Cushon raises £26m to acquire master trust

Workplace savings fintech Cushon has closed a £26 million funding round, enabling it to acquire Construction First, the scheme funder of the Workers Pension Trust (WPT) scheme, having acquired another master trust pension scheme in 2020.

Of the £26 million, £6 million was led by fintech venture capitalist Augmentum Fintech, which has a portfolio that also includes interactive investor, Habito and Tide.

A further £20 million in credit facility has been committed from pan-European lending firm AshGrove Capital.

Cushon, which runs the Net Zero Now pension scheme, said that the fundraising would ensure it is well positioned for further acquisition and consolidation of other master trust schemes, following its acquisition of Salvus Master Trust, now Cushon Master Trust, last year.

WPT is an auto-enrolment master trust in Northern Ireland which supports in excess of 5,000 employers and more than 110,000 employees with pension investments of more than £330 million.

This latest deal brings Cushon’s overall assets under management to £740 million and total number of members to over 200,000, making Cushon the sixth-largest Master Trust by number of employers managed.

Ben Pollard, CEO of Cushon, said: “Following our entry into the pensions market last year, and launch of the world’s first net zero pension, we’ve been keen to bring our unique technology-led proposition to as many employees as we can, as quickly as we can. This raise has the right balance of lending and equity to enable us to do just that.

“We are delighted to welcome the team at WPT to our expanding family and to have the support of such experienced investors to help us continue on our journey.”

Tim Levene, CEO of Augmentum Fintech, said that workplace savings and investments are “ripe for disruption”.

“We were impressed by Cushon’s blue-chip client list, world-leading stance on climate change and its emphasis on getting people to understand the value of saving through the workplace. It is well placed to win significant market share,” he added.

“Cushon has developed disruptive technology enabling it to provide better outcomes for workplace savers, a market that is evolving rapidly and demonstrates clear organic and inorganic growth opportunities,” said Phil Fretwell, co-founder and partner of AshGrove Capital.

“The business model also exhibits strong credit characteristics due to its highly predictable revenue profile and compelling unit economics.”