Future of FinTech | Edition #28 – July 2022

Hola FinTech Geeks!

The week has just begun, and the weekend may seem too far, but that gives us a reason to boost your Tuesday brew with some energizing FinTech scoop! So why not grab a hot FinTech cuppa for a sneak peek into six fascinating themes with the Future of FinTech newsletter? ??

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Buy Now, ‘Pull’ Later:??The BNPL sector has been an observer of quite the uncertainties as of late, and?Zip’s?recent move to pull the buyout of rival firm?Sezzle?is yet another bullet hole for the industry. The blend of soaring interest rates, falling stocks, and rising regulatory scrutiny certainly makes for one strong drink that is sure to keep us all on our toes…

Before we bite into the delectable exclusives from the bustling world of FinTech, we bring you some insights on the?trends across the six verticals?over the last six months. While most of the segments sustained their rhythmic movements on the see-saw of a high-to-medium impact range, it was interesting to note the developments in three divisions in particular:

• The?Green Finance?landscape has quickly turned the tables from its commencing state of low impact toward an all-time high in June, soaring on the cloud-nine that is kept afloat by regulations, industry initiatives, and conscious consumers.?
• The?Embedded Finance?space, on the other hand, has been a spectator of a downward movement from the initial high it was riding on during the first quarter of the year. Perhaps investors and participants are looking towards newer waters to crash the waves of innovation?
• Abiding volatile market conditions have certainly taken a toll on the?DeFi?landscape, which observed a constant low from its inceptive high impact. While the sector seemed to have been debilitated till the month of May, things seem to be picking up as it regains its strength and climbs upwards and onwards to more eventful happenings.

Back to business with the stirring FinTech activities of the past week as detailed in?Edition #28.

Here’s the TL;DR:

• It's been a big week for new launches – with?Tink?increasing its payment stack via the launch of settlement accounts for merchants to take advantage of the payment initiation service (PIS). But Tink isn’t the only one with accounts on its mind, as?StormPay?entered an agreement with?Safenetpay?to "revolutionize financial management," enabling the former to offer multi-currency accounts to its customers.
• Several players contributed to some buzz-worthy events across various regions on the map. Enfuce?launched its cloud-based Card as a Service (CaaS) platform in the UK,?Line Bank?introduced quick credit and unsecured credit loans in Indonesia, and?Mercadolibre?received $233M in funding from Goldman Sachs to expand into Brazil and Mexico.
• To keep the money talk going,?OneCard?was seen to be riding the unicorn as it raised $100M in a Series D round.
• Not just that, but?LTK?also teamed up with?Stripe?to power the new LTK Connect self-serve solution, making creator payments simple, instant, and secure.
• Climate-friendliness seemed to be a motto last week, as?Mastercard?awarded?CPICard Group?sustainable card badges for their upcycled plastic content.?McKinsey's launch of?Catalyst Zero, a solution to help clients identify and eliminate carbon from their businesses, also captured attention.

For the longer read, let's get going –

The?Open Finance?segment is scaling new heights, reshaping the very idea of banking. A quick look at the numerous eye-catching affairs for last week:

• Soldo?partnered with?Yapily?to roll out Open Banking-powered account-to-account top-ups for its European customers.?
• TrueLayer?joined hands with?Tymit?to allow customers to make repayments whenever they like through secure, seamless, and instant account-to-account payments.?
• Kinly?selected?MX?for its financial data aggregation and enhancement solutions, with plans to leverage clean data and personalized financial alerts from MX to help Black American communities close the wealth gap and build prosperity.?
• Yodlee?made the headlines for its partnership with?Simply Zibra?to provide users with a digital wallet with access to all their payments in one space, including rewards, accounts, and banking.
• Argyle?and?DigiSure?joined forces to enable vehicle rental and subscription platforms to screen new customers with a turnkey solution, help them rent vehicles, and access insurance products to earn income and advocate for themselves.
• Furthermore,?EQ Bank?teamed up with?Flinks?to provide EQ Bank customers with the ability to share their financial data securely with third-party FinTech applications.

In other news,?Plaid?added accounts from cryptocurrency exchanges on its platform to help consumers create a holistic view of their finances.?Tink?launched settlement accounts aimed at simplifying real-time bank payments for merchants.?Bank of Queensland?was in the news for paying an Open Banking fine as the bank failed to meet the deadline of the Australian Competition and Consumer Commission’s 1 July 2021 start date for Consumer Data Right (CDR) data availability. In addition to that,?Zimpler?hit the bulletin for going live in Norway, becoming the eighth market to offer Zimpler’s account-to-account payments solutions.

The?Digital Finance?segment has brought a wave of exciting partnerships, new launches, and newly secured funding. Let’s dive right into it!

