Adyen is an underrated FinTech Giant ??; Stripe’s Fast fails too fast? ??♂?; Some fail Fast while others go BIG - Bolt acquires Wyre for $1.5B ??

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Last week (4-8 April) was a super exciting one when it comes to FinTech.?We will look at Adyen being the underrated FinTech giant; Fast failing too fast while Bolt doing a massive acquisition, and other interesting news and developments.

Without further ado, let us dive into what happened in the financial technology sector last week. Let’s connect the dots.

Adyen is an underrated FinTech Giant. But that might change soon ??

The news ???When you think about online payments or payment processing, you usually think about?Stripe, the $95 billion FinTech behemoth that is taking the world by storm. As of recently, you might have started to think about?Checkout.com?too, which earlier this year has hit a $40 billion valuation.

But there’s another payments heavyweight that is for some reason forgotten (at least for the general public), yet has been making tons of money, is profitable for years, and soon might become an even bigger force in FinTech. It’s the Dutch payments giant?Adyen.

It has just announced its expansion beyond payments to build embedded financial products. And this is a huge move.

More on this ???These products will enable platforms and marketplaces to create tailored financial experiences for their users such as small business owners or individual sellers. The suite of products will allow platforms to unlock new revenue streams and increase user loyalty. Here’s what is known thus far:

• Starting with?Adyen for Platforms, the company enabled platforms to embed payments into their offering and deliver a unified commerce experience across sales channels and geographies.
• Adyen then launched?Issuing?to improve this experience by enabling platforms to offer their users virtual and physical cards for business transactions and to directly receive funds faster. Going forward, Issuing will be included in a full suite of embedded financial products.
• Among the products that will be built out are?multi-currency accounts, allowing users to receive payments, initiate payouts, and safely store money all in one place. These accounts will also enable platforms to facilitate the extension of financing to their users within the platform interface.

These and earlier launched solutions are all part of Adyen’s plans to dominate the world of payments, and maybe - the world of finance. Here’s the takeaway:

?? THE TAKEAWAY

One-stop-shop for other shops ???At the core, Adyen’s embedded financial product play is aimed at platforms (and other digital businesses) that want to centralize their users’ financial needs in a single ecosystem. In other words, it wants to empower them to become a one-stop-shop for all their users’ needs. Think of it as if Facebook would start from scratch and would like to offer you checking accounts or digital wallets, payments, launch a marketplace again, etc. - so Adyen would be the tech & licensing stack that would power it all. It already does that for a number of well-known companies like Spotify, Booking.com, Uber, among others. On the other hand, this move further puts Adyen as a one-stop shop for all things FinTech too. It earlier has put much more focus on unified commerce (launching an mPOS offering in the EU/UK/US, which lets merchants accept all major payment types (including contactless) and also offers an app management feature that lets merchants use third-party business apps), and now having the embedded financial products too, Adyen is very well positioned to supercharge its growth. Further. Despite having processed €516B in 2021 (up 70% year-on-year) and reporting €1B in net revenue (46% up year-on-year), Adyen stock is down circa 25% in the last 6 months. Not to mention the fact that it’s around 50% behind Stripe’s last valuation. Hence, it’s obvious that Adyen is clearly underrated. But solid foundations and new product launches will definitely change that soon. Keep an eye on them!

Stripe’s Fast fails too fast? It was just too fast & too luxurious ??♂?

Breaking?? Fast,?a startup that focused on online checkout, announced late yesterday that it will shut down. The Information first reported the company’s final chapter.

In a statement, the company said that in the wake of?making great strides on our mission of making buying and selling frictionless for everyone, we have made the difficult decision to close our doors.

USP ?? Fast Checkout?offered a one-click purchasing process that reportedly took less than a second, without requiring a password or manually inputting information for every order. Buyers were automatically signed up for Fast after their first purchase, making future shopping effortless on any website with Fast. Sellers could also place Checkout on individual product pages, enabling buyers to forego the cumbersome shopping cart process altogether.

In other words, Fast was like?Shop Pay?or?Amazon Pay,?just that… There’s no?just, that was literally it.

Crazy numbers (in a bad way) ???The company has raised a whopping $124.5M since its 2019 inception, according to Crunchbase. That’s pretty massive if you ask me… Besides Stripe, which led both their Series A & Series B, other investors include Index Ventures, Susa Ventures, and Global Founders Capital.?That’s solid backing.

Despite millions raised, the company’s burn rate was even crazier - Fast was said to be burning as much as $10 million. Every single month.?Unsustainable?is an understatement here.

So, what does this tell us??At the core,?Fast was just too fast and too luxurious. But there’s more to that, so here’s the takeaway:

?? THE TAKEAWAY

Too fast & too luxurious.?Let’s just look at the fundamentals, which were way too?slow?for Fast. First, they raised $120M to build?Shop Pay?or?Amazon Pay?button, which immediately draws some suspicions. Some might argue that perhaps they should have validated their business model first (or for a longer) before raising that kind of money and hiring as many as 500 (!!!) people (who gladly are finding new jobs as we speak). But let’s say that this is fine because even the business model validation doesn’t mean you could have prevented failure. Now, let’s look at the actuals. Fast was burning $10M per month. I say it’s crazy, but you can argue that Uber was losing nearly $230M every month in 2020. That’s fair, and that’s almost always the case for any high-growth startup. The huge difference here is that Uber generated $925M every month with that burn while Fast did only $50,000 per month in sales. That’s beyond nuts ?? I’ve also read some stories that Fast was offering as much as $10,000 for some websites so that they would just integrate its checkout. If that’s actually the case, it pretty much summarises everything. Zooming out, as?I’ve written last month, startups that don’t have a sustainable business model and rely primarily on VC money & growth at all costs are almost always doomed to failure. Fast isn’t an exception here, and it was way?too fast and too luxurious. Finally, the fact that Stripe didn’t acquire them and just allowed them to fail tells you a lot.

