NatWest Group — formerly known as RBS — announced it has agreed to acquire 85% of Cushon, a Net Zero workplace savings and pensions fintech, for £144 million.

“Cushon’s primary products are its workplace ISA and master trust pension – which offers an investment strategy designed to drive down the financed CO2 emissions of customers’ investments,” said NatWest.

“It also offers Junior and Lifetime ISAs, as well as a general investment account.

“The intended acquisition will therefore provide NatWest Group with a workplace pensions and savings proposition, enabling the group to offer a new suite of financial wellbeing services to its commercial customers and, consequently, to their employees.”

Completion of the intended acquisition, which will see 15% of the firm retained by Cushon management, remains subject to regulatory approval and is expected to occur later in 2023.

“The Cushon proposition will initially be offered to NatWest Group’s commercial mid-market customers, through the bank’s relationship managers, following a successful pilot in 2022,” said NatWest.

“Cushon will continue its organic growth ambitions in the Workplace Pensions and Savings market, in addition to distributing to NatWest commercial customers.”

NatWest Group CEO Alison Rose said: “By combining the scale, experience and expertise of NatWest Group with Cushon’s innovative workplace savings and pensions products, this acquisition allows us to enhance our services to commercial customers and support the financial wellbeing of their staff.

“Core to our Purpose-led strategy is supporting customers at every stage of their lives, and by entering this fast-growing market we are equipping ourselves with the tools to develop a proposition which responds to our customers’ changing needs whilst delivering value-driven sustainable growth and returns.”

Peter Flavel, chief executive of NatWest’s wealth businesses, said: “As a workplace savings disrupter, Cushon will help NatWest Group achieve its strategic, purpose-led vision of helping customers save for tomorrow.

“On average, UK employees are due to outlive their savings by 10 years and we are committed to helping reduce this savings gap.

“We believe Cushon’s engaging, app-first pension will help customers by moving their pension and workplace savings schemes from a compliance burden to an employee benefit.”

Cushon CEO and co-founder Ben Pollard said: “This is the next exciting chapter for a great British fintech as we join forces with a great British bank.

“Becoming part of NatWest Group will accelerate our plans for further technology-led innovation to improve the UK’s financial wellbeing.

“Together, we look forward to driving more positive change in workplace savings and pensions.

“Cushon’s cutting edge technology and socially responsible investment funds will allow even more UK savers to benefit from a convenient, great value way to save; and understand the positive impact their life-long savings can have on issues that matter, such as climate change.”

Cushon has been a portfolio company of publicly listed fintech fund Augmentum Fintech plc.

“Augmentum first invested in workplace savings and Net Zero pension provider Cushon in June 2021 with a £5 million investment as part of Cushon’s Series A fundraising round and since that date the company has invested a further £5.8 million,” said Augmentum.

“Augmentum is expected to receive proceeds of £22.8 million from the completion of the acquisition, representing a 46.2% uplift on the unaudited 30 September 2022 holding value of £15.6 million, a multiple of 2.1x on cost and an IRR of 66.3%¹.

“Augmentum expects this transaction to complete within the next 12 months.

“The transaction implies an increase of 3.1p over the last published NAV per ordinary share after performance fee (unaudited) as at 30 September 2022 of 155.0p. This announcement does not constitute or describe an updated NAV of the company.”

Augmentum Fintech CEO Tim Levene said: “The acquisition of Cushon by NatWest Group marks Augmentum’s fifth realisation since IPO and demonstrates the strategic nature of many of the assets in our portfolio.

“Financial incumbents are increasingly looking to accelerate their digital transformation through acquiring innovative, digital-first propositions.

“The pensions industry has certainly suffered from a lack of transformative innovation to date and with their Net Zero pension offering and tech-led approach, Cushon is a true digital disruptor.

“We wish Ben Pollard and the team all the best for their next phase with NatWest.”