The United Kingdom has set up a £1 billion fintech fund to compete with Silicon Valley

A new investment fund in the United Kingdom with a capital raising of up to £1 billion has been formed to support growth-stage financial technology startups.

In an effort to boost Britain's global reputation as a fintech investment center, the United Kingdom has launched an investment vehicle to finance growth-stage financial technology companies until they can go public. The Fintech Growth Fund, which is backed by Mastercard, Barclays, and the London Stock Exchange Group, aims to invest between £10 million and £100 million in fintech companies ranging from consumer-focused challenger banks and payments technology groups to financial infrastructure and regulatory technology.

The fund, which is advised by the U.K. investment firm Peel Hunt, seeks to assist companies in the development stage of their funding cycle as they pursue Series C and higher rounds. It is a rare commitment to a fintech-focused specialist fund backed by mega-industry giants. While fintech-focused funds such as Augmentum Fintech and Anthemis Group exist, the United Kingdom has yet to see a government-led fintech fund.

The London Stock Exchange has committed to a variety of improvements to encourage fintech firms to list in the UK rather than the US—a particularly important step in light of British chip design firm Arm's decision to abandon a London listing in favor of New York. Former UK finance minister Philip Hammond also serves as an advisor to the fund.