KAREN JOY BACUDO
Finance Editor
Festina Finance has secured a growth investment of more than EUR €25 million from Birchway Capital, valuing the Danish pensions technology company at about EUR €200 million.
The investment gives the UK-based growth equity firm a stake in a business focused on software for pensions, life insurance and financial planning. The new funding will support further development of Festina Finance’s life and pension platform, team growth and expansion across European markets.
Festina Finance operates in Denmark, the Netherlands, the UK and Norway, and employs more than 200 people. Its platforms are used by customers responsible for about 10 million pension policies and 3 million banking customers across Europe.
Birchway Capital invests in business-to-business technology, fintech and artificial intelligence companies. The transaction is a sizeable backing for a specialist software supplier serving an industry still under pressure to replace older systems with newer digital infrastructure.
UK focus
Festina Finance has identified the UK as a key strategic market in its next phase of growth. Demand is rising for newer pension administration systems as providers and insurers review ageing technology estates.
Founder Morten Schantz said the investment would help the business widen its reach.
“The pensions and life insurance industry is undergoing a major technology transformation, driven by the need to replace legacy infrastructure with more modern, flexible platforms. Our focus at Festina Finance has been on building cloud-native modular systems that allow providers to adapt more quickly, improve operational efficiency and deliver better outcomes for members without ever compromising resilience or control. This investment enables us to accelerate that work and scale our platform across Europe as demand for modern pensions infrastructure continues to grow,” Schantz said.
The deal also changes Netcompany’s shareholding in Festina Finance, an existing investor. After the transaction, Netcompany will hold a 22% stake in the business.
The companies will continue to work together through Netcompany’s AMPLIO Life & Pension offering and through Netcompany Banking Services using Festina Advisor. The arrangement keeps Festina Finance linked to a broader range of pension and banking technology projects in Europe.
Investor view
Customer discussions formed part of Birchway Capital’s assessment before investing. The firm pointed to a market in which many pension providers and life insurers still depend on older, fragmented systems.
“Festina Finance has built a strong platform in a market where many pension providers and life insurers are still reliant on legacy systems. Our discussions with customers confirmed the strength of the technology and the importance of its role in modernising mission-critical operations. We see a clear opportunity as providers move away from fragmented, ageing infrastructure towards integrated, cloud-based platforms. The scale of the market opportunity, combined with the quality of the Festina Finance team, means we believe they are strongly positioned to continue as a leading technology partner to pension and life insurance providers across Europe,” said Kilian Pender, Founding Partner, Birchway Capital.
The investment highlights continued interest from private capital in software businesses serving regulated financial markets. Pension administration and life insurance systems can be difficult to replace, creating long sales cycles but also sticky customer relationships once platforms are installed.
For Festina Finance, the backing comes as pension providers across Europe balance cost pressures, compliance demands and the need to update core systems. Vendors offering modular platforms have sought to position themselves as alternatives to large replacement programmes built around older architectures.
Netcompany described the transaction as supportive of its own ambitions in pension technology. “Festina Finance is an important strategic partner for us and this transaction supports our shared ambition to expand the reach of modern pension technology across European markets. It also strengthens the development of our AMPLIO Life & Pension and supports our continued work to modernise core pension infrastructure through scalable, cloud-based and data-driven solutions,” said Richard Davies, Country Managing Partner, Netcompany UK.