Future of FinTech | Edition #31 – Aug 2022

Happy Wednesday, FinTech Fam!

We’re halfway to the weekend, so why not enjoy it to the max? Let's get you a cuppa with a whole lot of hot and brimming FinTech scoop to power you through the rest of the week! Get a taste of our Future of FinTech newsletter with six intriguing segments jam-packed with top stories, and don't miss a beat on all things FinTech! ?

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The Year of Layoffs??2021 saw VCs pour in and valuations skyrocket in FinTech, but 2022 looks like the year where the balloon seems to pop, with slashings varying from sweeping cuts to employee whittling. From Klarna to Robinhood, the cycle of layoffs within FinTech is ramping up amid slumping valuations, a tightened fundraising environment, and recessionary risks. Learn more on the subject?here.

Edition #31?is power-packed with the latest FinTech happenings, bringing life to the otherwise ho-hum of the week!

Here’s the TL;DR:

• The unicorns stole the headlines to make it one sparkle-filled week! Brazilian challenger bank?Nubank?reached 1 million cryptocurrency customers in Brazil in less than a month since the launch of its crypto offering at the end of June. Indeed, a gala time for the company! Challenger South African soonicorn (soon to be unicorn)?TymeBank?also went big by acquiring?Retail Capital, a FinTech company specialising in SME finance.?
• The unicorn galore continues to glitter as Indian FinTech unicorn?CRED, a members-only credit card management and bill payments platform, finalised the acquisition of wealth management company?smallcase?in a deal worth a whopping $400M.
• The more, the merrier, they say. While?Citi?made headlines for launching its new?Sustainable Time Deposit (TD)?solution in the Asia Pacific, aimed at enabling clients in the region to invest excess cash in alignment with their sustainability goals,?Visa?also announced the launch of Visa Eco Benefits in the Asia Pacific. Visa cardholders can now calculate their carbon footprint, offset it, or donate it via their bank's app or website. Big banks keeping their plates filled with greens lately!
• Maintaining the FinTech grass green, New York-based?Grasshopper, a woman-founded, client-first digital bank, secured $30.4M in funding. Grasshopper will use the fresh funds to empower its ability to offer tailored digital banking in the business and innovation sectors. Further watering the FinTech field was Dubai-based BNPL company?Tabby, which announced a $150M credit facility with Atalaya Capital Management and existing investor Partners for Growth (PFG), a move that will strengthen its balance sheet and boost transaction volumes. Quite a boost for the FinTech ecosystem!
• To make things even more interesting,?Gucci?trode down the ramp for Web3 initiatives by allowing crypto nerds to purchase its products with?ApeCoin?in its stores. This high-end Italian fashion giant has become the first major brand to accept payments in the form of the Bored Ape Yacht Club-affiliated ApeCoin (APE). That’s how Gucci keeps up with trends!
• Joining in the Web3 ramp was?Sygnum Bank?as well, having expanded its bank-grade staking offering with Cardano (ADA) so that clients can conveniently and securely stake the protocol. But the idea of virtuality isn’t limited to just the DeFi domain –?Yapily, too, had the headlines yapping about its Yapily Virtual Accounts, launched to bring more transparency to real-time payments and meet the needs of both the merchants and the PSPs.?

For the longer read, let’s get going —

The?Open Finance?segment was brimming with opportunities, bringing waves of new partnerships across the space. Diving right into it –

• Ecospend?partnered with?CDER Group?to provide its account-to-account ‘Pay-by-Bank’ solution to their customers.
• FinTech Automation?made the news for joining the?Mastercard?Engage partner network as one of the technology partners for open banking.
• TrueLayer?joined forces with?WealthOS?to bring the benefits of instant bank payments to the account funding process.
• FinTech application?Open Banking One?selected?Nordigen?to provide their customers with a simple way to interact with all their bank accounts simultaneously.
• Equifax Canada?made the headlines for expanding its engagement with?Financial Data Exchange?to promote a consent-based approach to open banking and educating Canadians on consumer-led banking.

In other news,?Yapily?launched Yapily Virtual Accounts to bring more transparency to real-time payments, meanwhile also adding Yapily Variable Recurring Payments (VRP) to enable scheduled payments. Additionally,?The Brazilian government?and the?National Supplementary Health Agency (ANS)?grabbed headlines for their plan to launch a new platform, scheduled in 90 days, for Open Health to speed up portability between health plans and stimulate competition in the private health sector inspired by Open Banking.

The?Digital Finance?segment was astir with numerous partnerships, acquisitions, and launch-based events, as digital banks continue to innovate and bring forward unique propositions.

On the partnership front,?

