 customers.

RBS makes first acquisition since financial crisis

Financial Times-27 Mar 2018

RBS committed an additional £1.5bn to “restructuring” efforts at its full-year results last month, with much of the money earmarked for improving digitisation efforts. The bank said the FreeAgent deal will support those plans, strengthening its “ability to deploy technology in a timely and efficient manner”.

FreeAgent bought by RBS for £53m
insider.co.uk-27 Mar 2018

RBS embarks on first takeover since ABN Amro deal that broke the …
Telegraph.co.uk-27 Mar 2018

Aim-listed Freeagent’s shares are through the roof as RBS agrees to …
City A.M.-27 Mar 2018

FreeAgent Acquired by RBS for £53 Million
DIGIT.FYI (blog)-7 hours ago



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Robin Klein

Entrepreneur, now active early stage tech investor. Portfolio includes/d: LoveFilm, Moo, Graze, Zoopla,CityMapper,Fizzback,Improbable,Transferwise+ others