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The fintech highFIVE! - 22 January 2021

FinTech High Five (2)

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 each week.

*We’re socially distant here. Virtual high-fives only 👏 Please don’t hit your screen.

All eyes on Plaid 👀

Last week, Visa and Plaid announced that they had terminated their merger agreement. The £5.3 billion was stopped when the US Justice Department filed a suit to block it by filing an antitrust complaint on the ground that the acquisition by Visa would “eliminate a nascent competitive threat that would likely result in substantial savings and more innovative online debit services for merchants and consumers.”

Visa’s CEO Al Kelly said he was confident that they would have been able to overturn the decision but cited the substantial amount of time that would need to be spent on it as the reason for dropping the merger, especially given that they announced the merger last year.

While the cancellation of the merger is certainly bad news for Visa, the same cannot be said for Plaid. Plaid had a surge in demand for their services in 2020 leading to 60% customer growth, or more than 4,000 clients. This kind of growth means that their valuation of $5.3 billion dollars at the start of January 2020 when the merger was announced, is now out of date.

While Plaid are optimistic and looking to the future, their competitors are seeing the merger failure as a positive, or maybe even an opportunity and Jamie Dimon, CEO of one of the world’s biggest banks, JPMorgan Chase said banks should be “scared sh*tless” of the threat fintechs and other emerging competitors bring to them because “fintech players have “trounced” the traditional banks in recent years” as CNBC puts it.

Blockbuster fintech investments 🤑

The last two weeks have seen the announcements of several blockbuster fintech deals.

London’s very own Checkout.com announced a $450 million Series C, which tripled their mid-2020 valuation up to $15 billion, making them Europe’s most valuable fintech, stealing the crown from Klarna. Curve, also hailing from London, sealed a $95 million equity round to support their launch in the US. Curve combines multiple cards and accounts into one smart card and app. Finally from London, PPRO, a payments infrastructure provider, has raised $180 million, adding them to the blessing of UK unicorns currently dominating the fintech investment space!

In Singapore, ride-hailing app Grab has raised $300 million for its fast-expanding financial services unit. And in the US, buoyed by the pandemic-fuelled growth in cross-border digital payments, fintech-as-a-service platform Rapyd has bagged $300 million in a Series D led by Coatue.

Tom Blomfield exits Monzo citing mental health 🙇

The founder is departing the challenger bank at the end of this month, where he held the role of CEO at the bank until May last year, when he stepped into the newly created President role, and resigned from the board. He has led the bank since it was founded in 2015 but has now handed over responsibilities to CEO TS Anil who stepped into the role last year.

Tom was open about the effects that Monzo’s turbulent year last year had on his mental health and wellbeing, saying he was close to burnout. His candour is very refreshing, it is nice to hear a senior leader within our industry talking openly about the struggles of mental health and pressure during a year which tested and pushed us all.

Tom hands over to TS and COO Sujata Bhatia, with Monzo having almost 5 million customers, their total weekly revenue is now 30% higher than pre-pandemic, helped no doubt by over 100,000 paid subscribers across Monzo Plus and Premium in the last five months and despite a lower valuations, recently raised £125 million from new and existing investors.

We wish him all the best.

Huge partnership announcements! 👯‍♀️

Goldman Sachs has partnered with card issuing startup Marqeta to support the launch of Marcus checking accounts this year. Goldman hopes that the partnership will enable it to create more personalized and feature-rich digital banking services for its customers.

PayPal has become the first foreign company to acquire full ownership of a third party payments provider in China. The change means that US company PayPal has become the full owner of GoPay, given that PayPal Information Technology is its fully invested subsidiary, while it also holds 100% of equity in GoPay’s other shareholder, Beijing Zhirong Xinda Keji Co., Ltd.

UBS is in talks to invest $400 million in Indian digital payments startup Paytm which is a great move considering a recent survey which revealed that a third of Indian households use digital payments.

Konsentus has acquired Open Banking Europe, the operator of a centralised PSD2 directory supporting bank data sharing initiatives, from EBA Clearing subsidiary Preta.

What goes up, must come down 💥

Maybe I spoke too soon? It seems my last update signalled the peak for the surge in Bitcoin valuation!

Last week, Bitcoin prices plunged due to selloff thanks to it’s record high valuation of around $42k. $10,000 was wiped off the value of Bitcoin, a whopping 20%, this also wiped 20% off the $1 trillion market valuation - ouch!

Bitcoin is now levelling out between the $20-30k mark. Since the selloff, the UK government has warned about the dangers of crypto investment, while in the US, there are hopes that a new wave of Biden administration stimulus will boost Bitcoin again.

🗞️ x5 big news (it’s x7 this week, sorry!)

📰 x5 interesting articles

⚠️ x5 funding announcements

If you are sharing on Twitter, please use the hashtag #fintechhighfive and mention me, @gary20203, or @money2020.

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22 January 2021