By Gary Dempsey Content Leader Money20/20 Europe
Welcome to the fintech highFIVE! 🖐 Every day, I’m amazed by the sheer amount of news and innovation happening in the fintech industry 🤯 Fintech truly has not stopped, even during these crazy times. I can’t help but notice common themes in this huge sea of news — so I’m trying something new to bring these headlines together. Bi-weekly, I’ll be hitting you with the biggest themes seen in the news — all counted down on just one hand. 👊 So gimme 5 🙏 as we celebrate 🙌 the best of fintech.
*We’re socially distant here. Virtual high-fives only 👏 for now! 😉
The developments in the Metaverse are coming thick and fast since he who shall remain nameless made an announcement back in November. The metaverse offers us new ways to interact socially in digital environments, but how we will enable trade in these environments remains to be seen. The metaverse exposes a gap in the market for infrastructure that will support it, including security, marketplaces, and transactional capabilities for an unfamiliar context. Nike recently announced the acquisition of RTFKT Studios, which creates next generation collectibles and will likely be supporting Nike as they create next generation wearables (non-fungible sneakers?) in this new universe. More companies will start creating assets for the metaverse, all will come with a price tag and the huge potential to later capitalize on connecting metaverse-born and metaverse-only assets to the world of real money through cross-metaverse marketplaces, where people can trade and exchange those assets using fiat or, more likely, digital currencies.
Monzo have had an incredible 18 months. Last year, they faced an uncertain future after the pandemic had hit them hard financially, and saw the departure of their Co-founder and CEO, Tom Blomfield, as well as a difficult valuation announcement earlier this year which saw the challenger bank lose almost 50% of their valuation. Now, they have tripled their previous valuation to a total of $4.5b, raising $475m from a number of high profile investors. This is an incredible pivot story, especially given TS acknowledged earlier this year that Monzo was facing a difficult future, but fast-forward six months, and the story couldn’t be any more different. Monzo puts its recent success down to doubling its revenues, new products and tools, and signing up around 100,000 new customers a month taking them to more than 5 million in total. Around 25% of revenue came from products launched during the pandemic, which could include their controversial paid accounts which enable access to open banking features, unlike their unpaid accounts.
Just a year ago, Bitcoin was achieving its highest valuations and then beating it again the following day, amassing huge amounts of new users every day and finally establishing itself and the crypto industry as one that was not to be ignored. A year later, and cryptocurrencies are everywhere, enabled by just about everyone and adopted by anyone who has spare cash or savings which they cannot make money on due to low interest rates. I think this space has been really interesting over the last few weeks, as more and more crypto announcements have been made, with many being backed by major financial institutions and traditional industry players: Maybe the biggest news of all, Nydig, the cryptocurrency technology provider, has raised $1b in a growth equity round that values the company at $7 billion. Nydig has been progressively embedding its technology into major suppliers of banking systems, including Alkami, Allied, CSI, FIS, Fiserv, Jack Henry, and Q2, to enable financial institutions to offer their customers crypto payment services. Crypto company Anchorage raises $350m at $3b valuation, Anchorage enables you to trade crypto assets, and offers a custody solution for big institutions. The funds were raised from a swathe of players including Goldman Sachs. Visa are big in the crypto news this week. They are launching an advisory practice to help clients as they look to enter the world of crypto, especially financial institutions eager to attract or retain customers with crypto offerings and retailers looking to delve into NFTs. They have partnered with payments company Nuvei to launch crypto-friendly debit cards which customers can use to spend crypto funds anywhere that Visa is accepted. Blockchain intelligence platform TRM Labs has raised $60 million in a Series B funding round joined by a host of big-name firms, including Visa, Amex Ventures, Citi Ventures, PayPal Ventures, and Block (formerly Square). Finally (and you can breathe now), Polish crypto infrastrastructure start-up Ramp has raised $53m, the largest of its kind for Poland and showing Europe, while a bit late to the crypto investing pary, is ready to catch up.
Global funding into the fintech industry has almost doubled year-on-year. Fintech companies raised nearly $95b in Q1-Q3 2021 compared to $49b in 2020 (and we still have Q4 to add to the final total!). The amount of deals comes to 106, which means that the deal sizes have been getting bigger. This has been a particular trend in Europe, this year Europe felt like it was Silicon Valley; week after week, 9 figure funding rounds and more billion dollar valuations than ever before. As the year draws to a close, here are some global and regional fintech reports highlighting the industry’s best year yet, including The State of European Fintech (and report link), Europe’s Fastest Growing Fintechs and Global Fintech Funding 2021.
I wanted to highlight some huge M&A deals over the last couples of weeks as I cannot commit to another feature section. These deals are of varying sizes and strategic approach, but all very interesting: The London Stock Exchange has agreed terms to acquire Quantile, the portfolio optimisation platform, extending its post-trade offerings to the over-the-counter derivatives market. Stripe, the global technology company that builds economic infrastructure for the internet acquires Openchannel, a leading provider of app marketplace software. European payment processor Worldline buys into Eurobank Merchant Acquiring, one of the main acquirers in Greece with a 20% market share. Equinix, the Critical infrastructure provider expands into Africa Equinix acquiring MainOne, the West African data center and connectivity solutions provider with a presence in Nigeria, Ghana and the Ivory Coast, for $320 million. SME lender OakNorth acquires cashflow forecasting app Fluidly. Fintech-as-a-service platform Rapyd is boosting its Asia Pacific presence through the acquisition of Hong Kong-based Neat which provides a cross-border platform for SMBs and startups that helps them move into new markets.
If you have any thoughts or questions on this week’s fintech highFIVE, please share them in the comments section below. ✋
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