Grab goes public in the largest SPAC deal ever ????; The youngest unicorn in LatAm??; Blockbuster FinTech IPO from Nubank??

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Last week (6-10 December) was a really hot and super exciting week in FinTech.?We will look at?Grab's public debut in the largest SPAC deal ever; the youngest unicorn in Latin America; Nubank's blockbuster IPO, and other interesting news and developments.

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

Grab goes public in the largest SPAC deal ever ????

The SPAC ???Grab, the Southeast Asian super app, has just completed its business combination with a special purpose acquisition company (SPAC) Altimeter Growth.

As a result, Grab began trading on the Nasdaq under the ticker symbol “GRAB.”

The company has raised over $11B of private funding before deciding to go public this year.

The Super App ???Launched in 2012, Grab sells an array of digital services such as transportation, food delivery, hotel bookings,?online banking, mobile payments, and insurance services from its app, hence, earning the “super app” title.

It operates in most of Southeast Asia, serving more than 187M users (for context, this is nearly?double?Uber's users) in over 465 cities across eight countries. Still, revenue at the company was down 9% year-over-year as net losses expanded to $988M, up from $621M.

Blank debut ???Shares of $GRAB opened the trading day of the debut at $13.06 apiece which valued the?company at nearly $40B.

But they lost more than a fifth of their value by Thursday’s closing bell, finishing more than 20% lower at $8.75 apiece.

At the point of the press, the stock is trading at $8.99 a share.

?? THE TAKEAWAY

Once again - Super Apps are hard.?One must note that?both American & European companies have been dipping into super-app territory lately. Think Uber doing “delivery everything”, Facebook integrating payments, gaming, shopping, and e-commerce. Then there’s Revolut, PayPal, Square, among others. All-in-one platforms are super convenient for users, but that comes at a cost: bigger privacy and regulatory concerns. As antitrust scrutiny heats up, becoming more super could get harder for US tech titans, not to mention their European counterparts. On the other hand, when it comes to Grab per se, it’s obvious that the company operates in a market with a large market opportunity and low penetration across their verticals (especially food delivery and rides), which effectively means huge upside and a potential path to profitability. All in all, Grab is definitely worth watching for both medium and long-term horizons.

The youngest unicorn in LatAm??

The funding ???The Mexico City-based spend management platform?Clara?announced its launch in Brazil, an occasion marked by $70M in new funding and a $1B valuation.?

The funding round was led by Coatue, an investment firm that has backed tech companies like TikTok owner ByteDance, Deel, Ramp, Melio Payments, Mercury Bank, and the cryptocurrency exchange Bitso.

The crazy part ???That valuation comes just 8 months after Clara’s launch, making it the fastest startup to reach unicorn status in Latin America.?WoW!

The USP ???The company was founded by?Diego García and Gerry Giacomán Colyer?and has started operations in Mexico 8 months ago. According to the co-founders, Clara is an end-to-end spend management solution for companies.

In addition to corporate credit cards in physical and virtual formats with no annual fee and customizable limits and restrictions, the company has a platform for controlling expenses. It is used by companies such as?Creditas,?Casai,?and?Valoreo, and it saw the volume transacted through its platform increase over a hundred times in Mexico since March.?Not too shabby!???

Covid impact ???It must be noted though that Clara’s growth occurs within the hard-hit Mexican banking sector, rife with branch closures and credit card cancellations.

The coronavirus pandemic has slammed banking in Mexico, shutting down 867 bank branches and axing 1M credit card contracts in Q1 2021. The upheaval also pushed Mexico’s 50 banks into cutting 6% of all points of contact for banking customers. The cuts to physical banking and existing card contracts reduce incumbent banks’ advantages over neobanks—giving digital challengers an opportunity to grow their Mexican customer bases.

?? THE TAKEAWAY

Building on the momentum.?Clara’s recent funding and super quick way to?unicorn?status only illustrate how much money is out there, and how eagerly VCs are looking for?the next big thing. On the other hand, this all makes sense and is part of the bigger trend we’ve started to see lately. Consumer finance space has undergone (and continues to undergo) a major revolution in recent years, especially in the payments and neobanking space, while the B2B segment has lagged behind. B2B Payments, corporate credit cards, and spend management hence represent a giant opportunity in LatAm and the rest of the world. Everyone should therefore keep an eye on?Clara, and what it’s up to.

Blockbuster FinTech IPO from Nubank??

Market debut ???Shares of Brazilian FinTech superstar?Nubank?closed up nearly 15% in its market debut Thursday on the New York Stock Exchange, going public under the ticker symbol “NU.”

Shares closed at $10.33, giving the company a market cap of close to $50 billion in one of this year’s largest IPOs.

The story, again ???Founded in 2013, Nubank started out issuing credit cards with no annual fees. It now also offers debit cards, bank accounts, loans, and life insurance.

Nubank, which doesn’t have any physical branches, describes itself as one of the largest digital-banking platforms (globally), with 48.1M customers across Brazil, Mexico, and Colombia as of September 30. More than 70% of its customers are under 40, and about 28% are Brazilians 15 years or older,?the prospectus said.

Nubank has a 10% market share in credit cards and 1% in personal lending in Brazil.?That’s solid!

?? THE TAKEAWAY

Huge things ahead.?I have said it numerous times - Nubank will be one of the biggest FinTech IPOs ever and one of the most successful ones this year. So there you have it! But the more important question is?what’s next??Well, there are definitely huge things ahead. First and foremost, the 5 largest banks in each of Brazil, Mexico, and Colombia (all of them Nubank is targeting aggressively with Brazil being their home market) still control between 70% and 85% of that market. That includes all loans, deposits, and overall banking revenue. Furthermore, there are said to be over 250 million people in Latin America that have no access to banking at all. This means that the market as such will grow significantly over the next 5-10 years. And Nubank is very well positioned to take a huge stake in it. So I’m really bullish on them ??

Extra Reads & Quick Bites for Curious Minds??

• Poor PR ?? Better.com?has just shown how not to fire people.?Something to remember: if you announce that you have raised or otherwise managed to access hundreds of millions of dollars, don’t fire a bunch of your team right afterward. Not only is it bad PR — and it definitely is — it’s also just an awful thing to do.
• Europe is strong ???Spurred by Europe’s fast-growing tech sector, startups in the region have raised a record $121B in funding this year, almost three times the $41B brought in last year, according to the State of European Tech 2021?report?from venture capital firm?Atomico. Europe now has 321 unicorn startups with 98 reaching that status in 2021. There are also 26 decacorns worth $10B or more. European tech company exits reached a combined $275B worth of enterprise value and the region’s startup pipeline is now on par with the U.S.
• Deposit growth ???Singapore-based digital bank?Tonik?has secured $100M in consumer deposits within 8 months after launch, having previously achieved $20M in deposits in 1 month after launch.

Money Moves??

• Mexico-based?Mendel?has raised $35M?to work on the corporate spend issue that has proven so lucrative in the United States.
• Payments giant?Stripe?has acquired app marketplace software platform?OpenChannel, which helps businesses build app ecosystems for third-party developers and users. Under the terms of the acquisition, OpenChannel’s team will become part of Stripe’s remote hubs and work on ecosystem integrations for Stripe.
• Tipalti?has raised $270M in series F funding at a valuation of $8.3B, bringing the total funding raised to date to just over $550M. Tipalti will use the funding to accelerate its product roadmap and customer operations, as well as expand globally to transform global financial operations for high-velocity customers.

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

???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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