Credit Benchmark has raised $20 million (£12.8 million) for its credit risk platform in a funding round led by European technology investor Balderton Capital. 

The London fintech firm's platform aims to improve financial market benchmarks and risk assessment analysis by combining credit risk data from multiple banks.

Canary Wharf is home to sort of companies Credit Benchmark will be targeting ©iStock/PhotoVoyager

The venture capital money will be used to increase Credit Benchmark’s data gathering efforts with internal ratings based (IRB) banks, expand its intelligence platform and grow its international team and presence.

The Series B funding round builds on the $7 million (£4.5 million) Series A round that Credit Benchmark raised last year, which Balderton rival Index Ventures led. Index has also participated in the latest round.

Credit Benchmark CEO Elly Hardwick, said: “This substantial new investment from Balderton and continued support from our partners at Index is powerful validation of our mission – and our ability – to shake up the credit ratings market.

“Every day we see new examples of the value Credit Benchmark consensus data offers. Our team of experts are poised to bring change to a sector ripe for disruption.”

Balderton Capital partner Tim Bunting will join the board of Credit Benchmark.

“Credit Benchmark’s plan to provide transparent credit information on more than 200,000 companies will provide huge value to all market participants," said Bunting. The need for better data has never been higher. The depth and transparency of the Credit Benchmark platform is a great leap forward in the biggest financial market of all. Balderton is very pleased to be joining the Credit Benchmark team.

Jan Hammer, partner at Index Ventures, added: "The Credit Benchmark team has pulled off something quite extraordinary. By convincing the world's largest banks to contribute their closely-held credit risk estimates to Credit Benchmark's platform, they've created an entirely new model in credit risk ratings. They are disrupting decades old ways of risk assessment, and the potential impact on the financial services sector is huge."

Fintech is a booming new sector in the UK with London-based companies such as Funding Circle, TransferWise and The Currency Cloud all raising significant amounts of venture capital in recent months. 

A report out earlier this year from IT service provider Accenture showed that the total global investment in fintech firms tripled in the year leading up to March 2015, with the fastest growth witnessed in Europe.

During the time frame, overall spending on fintech firms grew by more than three times the rate of general venture capital investment, growing from $4.05 billion (£2.7 billion) in 2013 to $12.2 billion (£8.2 billion) in 2014.

The UK government is looking to further promote the UK fintech scene, with chancellor George Osborne appointing Eileen Burbidge, a venture capitalist at Passion Capital and former head of product at Skype, as the nation's "special envoy for fintech" last week. 

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