• Mastercard?and?KOHO?came together to provide better financial solutions for all Canadians in the wake of changing consumer demands for convenient payments.?
• Kroo?selected?ClearBank?to give access to all UK payment schemes and accounts for its operational funds to continue building its fully licensed social bank.?
• Finastra?and?HSBC?announced a collaboration to bring Banking as a Service FX capability to mid-tier banks while taking advantage of modern API-driven connectivity with licensed institutions’ secure, regulated infrastructure.?
• Personetics?partnered with?iBank?to provide a better-digitalized banking experience for iBank’s regional bank partners.?
• Melio?and?Capital?One?Business?also teamed up to introduce accounts payable solutions for SMBs to enable Capital One small business cardholders to pay their vendors and suppliers with a card.?
• Moxo?partnered with?Kasisto?to assist Moxo's OneStop client interaction hub with digital capabilities, allowing front-line bankers and relationship managers at financial institutions to focus on the highest-value tasks and conversations.?
• Additionally, Recognise Bank?and?TruNarrative?teamed up to help enhance the customers’ onboarding process experience and transform it by increasing the speed of execution and decision-making.?
• What’s more –?Wechselpilot?announced its partnership with neobank?N26?to help its customers automatically switch to cheaper electricity and gas tariffs every year, where customers can access Wechselpilot's consumer services via the banking app.

Coming over to the launch events,?Revolut?launched ‘learn and earn’ crypto courses to help improve their customers’ knowledge of cryptocurrencies –?including blockchains, popular tokens, and protocols – where customers will be rewarded with DOT tokens for completing short courses about crypto.?Enfuce?launched its cloud-native Card as a Service platform in the UK to drive Enfuce’s European expansion of its complete end-to-end next-generation card issuing and payments processing services.?Monneo?launched an API aimed at Banking as a Service, allowing Monneo’s partners such as FinTechs and online businesses to offer banking services to their customers by accessing the company’s digital banking infrastructure. Moreover,?ABN AMRO’s?freelancer payout solution?Payday?launched a new pilot in collaboration with?Younited?to give freelancers more control over their income.?Bluevine, a FinTech aimed at providing small business banking solutions, also launched its first set of features designed to help accountants serve their clients.?Telda?received final approval from the Central Bank of Egypt to set up the Telda card and app to change how people send, spend, and save money.

As for the various funding rounds:

• FinTech startup?Hyperface?secured $9M in seed funding led by 3one4 Capital and other investors.
• OneCard?entered the unicorn club by raising over $102M in a Series D round led by Temasek Holdings.
• Digital banking solutions provider?Apiture?announced closing a $29M funding round to meet the increased market demand for its Digital Banking Platform.
• That’s not all –?Built Technologies?secured a $23.6M round of funding related to a 'strategic business deal.’

In other news,?Monzo?grabbed headlines for being given a clean bill of health from its auditors for the first time since 2019, after narrowing losses to ~$142M to ~$157M in the previous financial year.?SweepBank,?by Multitude Group’s subsidiary Ferratum Bank plc, also made its debut in the German market, bringing Sweep Deals to combine easy banking services and virtual debit cards with shopping, discounts, and loyalty points.?

The?Embedded Finance?space witnessed an assortment of eventful happenings, much like a balanced diet to nourish your quota of financial hunger.

LTK?and?Stripe?teamed up to power instant, simplified, and secure creator payments for the new LTK Connect self-serve solution to reduce the time from completed work to payment from months to seconds for creators.?SeatGeek?announced a partnership with?Affirm?to provide options to fans to choose new flexible and transparent ways to pay, allowing them more opportunities to experience once-in-a-lifetime moments. Meanwhile, FinTech firm?Pace Enterprise?declared the achievement of its revenue matching its 2021 earnings within the first quarter of 2022. Furthermore, BNPL healthcare?SaveIN?secured more capital, increasing its total seed funding to over $7M.?MercadoLibre?received $233M from?Goldman Sachs?to expand loans in Brazil and Mexico. On the contrary,?Zip?dropped its plans to buy rival firm?Sezzle?weeks after saying the deal was proceeding, citing the reason of “current macroeconomic and market conditions” as the reason to walk away from the agreement.?

The?DeFi?segment was nothing short of an event-filled saga of highlights that made up for quite an intriguing scoop as heat increases in its turbulent environment.

Gelato Network?partnered with?Alpaca Finance?by bringing automatic benefits for both the parties involved in the partnership. DeFi credit protocol?Goldfinch?integrated?AlloyX?to offer liquidity on formerly locked-up loans, allowing Goldfinch lenders the freedom to enjoy and exit and enter lucrative investment opportunities that previously required long-term commitments.?The Connecter?launched an all-in-one DeFi platform to target the future of finance by allowing the money trail to be traced publicly so that available users can track where exactly the money goes.?Cred Protocol?unveiled the result of its automated credit scoring system for users of decentralized finance.?Roxe?also launched a set of DeFi liquidity pools to provide B2B FX Rates, enabling cross-border payments at wholesale FX rates.

