FatCat originally began in 1989 as a record store in Crawley, West Sussex, formed by Alex Knight and Dave Cawley. It moved to central London in 1990, and originally specialised in Detroit and Chicago-based techno and house music. The store closed down in 1997, and the record label was born in its place, initially releasing dance and electronic 12"s.
The label moved to Brighton in 2001.
As well as Sigur Rós, another Icelandic band, Múm, were signed and proved successful for the label. The same year also saw the establishment of the 130701 imprint for the Set Fire To Flames album Sings Reign Rebuilder. A home for "post-classical" music, the imprint was later appended with the signing of pianist / composers, Sylvain Chauveau, Max Richter, and most recently Hauschka. In the same period FatCat consolidated its roster with the inclusion of artists like David Grubbs, Giddy Motors, and Party of One.
The departure of Sigur Rós to EMI in late 2004 lead to the label going back to being entirely independent. In 2005, FatCat expanded its set-up with the establishment of a US office in New York, and with the FatCat Publishing arm. That same year saw the release of Vashti Bunyan's Lookaftering album. Besides picking up European licenses in Vetiver and Blood On The Wall, the label also signed singer / songwriter Nina Nastasia, as well as new acts like Tom Brosseau, David Karsten Daniels, No Age, The Rank Deluxe, and Songs Of Green Pheasant around this time. In 2007, FatCat put out the first FatCat DVD release by audiovisual artists Semiconductor, who had previously worked on videos for Múm and QT?, as well as taking part in a number of FatCat showcases.