Weekly Fintech Newsletter | 2021 #6
The past year was a year of risk, hell, and uncertainty. While many companies were forced to downsize by the situation, others grew like crazy.
In late 2020, BNPL market leaders multiplied their capitalization. 🇦🇺Afterpay saw 292.78% growth while achieving a $34.29 billion capitalization, and 🇺🇸Sezzle experienced 289.76% growth and a capitalization of $657.34 million. A wide range of factors contributed to the success of a BNPL sector.
Among the factors was the push for digitization of payments and in-store purchases, attractiveness for investors, great potential for partnerships, and not-yet-great competition between market players. At this point in time, there is room for experiments in that niche, and many customer segments have been left unaddressed.
👉 Read more here.
FINTECH MAPS
NOW, ON TO THE SUMMARY OF LAST WEEK'S FINTECH SPACE
FINTECH SPOTLIGHT
It’s not entirely clear why 🇺🇸SPACs have become so popular over the past year. One explanation is that founders, VCs, and angel investors have become impatient: IPOs were long seen to be too scarce, too costly, and happening too late in a company’s life.
Maybe there’s just too much capital to deploy and not enough return-generating assets in which to deploy it, with a growing appetite from investors for tech companies. In any case, where is Europe in this craze?
If SPACs are a more convenient replacement for IPOs, then Europe should have been racing ahead in embracing them. The fragmented structure of the continent’s stock markets already makes them less of a good fit for the traditional IPO process.
The current enthusiasm might not last, though. Three adverse trends could contribute to curbing it.
👉 Read more here.
FINTECH HIGHLIGHTS
After founding my own startup and spending a few years working with startups I’ve seen a lot of mistakes that founders usually make. Unfortunately, these scenarios are more common than we’d like to think. Here is my roundup of the most common mistakes and how to avoid them. Link here.
Open Finance is THE topic of conversation for Fintech in LATAM during 2020. Link here.
A compilation of funding deals across the fintech sector worldwide for the week of 1-7 March 2021. Featuring 🇸🇪Klarna, 🇺🇸Papaya Global, 🇺🇸TaxBit, 🇺🇸BeamTechnologies LLC, and 🇮🇩Xendit. Link here.
🇺🇸Amazon has opened a cashier-less store in London that lets customers "just walk out" once they have collected their shopping, with payment automatically taken from their account. Link here.
One of the few industries that have benefited from the COVID-19 crisis is online finance. Around the world, the pandemic has forced consumers to adopt digital banking. Link here.
PAYMENTS
Fresh off the termination of its planned merger with 🇺🇸Visa, 🇺🇸Plaid announced Thursday a new income verification product, which it said is aimed at “improving the lending lifecycle” with payroll data. Dubbed simply Income, the new product — which is currently in beta — is designed to make it easier for people to verify their income in order to do things like secure loans, qualify for mortgages, rent apartments and lease cars, among other things. 🇺🇸Plaid Income gives lenders — both at FinTech companies and financial institutions — verified and permission data on the income, employment status, and tax liabilities of individual users. Link here.
Leading digital payment platform, 🇬🇧Wirex, has launched its hotly-anticipated multicurrency 🇺🇸Mastercard debit card in the UK and EEA, as well as its new rewards program, X-tras, across the globe. Link here.
🇺🇸Mastercard completed its acquisition of the majority of the Corporate Services business of Nets Group, a leading European PayTech company, having met the conditions set out by the European Commission in its approval in August 2020. Link here.
Melbourne-born 🇦🇺Airwallex has acquired Hong Kong's 🇭🇰UniCard Solution Limited, joining the likes of 🇺🇸PayPal, 🇨🇳Alipay, and 🇨🇳WeChat as a Stored Value Facilities (SVF) licensee under the territory's payment regulations. Link here.
BNPL
The covid pandemic has compressed years of online commerce progress into just several months. Some of the biggest winners of the shift are Buy Now Pay Later (BNPL) companies - 🇦🇺Afterpay, 🇺🇸Affirm, and 🇸🇪Klarna all benefited from rising valuations and funding. Link here.
INVESTMENTS
Photographer: Ilja Meefout
There are always startups waiting in the wings to be the next “insert company name here.” In the case of 🇺🇸Robinhood, the stock-trading app valued at $20 billion, there is a growing list of retail-trading competitors who are raising significant venture funding and gaining traction. With 🇺🇸Robinhood having a big share of the market, one of the lingering questions was if venture capitalists would be willing to fund competitors. The answer, as we especially learned this week, is “yes.” Link here.
