There is a pattern of challenger banks raising big funds. According to Fintech Global, seven of the ten biggest WealthTech round in the first half of 2020 were developing products in the digital banking space. However, investment into the WealthTech sector in general seems to be drying up.
Here’s some context: between 2015 and 2019, the amount of investment injected into the global WealthTech industry jumped from $1.8bn to $8.2bn, according to FinTech Global’s research. Yet, between January and June 2020, the sector only raised $3bn in total, putting the sector on course for its worst year since 2017 when the industry raised $6bn in total.
For an in-depth analysis, read more here.
Listen to the latest episode of the Wharton FinTech podcast where Miguel Armaza sits down with Greg Krasnov, Founder & CEO of tonik, a digital bank in the Philippines with a mission to revolutionize the way money works in Southeast Asia.
Greg is a serial entrepreneur at heart and launched his first business at the age of 18. Tonik is backed by major industry investors, including Sequoia Capital, Point72 Ventures, Insignia Ventures Partners, and Credence Partners.
Also, listen to TechCentral Podcast’s interview Bettr co-founders Tobie van Zyl (CEO) and Andrzej Stempowski (chief technology officer). Bettr.App is a FinTech start-up that has been working on building a “new challenger” in the South Africa’s finance sector that promises to offer a “better alternative”.
In this interview they cover their plans, how the idea to build the bank came about, why it’s specifically targeting the youth (millennials and Generation Z) and how hyperscale cloud service providers have made launching a bank in 2020 to challenge the big incumbents much easier than in the past.
This week our interview recommendation is with Razer Fintech CEO, Lee Li Meng. Based in Singapore, Razer Fintech has a cash balance of over $500 million and zero debt. Bloomberg’s interview with Lee Li Meng covers how the company plans to leverage extensive gaming tech expertise and a largely millennial client base to build a platform for digital banking and financial services.
Find out more here.
NOW, ON TO THE SUMMARY OF LAST WEEK'S DIGITAL BANKING SPACE
The merger of crowdfunding platforms Crowdcube and Seedrs was announced earlier this week. AltFi spoke to Darren Westlake, the CEO of the new business and Jeff Kelisky, executive chairman, about the merger. Find out more here.
MOVERS AND SHAKERS:
Temenos announced that Roger Klantschi has been appointed as Executive Vice President of Delivery, Americas, effective immediately. In this new role, Roger will be leading Services and Support for North America and Latin America & Caribbean, with a focus on building customer value and success in the region. Roger will report directly to Alexa Guenoun, President, Americas, and Global Head of Partners. Link here.
iBanFirst appointed former Groupon Sales Operations Director and M&A banking specialist, Grégoire Andrieu-Guitrancourt, as its Chief Revenue Officer (CRO). The appointment is part of iBanFirst’s international expansion strategy, as the company unites its European focus and global ambitions to become one of the world’s leading financial services providers. Link here.
Northmill Bank appointed Simon Nilsson as Chief Commercial Officer. During his years at Northmill Bank, Simon Nilsson has had the role of strategically responsible for the neobank's customer-related inquiries and has been part of the bank's Executive Management Team. Link here.
Envestnet Yodlee appointed Tim Poskitt as country manager for Australian and New Zealand operations. He was previously head of alternative finance and fintech at illion. Earlier in Poskitt's career he worked in global banking for HSBC and in corporate banking for Barclays. Link here.
Judopay partners with Mastercard, Amex rolls out Amazon business cards, and Monese integrates with Thought Machines’ core banking platform.
Capify has closed an £8m equity funding round. The firm, which was formed by the merger of four companies operating in four countries: AmeriMerchant (USA), True North Capital (Canada), United Kapital (UK) and AUSvance (Australia), back in 2016, offers online merchant cash advances and business loans. Link here.
Revolut will offer U.S. customers a 4.5% bonus rate on savings deposits, but there is a catch. Customers will receive the bonus on top of their existing annualized rates of 0.25% or 0.5%, Revolut said. The amount of funds eligible for the new rate will be equivalent to how much a customer has spent in the previous month using the company's debit card, its flagship offer. Link here.
Monument, a new digital-first UK bank for the mass affluent, is heading for a 2021 launch after securing a Series A investment and restricted banking license from UK regulatory authorities. The Bank will focus exclusively on clients largely underserved by the established ‘premier’ and private banks, such as busy professionals, doctors, lawyers, accountants, entrepreneurs and investors with a net worth of between £250k and £5m. Link here.
American Express announced the launch of the new Amazon Business American Express Card and the Amazon Business Prime American Express Card for small businesses in the UK. The Cards offer a host of rich rewards and payment flexibility designed to help businesses better manage their cash flow and gain greater insight into their spending. Link here.
Gemini announced its expansion into the United Kingdom, which will allow UK based customers to make secure cryptocurrency exchanges in pounds sterling (GBP). The company can now safely launch in the UK after it was granted an Electronic Money Institution (EMI) license by the Financial Conduct Authority (FCA) earlier this year. Link here.
