TP24, a Switzerland-headquartered fintech and lender to small and medium-sized enterprises, will look for a private equity or growth equity investor next year to help it build scale, including via acquisitions, Founder and Executive Chairman Ben James told Mergermarket.

TP24 will mandate an investment bank within the next six to eight weeks, and it expects to launch a process targeting investors in mid-January of 2025, James said. It anticipates closing a deal in 2Q25, he added.

The company takes legal advice from Walder Wyss, and works with other lawyers such as Linklaters and CMS, he said.

James declined to comment on TP24’s potential valuation, but said that it is expected to increase further once the company turns profitable as a group, which is anticipated from January 2025.

TP24 generates a double-digit million USD revenue, James said, and has been doubling its revenue annually for the past four years, including in 2024.

The potential transaction is likely to include a fresh capital injection via a new share emission, and some of TP24’s early investors could consider an exit, James said. However, all of its investors are pragmatic and interested in taking the company to the next level, he added.

TP24 acknowledges that PE investors typically aim to secure majority stakes, he said.

The investors on its capital table include UBS [SWX:UBSG], SIX Group, Berliner Volksbank Ventures and OurCrowd, as well as business angels and family offices, James said. Israeli-based sponsor OurCrowd is the company’s most recent investor, and provided equity financing in several instalments last year and in 2024, he said.

The company has raised USD 65m (EUR 60.6m) in equity and venture-debt funding since its foundation in 2018, James said. It has also raised a total of around GBP 750m from lenders including Barclays and M&G, he said.

Views on acquisitions

James told this news service in August 2023 that TP24 planned to consider acquisitions to grow its market share.

The company started looking at an inorganic growth options recently, James said. It has identified 20 to 25 potential acquisition targets, but the specific M&A goals and deal financing will depend on an investor it chooses, he said.

TP24 sees an opportunity to acquire multiple subscale factoring businesses in various European markets, such as in Switzerland, the UK or Germany, James said. It views factoring players with loan books of less than EUR 50m as subscale, he added.

The company would aim to digitise acquired targets using its existing technology with a view to reducing costs within these businesses and accessing cheaper capital from institutional lenders for the group, thanks to an increased business volume, he said.

Its organic growth focus to date has been on deploying the debt capital for SME lending purposes, getting all of its markets to profitability, and establishing and scaling its Software-as-a-Service (SaaS) offering, James said. The company plans to continue organic growth, he added.

The SaaS solution enables other banks to engage in sustainable SME lending with a secured and structured product, James said. The company has already signed its first SaaS deal with a large British bank operating in Asia, he added.

In the medium term TP24, which has been a balance-sheet lender for SMEs to date, will look to move towards an originate-to-distribute/securitisation model of its current assets, James said.

The company has a team of 60 , and its main markets include Switzerland, the UK, and Australia, James said.