CRYPTO
PricewaterhouseCoopers (PWC), one of the world’s largest accounting firms, has accepted its first-ever bitcoin payment for its advisory services. An ever-growing embrace of cryptocurrencies and blockchain technology among its clients has seen PwC accept bitcoin as a payment in Hong Kong. According to a 🇺🇸Wall Street Journal report, 🇭🇰PwC in Hong Kong revealed it is working with a number of startups involved in bitcoin and the wider cryptocurrency industry, prompting the firm to accept the world’s most widely-known cryptocurrency. Notably, PwC also confirmed its advent into advising clients about crypto funds and investments, cryptocurrency exchanges, and initial coin offerings – a radically new form of fundraising powered by cryptocurrencies. “This decision helps illustrate how we are embracing new technology and incorporating innovative business models across our full range of services,” said PwC Asia-Pacific chairman Raymund Chao. Link here.
INSURETECH
Home-insurance technology upstart 🇺🇸Hippo Insurance is teaming with a special-purpose acquisition company to go public, the latest insuretech business to tap equity markets and challenge traditional insurers head-on. Link here.
Title insurance startup 🇺🇸States Title is going public in a $3 billion deal with a blank-check firm, the latest sign of investor interest in companies that digitize the residential real estate industry. Link here.
FUNDING
🇩🇪nextmarkets AG, a neobroker founded by two brothers from Cologne, has raised $30m to expand its trading platform to more countries around Europe. The Series B round was led by previous investors Alan Howard and Christian Angermayer, while Peter Thiel was also an early investor. Link here.
🇬🇧Countingup, the U.K. FinTech offering a business current account with built-in accounting features, has closed £9.1 million in Series A investment. Link here.
🇺🇸Cardlytics announced its planned acquisition of 🇺🇸Dosh for $275 million in cash and stock. Founded in 2016 by Ryan Wuerch, the company grew quickly. Link here.
🇳🇱Unslashed Finance, a company that provides insurance products for crypto assets, announced its $2M funding round. Link here.
Mexican salary advance startup 🇲🇽minu has raised $14 million in Series A funding. Link here.
🇩🇪Monite launches a finance management platform that automates the admin and accounting processes for SMEs and announces it has raised €1.1M in pre-seed funding. Link here.
French alternative lender for the self-employed 🇫🇷Mansa has raised €18m. Link here.
FOUNDERS & INVESTORS
There are a few venture investor names that come to mind when thinking about backers of the most valuable FinTech and media unicorns. 🇺🇸Snoop Dogg is not usually among them. Perhaps that’s an oversight. Link here.
🇬🇧Mouro Capital, the fintech venture vehicle backed by 🇪🇸Banco Santander, is to pool the services of two of its portfolio companies to create a new joint venture for online property sales in Mexico. Link here.
MOVERS AND SHAKERS:
🇺🇸Mode announced the appointment of Jonathan Conway as Chief Technology Officer. Jonathan brings a combination of experience across fintech, payments, as well as Open Banking. Link here.
🇬🇧Chip, an award-winning savings app, has announced the appointment of Tom Evans as their new Chief Technology Officer. As CTO, Tom will lead product and engineering teams with the aim of building and delivering new features, including the upcoming Investments Platform and the hotly anticipated ChipX. Link here.
London-based startup jobs company 🇬🇧Otta.com looked into how salary expectations compare between women and men who sign up to its platform. On average, women say that they would accept a lower salary for a role than men with the same amount of relevant professional experience. The good news, though, is that Otta finds that when candidates are actually offered jobs by startups, there are no “significant differences” in the salaries offered. Link here.
This ends my weekly digital fintech newsletter. Thank you for reading to the end! If you liked it, I invite you to like, share and/or leave a comment below. You may find more information regarding my newsletter here.
If there is anything else you think I’m missing, please don’t hesitate to reach out by email at bonjour@marcelvanoost.nl.
If you are looking for my weekly digital banking newsletter (the one divided by regions), you may find it here.
Let me know if there are any questions or news/insights worth mentioning in next week's newsletter. Until the next!
Regards,
Marcel van Oost