On the other hand, DeFi lending services protocol?Morpho Labs?raised $18M in a funding round co-led by Andreessen Horowitz (a16z) and Variant, with the participation of 80 other investors.?Stakefair?raised $670,000 in a pre-seed fund to expand beyond DeFi gaming and towards building an ecosystem that will ease interaction for decentralized and centralized platforms. Not only that, but crypto wallet?Crypterium?also rebranded to?Choise.com?and declared its intent to connect the worlds of centralized and decentralized finance.

The?Platform Finance?space was abuzz with organizations getting together and introducing a series of novel products and services.

StormPay?signed a distributorship agreement with?Safenetpay?to unveil the first phase of ‘StormPay Business’ where SMEs, micro-businesses, and startups can register their interest and start benefiting from its new multi-currency accounts.?Capchase?integrated with?Stripe?to make its services available through the new Stripe App Marketplace.?Pandago?hit the headlines for its strategic partnership with?bKash?to enable merchants and vendors to avail themselves of both Pandago and bKash services conveniently. Besides that,?Virgin Money?and?Superscript?teamed up to provide the business banking customers of Virgin Mobile with customizable, flexible, subscription-based business insurance.

On the launch front,?Line Bank?launched quick credit and unsecured loan features in Indonesia.?StashAway?introduced Flexible Portfolios to enable investors to create and customize portfolios from more than 35 asset classes. This offering adds StashAway’s drive for innovation in the industry to provide an intelligent, convenient, and less expensive alternative to traditional wealth management providers. Moreover,?C6 Bank?launched vehicle-guaranteed credit, also known as 'car equity,' allowing refinancing of up to 70% of the vehicle's appraisal value.?

With launches and partnerships dominating the news last week, the?Green Finance?segment continues to extend its branches towards growth.

Kick-starting right away with the launch news,

• Cathay Innovation?launched a $1B global fund to invest in startups that support industrial and social sustainable transformation.
• Moniflo?made the news for launching its beta program, introducing value-based investing in Europe.
• The?Partnership for Carbon Accounting Financials (PCAF)?released a public consultation on the Global GHG Accounting and Reporting Standard for the Insurance Industry Progress Report, given the increasing demand by the insurance industry to report greenhouse gas emissions.
• Persefoni?was in the news for its plan to launch the Persefoni Portfolio Analytics Suite to enable financial institutions to track, manage and reduce the greenhouse gas emissions associated with their investment portfolios and financing activities.
• Additionally,?McKinsey?launched Catalyst Zero, an end-to-end decarbonization solution, to help clients find and remove carbon from their business operations.

Regarding the various partnerships last week,?CPI's?Second Wave and Earthwise rPVC earned sustainable card badges from?Mastercard’s?sustainable card program.?Bank of East Asia?joined the?Partnership for Carbon Accounting Financials (PCAF)?to manage and disclose data related to emissions indirectly generated from the financing it provides to corporate customers. Furthermore,?The Australian Sustainable Finance Institute (ASFI)?appointed?EY?as the project team to deliver the first stage of the Australian Sustainable Finance Taxonomy Project.

On the funding front,?Carbonext?received an investment of $38M from?Shell Brasil?to protect, reforest and develop the bioeconomy in the Amazon Forest.?5ire?secured a $100M Series A funding, reaching a valuation of $1.5B.?Systemiq Capital, a backer of early-stage climate tech startups, also secured $70M in funding, with plans to fund key areas like regenerative land use, oceans, transportation, and the circular economy.

There’s more –

BNP Paribas Asset Management (BNPP AM)?made the bulletin for its plans to become “the sustainable asset manager of reference in Europe” by the year 2025. The?EU Commission?equally grabbed headlines for making investments of more than $1.8B in 17 large-scale clean tech projects. And while?BNP Paribas?also celebrated its win for the world’s best bank for sustainable finance in 2022,?HSBC?joined in with its own victory of earning the award for being Asia's best bank for sustainable finance in 2022.

Some other happenings in the FinTech universe ??

Adding on to the delight with some more noteworthy affairs that will keep your FinTech appetite satisfied –

• B2B SaaS company?TurnKey Lender?raised $10M in new funding round,?
• Lightyear?secured $25M in a Series A round led by Lightspeed Venture Partners,
• Salary payments FinTech?Kadmos?secured $29.5M via Series A led by Blossom Capital, and?
• Financial infrastructure company?Pico?snagged a $200M investment for M&A opportunities.

And that's a wrap ??

We hope you enjoyed this edition of the Weekly FinTech Brew, and we'll be back with more next week!?

If you're hungry for more FinTech insights, check out some of our other work at?WhiteSight .?

Our latest publications include exploring?Revolut’s Journey In The Search Of A New World Order In Finance ?and?Opening The Doors to Open Innovation in the Financial Services Sector ?in partnership with?NayaOne.

If you're someone who likes to read think pieces, you will likely love our monthly blog?Fintersections , where our team members analyze the convergence of FinTech with the world.

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