• IndusInd Bank?collaborated with?M2P Fintech?to roll out path-breaking customer value propositions across payments and lending solutions.
• UK challenger bank?Monument?partnered with?Persistent?to build a cloud-native digital banking platform for its lending and deposit services.
• 4G Capital?made the headlines for choosing?Mambu's?cloud banking platform to create better banking experiences for micro and small enterprises.
• The?Co-operative Bank?selected?Finastra’s?Kondor cloud solution to upgrade its treasury infrastructure and automate manual reporting and processes.
• Purpl?joined forces with?Mambu?to evolve the remittance sector and scale operations in the MENA region.
• That’s not all –?Decentro?partnered with?Provenir?to enable NBFCs and FinTech Lenders with automated KYC and banking workflows and address the $1.1T credit gap in the SME sector.

As for the acquisitions, South African digital bank?TymeBank?acquired?Retail Capital?to grow internationally and allow SMEs to expand through funding that works on their terms. Neobank?Umba?acquired a 66.6% stake in?Daraja?to bridge the financial inclusion gap with products and services for?the underserved.

What’s more –?Synctera?introduced Ground Control, “an end-to-end banking and compliance operational support program for developers”, to ensure banking and financial compliance obligations are met while launching, scaling, and building in-house teams.?CabbagePay?launched its platform in major cities across the United States to give businesses access and discounts to several FinTechs, startups, and other service providers.

Moreover, Brazil's?Nubank?celebrated 1 million cryptocurrency customers in Brazil since the launch of its crypto offering back in June.?UNObank?raised $11M in a pre-Series A funding round to further invest in the digital bank’s growth. Identity Decisioning platform?Alloy?also announced its global expansion with a presence in 40 countries across North America, EMEA, LATAM, and APAC. Additionally, neobank?Grasshopper?secured $30.4M funding to provide clients with personalised digital banking solutions across the business and innovation economies.

The?Embedded Finance?landscape felt alive thanks to the various partnerships that rode through the waves of the week. Let’s take a look!

• UK-based FinTech?Sonovate?partnered with?Demica?to streamline its reporting processes for contingent workforce management. Sonovate intends to make use of Demica’s platform for lending more efficiently. Taking care of customers was not only on Sonovate’s plate but also on?Cover Genius’, the leading InsurTech for embedded insurance, who partnered with?Zip?to integrate tailored protection with payment processing and Zip’s wallet experience.?
• Enhancing the ecosystem even further, the collaboration of?ePayLater?with?JioMart?Partner?will let retailers gain smooth supply through the JioMart Partner and an easy-to-access line of credit through ePayLater. Journeying ahead on the partnership route,?Autonom?entered the insurance category and partnered with?DigiSure, providing Autonomy with month-to-month auto insurance coverage by digitally onboarding, evaluating, and qualifying subscribers.????
• Speaking of fresh products in the FinTech garden, Australian neobank?Up?launched a savings-based alternative to get consumers to save for one-time purchases instead of borrowing. A step in favour of the consumer is a step in the right direction for the company!?Cashew Payments?partnered with Sandy Beach Hotel & Resort in Fujairah to offer UAE residents an affordable staycation option. The deal not only offers its customers more choice at checkout but also financial flexibility.
• Fabulous funding rounds seem to be never-ending for the FinTech industry. Dubai-based BNPL company?Tabby?announced a $150M credit facility with Atalaya Capital Management and existing investor Partners for Growth (PFG), enabling the company to support sustained growth in transaction volume. And to further keep the funding fete going, embedded finance startup?Credit Fair?raised $10M in a debt and equity seed extension round to expand its platform across India, develop new technology, and enhance the customer experience at the point of sale (POS).?

The?DeFi?industry was jam-packed with activities that kept the sphere ablaze. The mist due to recent tribulations seems to be settling as novel initiatives bloom instead.

• New launches certainly spiced up the DeFi scenario last week.?Velorex?unveiled its DeFi-focused model, to be available later this year. The crypto company introduced a high-powered, uptempo video to showcase its new, cutting-edge ATM for digital assets.?HashFree?launched four core consensus mechanisms under the platform: GameFi, SocialFi, DAO & NFT. It doesn’t stop there – we’re only just beginning the row of novel debuts.?Defi Kings?launched its utility that protects crypto users while generating passive income for token holders. DeFi project?ChangeX?successfully launched its CHANGE token at HydraDEX and Uniswap, sparking strong investor interest.?Floki?introduced FlokiFi, an umbrella name for a suite of decentralised finance products that will be launched under the Floki brand.?
• Furthering down the DeFi happenings, blockchain firm?Neopin?announced its strategy to strengthen its foothold in the global DeFi Market with four keywords: Web 3.0, multichain, NFT, and launchpad. Besides this,?MEW (MyEtherWallet)?announced the launch of its cross-chain browser extension, Enkrypt, which will support transactions across the Ethereum and Polkadot ecosystems. First-time users will be able to use Polkadot, which enables blockchains to work seamlessly together at scale.?Wirex, a leading crypto and payments ecosystem, also expanded the Wirex Credit program with new features and expanded the program to new regions. The company now offers crypto-backed credit lines to UK users and has added WXT as a collateral token.
• On the partnership front,?NodeReal, an all-in-one blockchain platform, partnered with?ApeSwap, a leading DeFi protocol. Together, they will deploy NodeReal's services to ensure that transactions on ApeSwap are secure, accessible, and transparent. To take things a step further,?BankProv, a bank specialising in technology-first banking solutions, announced a new BaaS partnership with?Fortress Trust, a Web3 infrastructure company, and?Treasury Prime, a leading BaaS technology provider. BankProv will provide fiat services through this partnership, while Fortress will offer advanced NFT, crypto, and fiat infrastructure. It's a trio that's making DeFi more efficient and accessible! Not just this, but?Sygnum Bank?is also expanding its bank-grade staking offering with?Cardano. Sygnum’s institutional-grade banking platform can be used to stake Cardano to generate staking rewards.?
• In other news, renowned fashion house?Gucci?started accepting payments in the form of ApeCoin and Euro Coin via cryptocurrency processor BitPay. Embracing the crypto economy, the luxury retailer is the first merchant to start accepting ApeCoin as payment through BitPay.
• Want to know more about Web3 and its wonderous dynamism? We’ve revamped our Future of Crypto newsletter to bring you the stimulating universe of Web3 wonders, right here: Enter the Wonderland!