Judopay announced a partnership with Mastercard to move towards a touch-free payments future. The fintech, which is trusted by the likes of Wahaca, KFC, itsu and fellow fintech Chip to run their mobile payments, will deepen its presence across Europe, Asia Pacific, Australia and the US thanks to the partnership with Mastercard. Link here.
Monese and Thought Machine have teamed up to help the digital bank realise its expansion plans. The digital bank has integrated Thought Machine’s core banking platform, Vault, to help it build products quickly. Monese, which is available in 31 European countries, will be able to use Vault to introduce new features and onboard more customers than was previously possible. Link here.
B-North raised a further £1m as it moves closer to obtaining regulatory approval. B-North has teamed up with County Durham fintech specialist, Growth Capital Ventures (GCV), to announce the fundraise, which is part of a £20m series A fundraising round designed to give B-North the necessary capital to finalize its banking license process. Prior to this latest raise B-North had completed two fundraising rounds worth a combined £6.9 million. Link here.
Ebury partners with Nexi, Joko seals Series A, and Bulgarian Paynetics aquires Wirecard’s UK & Ireland corp card portfolio.
Nexi, the leading Italian PayTech in digital payments, signs a partnership with Ebury, one of the world’s leading Fintech companies providing global transaction banking services to businesses. According to the agreement, Ebury, founded in 2009 and with offices in 20 countries including Italy, joins Nexi Open. Nexi’s partner banks will be able to offer their clients the full suite of Ebury services, including international cash management, FX risk management and import/export lending. Link here.
Mambu and Ranqx partner to offer solution for SME banks and lender. By utilizing Mambu’s API-first digital banking platform, Ranqx aims to provide frictionless digital lending experiences, loan origination, decisions and monitoring, for small and medium-sized enterprises. Link here.
Joko, a French FinTech company aiming to disrupt cashback rewards, has raised a €10 million Series A round to begin expanding into other European countries. The funding comes from two French VCs, Partech and Axeleo Capital, who also participated in a €1.6 million seed round last year. Link here.
Bulgarian e-money institution Paynetics has acquired the corporate payout card portfolio of Wirecard UK and Ireland. The deal will see Paynetics work with corporate customers, who have previously relied on Wirecard infrastructure and technology for card issuing and payment services, to adopt Paynetics for the continuation of their existing card program, which otherwise faced termination. Link here.
Jumio acquires Beam Soluntions’ AML technology, Loqbox launches credit building offering, and Credit Karma has a new checking account.
Jumio Corporation, an online identity verification FinTech based out of Palo Alto, is growing exponentially. Geographic expansion – particularly its Asia-Pacific business – is spurring triple growth rates. Its shift to a KYX platform is opening its services up to new types of integrations, which feeds into its third growth vertical: finding opportunities beyond financial services. Link here.
Multi-award-winning UK Fintech Loqbox today announces the launch of the only free credit building solution (irrespective of where they bank) across 40 states of America. From today, 80% of Americans now have the chance to build their credit score while they save money without it costing them anything. Link here.
Credit Karma, the company that turned the promise of a free credit score into a business worth over $7 billion, is joining the ranks of “neobank” startups offering a checking account. The product will be folded into Credit Karma Money, which launched last year as a savings account available to the company’s 100 million members. Link here.
Marqeta, Inc, the global modern card issuing platform, and Mastercard announced an extended global partnership to expand into new geographies, open access to new products, and launch additional card programs together. As part of this partnership, Mastercard has also made a financial investment in Marqeta. Link here.
Colombia has the highest FinTech adoption rate in Latin America, with 76 per cent of its population using FinTech services and the industry growing at about 120 per cent a year. Investors have poured more than $1bn into the industry in the past three years, $300m of which came during the first five months of the pandemic, according to Colombia Fintech.
Read more here.
Xinja has closed its public roadmap after delays in delivering some of the action items on it, which it attributed to shifting business priorities and a lack of development resources. In a blog posted today, Xinja co-founder and customer experience director Camilla Cooke wrote that closing the Trello-based roadmap would allow the neobank more flexibility to change course when needed. Link here.
Thunes, which operates a global B2B cross-border payments network, continues to attract investment as emerging markets take off. The latest Series B funding round sees Africa-focused Helios Investment Partners leading the US$60 million investment in the Singapore-based company. Additional investors include Checkout.com as well as existing investors GGV Capital and Future Shape. Link here.
Filipino online payments firm PayMongo has raised $12 million in a Series A funding round led by US giant Stripe and joined by Y Combinator, Global Founders Capital and Bedrock Capital. The firm says it has seen transaction volumes soar since the Covid-19 pandemic hit, with thousands of firms signing up to its products and services as they seek to move online during lockdown. The new funding will be used to roll out new products and build up PayMongo's product, design and engineering teams. Link here.
Revolut and SNACK by income announced a partnership to incorporate lifestyle-based insurance offerings on Revolut's app. Through bite-sized premiums, linked to daily lifestyle activities such as dining, taking public transport, spending using their Revolut Visa debit card as well as clocking steps on Fitbit, Revolut customers will have the full flexibility to purchase insurance products, from accumulated spare change in their Savings Vault on the Revolut app. Link here.
This ends my weekly digest. Let me know if there are any questions or news/insights worth mentioning in next week's digest. Until the next!