New 6.2x partial exit for SFC: Ryft, payment processing platform sending faster payouts to online merchants
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SFC Capital, manager of Startup Funding Club SEIS Fund and Startup Funding Club All-Star Follow-on Fund EIS, has announced the profitable partial exit of Ryft Pay. Ryft’s transaction payment technology enables next-day payouts for ecommerce marketplaces and merchants.
SFC realised 30% of its SEIS holding in a secondary transaction, which delivered a 6.2x return for SEIS investors. Many Wealth Club investors in SFC’s funds will receive exit proceeds and continue to hold shares in Ryft to potentially benefit from any further growth – not guaranteed.
The partial exit reflects the manager’s approach of realising value when possible, while maintaining strong involvement in high-performing businesses. A notable previous example of this was SFC’s partial exit of Cognism, a machine-learning driven marketing platform: the SEIS Fund sold three quarters of its stake for an average 35.5x return. Past performance is not a guide to the future – there have also been failures.
SFC first invested in Ryft in 2021 through its SEIS Fund, then provided follow-on funding through its Startup Funding Club All-Star Follow-on Fund EIS in multiple subsequent rounds – investing a total of £560,000 to date, alongside British Business Bank. SFC has not exited its EIS investment in Ryft.
What problem does Ryft’s innovative technology address? Why did SFC invest – and opt for a partial exit? How could you invest in similar companies through SFC’s SEIS and EIS funds?
Important: The information on this website is for experienced investors. It is not a personal recommendation to invest. If you’re unsure, please seek advice. These investments are for the long term. They are high risk and can fall as well as rise in value: you could lose all the money you invest. Tax rules can change and benefits depend on circumstances.
What problem does Ryft address?
Ryft came as the brainchild of longtime friends and repeat founders Sadra Hosseini and Alex Mackenzie, whilst building their previous business Butlr, an ordering app for pubs and bars, which they eventually sold profitably.
Sadra and Alex had scaled Butlr rapidly during the pandemic, reaching over a million customers and 500 active venues. While doing so, they identified a gap in the microtransactions market for payment technology that could ease the headache of open-banking PSD2 compliance and facilitate fast payouts.
Ryft’s solution
Ryft provides a payments-processing system that simplifies complex multi-sided payments for ecommerce marketplaces and procure-to-pay (P2P) platforms.
Sales transactions on these platforms often involve multiple sub-merchants – altogether racking up high fees and lengthy payout wait times.
Ryft’s plug-and-go solution processes these payments, factors in any commissions due, and then automatically diverts funds to the relevant merchants and sub-merchants the next working day. The system is PSD2-compliant – ensuring anti-money laundering rules are followed and reducing associated risks for marketplaces. Ryft simply charges a flat fee for each transaction.
Since its incorporation in 2019, Ryft has signed significant commercial partnerships and expanded client base to over 1,500 merchants. Both SFC Capital and British Business Bank recently reinvested, demonstrating their continued commitment to backing the company and its founders.
Why did SFC invest – and what informed the partial exit?
Originally set up as an angel syndicate in 2012, SFC Capital is Europe’s second most active seed investor, having invested in over 500 companies. Its network of over 500 active angel investors – many with experience in building successful young companies – usually co-invest alongside SFC’s funds and bring valuable experience to the portfolio.
The manager aims to back very early-stage companies with innovative products and disruptive technologies – and the potential to generate successful exits and a fund target return of 3x, not guaranteed.
Following the success of their first business Butlr, SFC saw that Ryft’s founders Sadra and Alex had put together the essential aspects to solve deep problems experienced in the business payment platform landscape. Seeing the potential, the SEIS Fund invested in Ryft in January 2021.
SFC views the company’s growth since that initial investment as “a testament to the team's ambition and the strength of Ryft's business model”.
SFC says the decision to sell 30% of its holding within the SEIS fund was informed by several factors. Given a significant increase in valuation, this was a rare opportunity to exit at Series A pricing. At the same time, Ryft remains at a key stage of its development, with the next 12 to 18 months being important as it aims to scale. By retaining a majority of its holding, SFC could ensure its continued participation in the company’s progress.
This transaction represents a measured approach – securing returns while keeping meaningful exposure to the company’s long-term potential.
How to invest in similar companies
The Startup Funding Club SEIS Fund and Startup Funding Club All-Star Follow-on Fund EIS are both currently open for investment. Both invest in the same types of companies, albeit at different stages. The SEIS Fund invests at a very early stage, with SFC taking a board seat. The Follow-on Fund EIS aims to back the most promising businesses within the earlier-stage portfolio, as it has done with Ryft.
Both funds aim to deploy capital in the 2025/26 tax year – not guaranteed. This means EIS (up to 30%) and SEIS (up to 50%) income tax relief should be available in 2025/26 or 2024/25, if using ‘carry back’.
Tax rules can change and benefits depend on circumstances.
See Startup Funding Club SEIS Fund's performance
Performance per £100 invested in each tax year
Source: SFC, as at January 2025. Past performance is not a guide to future performance. The chart shows realised returns (where share proceeds have been returned to investors as cash) and unrealised returns (where cash has not yet been returned and the value of the investments is based on the manager’s own valuation methodology). There is no ready market for unlisted shares. The figures shown are net of all fees and do not include any income tax relief or loss relief.
Wealth Club aims to make it easier for experienced investors to find information on – and apply for – investments. You should base your investment decision on the offer documents and ensure you have read and fully understand them before investing. The information on this webpage is a marketing communication. It is not advice or a personal or research recommendation to buy any of the investments mentioned, nor does it include any opinion as to the present or future value or price of these investments. It does not satisfy legal requirements promoting investment research independence and is thus not subject to prohibitions on dealing ahead of its dissemination.
Alex Davies
Chief Executive
Alex was a board director at Hargreaves Lansdown, where he worked for 15 years. He was responsible for building Hargreaves Lansdown into the biggest direct-to-consumer SIPP provider in the UK with more than 150,000 clients and over £12 billion under management. He is a keen investor with a portfolio of shares, funds, student property, EIS and VCT investments.