The?Platform Finance?segment was bustling with various activities that will only add to the flavourful zest of the week’s FinTech brew!

Revolut?expanded its presence via the launch of its crypto services in Singapore and released 22 new cryptocurrencies available to its customers in the European Union and the UK, making the total number of tokens available through Revolut more than 40.?Yubi?launched Yubi Build, a real estate and infrastructure financing platform, to reduce turnaround time by concluding processes such as signing up, discovery, and analysis process. Additionally,?Federal Bank?listed its Payment Gateway platform on the TIN 2.0 platform of the Income Tax Department.

On the acquisitions front, FinTech unicorn?CRED?acquired wealth management company?smallcase?for $400M.?Scripbox?also acquired?Wealth Managers?in its 10th M&A deal to expand its geographical footprint and customer base.

And if that wasn’t enough, then?SmartCrowd Holdings?secured a FinTech experimental license from the Saudi Capital Markets Authority (CMA). SmartCrowd plans the launch of its Real Estate Funds Distribution Platform to make alternative assets accessible to the general public within Saudi Arabia. Furthermore, digital lending platform?Auxmoney?secured $510M funding to invest in consumer loans on its own platform.

With industries promoting and embracing environmental sustainability, the?Green Finance?space continues to dominate the sector, with numerous new launches grabbing the attention last week.

The Carlyle Group?launched a decarbonization-linked financing program to enable borrowers to access capital with terms tied to their performance on climate-related goals.

• The?Government of Singapore?grabbed attention with their plan to launch its inaugural green bond offering, kicking off a $25M multi-year green bond program.
• Sprott Asset Management LP?launched Sprott ESG Gold ETF to exclusively source and refine gold from globally recognised mining leaders in ESG based on special criteria developed by Sprott.
• Visa?launched Visa Eco Benefits in the Asia Pacific to help Visa cardholders across the region better understand the environmental impact of their day-to-day payments.
• Moneyfacts Analyser?introduced a green search and filter for their users to filter for ‘green’ residential and buy-to-let (BTL) mortgages.
• Citi?was also in the news for the launch of its new Sustainable Time Deposit (TD) solution in the Asia Pacific to enable clients to invest excess cash in alignment with their sustainability goals.
• HSBC Mexico?launched the Global Sustainable Stock Fund to include instruments that consider ESG factors.

On the partnership front,?TradeSun?partnered with?Coriolis Technologies?to allow banks to measure ESG performance across trade transactions. The?Green Finance Institute (GFI)?teamed up with the?Greater Manchester Combined Authority?to trial and scale innovative financing solutions for home energy efficiency improvements.

And to wrap it all up, ESG and Impact Data Intelligence platform?Proof of Impact (POI)?raised $6M in a pre-Series A funding round to accelerate POI’s go-to-market efforts focused on private credit and private equity funds managers. The?Financial Services Council (FSC)?released new climate-related guidelines for investment managers to set targets, report on risk, and avoid greenwashing.?ING?captured headlines with its plan to trial a carbon footprint tracking app from FinTech?Cogo?with 350,000 mobile customers.

Some other happenings in the FinTech universe ??

There’s nothing like too much FinTech news, which is why we bring you some more notable events that caught our attention the past week –

• Parafin?secured $60M in a Series B funding round,
• ZayZoon?raised $25.5M in funding, $12.5M in equity, and $13M in a new credit facility,
• Munich-based?IDnow?secured $60.9M in the form of a debt facility from BlackRock,
• Jify?raised $10M in Series A round led by Accel and Nexus Venture Partners, and
• India-based FinTech firm?CredAble?raised $9M from Axis Bank.

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 the?Neobanking Failures and Setbacks?and journeying through?Revolut's Quest To Become A Financial SuperApp?

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

FinTech research is in the WhiteSight DNA, so if you'd like to get in touch with our strategic intelligence and research content services, reach out to us at[email protected].

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