Some fail Fast while others go BIG - Bolt acquires Wyre for $1.5B ??

The scoop ???Payments?decacorn?Bolt?(last valued at a whopping $11 billion) has acquired blockchain infrastructure provider?Wyre?for a reported $1.5 billion.

Given the reported price tag is true, this would make it one of the largest crypto acquisitions that did not involve a special purpose acquisition company (SPAC).?Not too shabby!

The USPs ???Founded in 2014,?Bolt?provides online retailers with a?one-click checkout, authentication, payments, and fraud protection offering. In other words, it’s like?Fast?but with more sales. By the way, check out my latest on Fast in case you missed it:

Too fast, too luxurious: lessons from the failure of Stripe-backed Fast

Wyre?was founded in 2013 and it offers several API solutions, including the ability to buy, sell, and hold cryptocurrencies, bank-supported crypto-to-fiat exchange, and crypto compliance services.

So what does this tell us??Well, first, when some fail - others go bigger. But there’s more to that, so here’s the takeaway:

?? THE TAKEAWAY

Standing out in a crowded market.?First and foremost, this acquisition is part of the bigger trend we have been seeing in FinTech for quite some time now - traditional payments companies are increasingly adding crypto solutions and vice versa. The lines between crypto and TradFi are hence getting more and more blurred. Now, when it comes to Bolt, the Wyre buy simply means that crypto capabilities will be integrated into the one-click-checkout APIs. This is important because (a) it will enable Bolt merchants to accept crypto payments and hence make Bolt attractive for a bigger set of users, (b) the company said it will enable customers to purchase cryptos and NFTs via Bolt, hence, extending the company’s use cases beyond just one-click checkout, and (c) use Wyre’s tech stack to introduce to (probably crypto-first) offerings that would help drive merchant acquisition and diversify its business. Zooming out, this is all about diversification and differentiation in a highly competitive and crowded payments market. Even with Fast no longer on the market, Bolt still is left to compete with payment titans like PayPal, Apple Pay, Amazon Pay, etc. which all have strong adoption and huge market share.

Extra Reads & Quick Bites for Curious Minds??

• Amazon power ?? Amazon?is staying with JPMorgan Chase as an issuer of its Prime credit card after considering a switch to American Express, CNBC reported. American Express and Synchrony were in contention to fill the gap if JPMorgan was ditched while Mastercard maneuvered to displace Visa as the payments network, sources told the news outlet. As a result of months of negotiations, Amazon’s decision allows JPMorgan Chase to issue the tech giant’s flagship rewards credit card. Like Walmart, Amazon has a reputation for driving hard bargains with partners. Amazon succeeded in convincing potential credit card issuers to accept their terms.
• FinTechs finally threaten banks? ???JPMorgan’s CEO thinks so.?Jamie Dimon, CEO of JPMorgan Chase, in his annual letter to shareholders, wrote: “The growing competition to banks from each other, shadow banks, FinTechs and large technology companies is intensifying and clearly contributing to the diminishing role of banks and public companies in the United States and the global financial system.” Drilling down into the competitive landscape between traditional financial institutions (FIs) and digital upstarts, Dimon said that non-banks — from payments companies and FinTechs to exchanges and Big Tech — are directly competing with banks and do so while operating outside the banking regulatory system. Read more?here.
• More to the blurred lines trend ???Nium, a platform for money movement, has unveiled Crypto Accept, an API-based solution that enables global businesses to accept crypto payments. Nium Crypto Accept supports Bitcoin (BTC) and Ethereum (ETH) payments at launch, with plans for more currencies in 2023. Online merchants can accept payments in crypto with zero price volatility or risk. Settlement happens the next business day in USD or another fiat currency – directly to their bank account.

Money Moves??

• Fintech?Datanomik?has raised a $6M seed round to advance its mission to bring financial data access to businesses across Latin America and emerging markets, according to?latamfintech.co.?
• London Stock Exchange Group (LSEG)?is continuing its acquisition spree, buying digital ID firm?Global Data Consortium?to help clients with know your customers (KYC) requirements. Founded in 2012, GDC provides the global name and address matching capabilities from over 300 data sources in over 70 countries.
• Fidel API, a financial infrastructure platform, has raised $65M in Series B funding.

Continue reading by subscribing to?Linas's Newsletter.?You will receive fresh news about FinTech with hot takeaways every day.

P.S.?You might enjoy my earlier pieces as well:

?? Bitcoin in 2021: a story in 5 graphs, and what might come in 2022

???A Wise pitch deck that led to London’s biggest and most successful direct listing ever

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About: I am?a business developer, sales professional, FinTech strategist, as well as Cryptocurrency and Blockchain enthusiast. I'm highly passionate about Financial Technology and Digital Innovation, and strongly believe that it will change the world for the better. Apart from my daily job at a global payments startup where I'm leading the company's expansion into Europe, I'm an active member of the FinTech community and a TechFin evangelist.

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