Goldman Sachs Might Create a Digital Coin, Monzo Doubles Valuation to $2.5B, TransferWise to Launch in the US

This week (24-28 June) was not very intense, yet some really interesting developments took place in the FinTech space as always.

Without further ado, let us dive into what has happened in the financial technology sector this week.

Lending Tech Firm Blend Raises $130M

American digital lending technology player Blend has raised $130 million in a Series E funding round led by Temasek and General Atlantic. Existing investors 8VC, Founders Fund, Greylock Partners, and Lightspeed Venture Partners also participated in the round, which brings the company's total funding to $310 million.

Founded seven years ago, Blend helps more than 150 lenders - including Wells Fargo and US Bank - process nearly $2 billion in loans every day.

The firm is best known for digitising the mortgage process but has also moved into consumer lending, recently expanding into deposit account opening, home equity, and homeowners insurance. The new funding will be used to build out its suite of products further and to add to a 400-strong workforce.

Monzo Doubles Valuation to ￡2B After Fresh Capital Injection

UK challenger bank Monzo has doubled its valuation to ￡2 billion after raising ￡113 million to help fund its expansion to the US. The round was led by US investment firm Y Combinator, with participation from Latitude, General Catalyst, Stripe, Passion Capital, Thrive, Goodwater, Accel, and Orange Digital Ventures. 

Monzo caused a stir earlier this month when it confirmed that it will open its first accounts to US consumers in summer 2019. The app-based bank has opened a waitlist and will host face-to-face events in major US cities, a few hundred people at a time, over the coming months.

The UK challenger, which now counts two million customers in the two years since it achieved its banking licence, says it will begin the international roll out with a Mastercard debit card and mobile app, enabling savers to get instant spending notifications, conduct P2P payments, split money into pots, and enjoy fee-free spending abroad. 

It plans to partner with FDIC-insured Sutton Bank at launch before applying for its own US licence.

Indian Neobank Open Raises $30M

Open, an Indian neo-banking startup targeting SMEs, is set to launch a "programmable" bank account after raising $30 million in a Series B funding round led by Tiger Global Management. Tanglin Venture Partners Advisors and existing investors 3one4 Capital, Speedinvest and BetterCapital AngelList Syndicate all joined the round for Bangalore-based Open.

Founded in 2017, Open partners with regulated banks to offer SMEs and startups a business account designed to automate the way they run their finances by helping with things such as payments and bookkeeping.

The firm already has over 100,000 users and says it is adding 20,000 a month, making it the fastest growing SME-focused neo-banking service in the world.

Open is the fastest growing SME-focused neobank in the world.

With the new funding in place, Open is set to immediately launch a business credit card, Open+, with a 30-day interest-free credit line. In addition, the firm is rolling out Layer, a "programmable" bank account that will let developers use APIs to build their own features on top of it and integrate with other services.

Anish Achuthan, CEO of Open, said the following:

This funding will help us accelerate our target of simplifying business banking for more than 1 million businesses at a greater pace and also launching new products like the Open+ card and Layer that will enhance our value proposition for small businesses.

Financial Data Specialist MX Raises $100M

MX, a US outfit that promises to help banks, credit unions and FinTechs use their data more effectively, has raised $100 million in a Series B funding round led by Battery Ventures.

HIG Growth Partners, Point72 Ventures, Sorenson Ventures, Pelion Venture Partners, and Cross Creek Capital joined the round alongside existing investors Industry Ventures, Digital Garage, TTV Capital, and Commerce Ventures, as well MX customers National Bank of Canada and Washington Federal Bank.

Founded in 2010, MX works with 2000 financial services firms to help them collect, structure and cleanse, analyse, visualise and act on disparate customer data - both internal and external.

The firm claims that internal studies show that users are experiencing up to four times growth in digital engagement, five times increases in deposit rate growth, and a 30% increase in net promoter scores.

Ryan Caldwell, CEO, MX, said:

This investment further validates and gives fuel to MX’s vision to empower the world to be financially strong by changing the way financial institutions serve their customers - all starting with enhanced data.

TransferWise to Launch in US

TransferWise is the latest FinTech unicorn?? to try its hand at breaking the US market, taking its borderless bank account and debit card across the pond one year on from its launch in Europe.

TransferWise’s borderless debit card first launched to customers in the UK and Europe in April 2018. Since then cardholders have made more than 15 million transactions and deposited more than $10 billion. 

TransferWise's launch in the US, comes just weeks after fellow UK challenger Monzo announced it would open up shop later this year and Germany's N26 promised to make a splash in just a matter of weeks.

Taavet Hinrinkus, Co-founder and Chairman of TransferWise said:

Our goal is to offer bank details for every country in the world through one borderless account — the world’s first global account. Since launching in Europe we’ve seen extraordinary customer take-up, with over $10 billion held in deposits so far.

TransferWise is unperturbed by the logistical complexities of breaking into the US market. Hinrikus points to independent research commissioned by the firm that compared sending and spending money abroad from the TransferWise account and debit card with top US banks and PayPal. The findings revealed that the TransferWise card makes it four times cheaper to spend on their debit card and up to 12 times cheaper to send money internationally from their account.

The firm has hired Tan France, one of the presenters on Netflix’s hit TV show Queer Eye, to be the face of the borderless account for the launch.

Visa Rolls Out Payment Instalment APIs

Visa has introduced a suite of APIs to help financial institutions and retailers offer their customers the option to pay off instore and online purchases in instalments.

Instalment payments is a fast growing sector, with nearly three in four credit cardholders in the US believing that the option is helpful for budgeting and 70% saying it helps alleviate the stress of large purchases.

The space has been occupied by a host of startups, cherry picking a market overlooked by the big incumbents and nibbling at the market share of giant card schemes.

Visa's new instalment APIs will make it easy for firms to give shoppers the ability to pay using Visa cards, splitting the purchase amount into smaller, equal payments over a defined time.

The suite is part of the new Visa Next platform, a site giving issuers and merchants access to a host of APIs and development tools for building and testing digital payment products.

Goldman Sachs Could Create Digital Coin

David Solomon said Goldman Sachs “absolutely” wants to get on the blockchain bandwagon. The bank’s CEO told French newspaper Les Echos in an article published Friday that Goldman is conducting “extensive research on tokenization” and he believes the future of payments systems is bound to live on blockchain.

Solomon said it was too early to tell which digital coin or platform will ultimately be the winner. The company believes that big financial players will seek to digitally tokenize their operations to reduce costs and serve clients better, according to a person with knowledge of Goldman’s position.

J.P. Morgan said in February it has created the JPM Coin, a digital token that will be used to instantly settle transactions between clients of its wholesale payments business. Facebook last week also unveiled a plan to create a new digital currency called Libra.

Solomon said regulators across the world are considering how blockchain will work and are very attentive to the flux of payments. “There will be an evolution in regulation, that’s certain,” he added.

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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 company's expansion into Europe , I'm an active member of FinTech community and a TechFin evangelist.

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