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The Fintech highFIVE!

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.

Stripe’s $95 billion valuation 🤑

Stripe recently closed a $600m Series H funding round which brought the payments giant’s valuation to a whopping $95 billion, this makes them the most valuable Silicon Valley private company. The valuation has also tripled in the last year alone!

Stripe was founded in 2010 by Irish brothers Patrick and John Collison, who describe the service as low margin, which makes it competitive. Stripe’s software makes it simple for any website or app to accept payments, without having to obtain their own licences or strike deals with the many different banks and card operators that the company has already integrated.

Stripe plan to use the raised funds to expand their offering in Europe, with particular attention on the brothers’ home of Ireland.

Stripe’s success is a particularly proud moment for Europe, given that outsiders are now the top Silicon Valley darling, this article looks into whether that could happen again nowadays.

Crypto is legit, right? 👌

Cryptocurrencies continue their move into mainstream adoption as a number of large traditional financial institutions look to develop their crypto offerings to satisfy demands.

Most likely down to the recent success and surges in valuation from bitcoin, the market has joined the hype, and led to mergers and consolidation, with Paypal having recently acquired cryptocurrency security startup Curv and Goldman Sachs have re-activated their crypto trading desk.

As well as that, a number of cryptocurrency technology companies have received huge rounds of investments:

The regulators have also turned their attention back to crypto: in the US, legislation has been introduced to create a working group composed of industry experts and representatives from the SEC to evaluate the current legal and regulatory framework around digital assets. And in the EU, ECB President Christine Lagarde says bitcoin needs to be regulated at the international level.

Looks like crypto is in the mainstream to stay, but it will have to follow the rules of the game.

The Greensill fallout 🎃

The fallout from the collapse of supply chain finance company Greensill continues...

Wagestream, a UK fintech which gives workers early access to their salaries, has bought Australian competitor Earnd, an Australian fintech which was one of Greensill’s key subsidiaries. Wagestream plans to use the purchase to support their growth in Australia, they made the purchase of an undisclosed amount from Greensill’s administrators, who are currently trying to return $1.5 billion to Greensill’s creditors.

A formal investigation has been launched into former UK prime minister David Cameron’s lobbying for Greensill. Mr Cameron has come under growing pressure to explain himself for contacting Rishi Sunak, the chancellor of the exchequer last April while working as an adviser for Greensill. He was trying to secure access to hundreds of thousands of pounds of emergency COVID loans, which are not meant to be available for lenders. Mr Cameron is expected to say he was a Greensill employee at the time, rather than a consultant which would clear him of wrongdoing, as people who lobby on behalf of their own organisation do not need to declare themselves on the lobbying register.

Greensill, launched in 2011, received a whopping $1.45 billion in investment in 2019 with $800m from SoftBank’s Vision fund, who are top of the list for Greensill’s administrators.

New ways to pay

Two really interesting developments in how we pay:

  1. India's Axis Bank has rolled out a range of wearable devices for contactless payment transactions. Dubbed 'Wear 'N' Pay', the programme enables customers to leave their wallets at home and use payment bands, key fobs, or loops to make payments on the go.
  2. Shoppers in Moscow will soon be able to 'pay-with-a-glance' thanks to a joint initiative with Sberbank and Visa. Customers can select the Pay with a Glance option in the cards or profile sections of the Sberbank Online mobile app and specify the card to be used for payment.

Revolut’s global expansion comes with mixed results 🌐

Revolut has applied for a banking licence with the FDIC in the US which would enable them to provide customers there with a broad range of financial services products. They currently offer services through Metropolitan Commercial Bank.

The announcement came almost immediately after their decision to depart Canada after spending two years in beta there without a banking licence and failing to compete with the Canadian incumbents.

Having their own banking charter in the US would be key to their success in becoming a global financial services superapp.

Revolut’s rise hasn’t been without incident. Last year they were in the press for dismissing staff during the pandemic. Recent news has been more positive, they announced that they had become profitable towards the end of last year and applied for a banking licence in the UK in January 2021.

🗞️ x5 big news

  1. Chime targets IPO on mammoth valuation: American digital banking has been talking to investment banks about an IPO that would value it at $30 billion 2.Visa takes advantage of Brexit: Visa is set to raise interchange fees on cross-border transactions between the UK and EU
  2. Fintech challenges: A report by ClearBank reveals a multitude of challenges fintechs experience at the hands of their agency bank’s shortcomings
  3. FATF after NFTs: Financial watchdogs have DeFi in their sights, alter wording around NFTs
  4. eToro to IPO via SPAC: Online investment platform is set to go public via a merger with blank cheque company FinTech Acquisition Corp that will value the business at about $10.4 billion

📰 x5 interesting articles

  1. The unicorn world order
  2. Fin VC’s Logan Allin predicts 2021 will be year of fintech IPOs
  3. Fintechs, Chinese investors are coming for you
  4. Sole female founders raised $1b less in 2020 despite record funding in the US
  5. The promise of payroll APIs

⚠️ x5 funding announcements

  1. +$270m for [PPRO](https://www.linkedin.com/company/ppro/): PPRO extends latest round adding JPMorgan and Eldridge to grow its localized payments platform
  2. +$170m for [Flutterwave](https://www.linkedin.com/company/flutterwave/): African payments technology processor secures Series C funding from a group of international investors
  3. +$100m for [Socure](https://www.linkedin.com/company/socure/): Machine learning-based digital identity verification firm has joined the unicorn club off the back of a Series D funding round
  4. +$75m for M1 Finance: Super app raises Series D
  5. +$50m for [Pollinate](https://www.linkedin.com/company/pollinated/): Merchant acquiring startup closes Series C funding round led by Insight Partners, NatWest, Mastercard and NAB

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

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24 May 2021