Klarna isn’t going public yet, but you can already get a piece of it ??; BNPL picking up steam in Africa????; FinTech M&A is heating up ??

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Last week (13-17 December) was a really hot and super exciting week in FinTech.?We will look at?how you can already buy a piece of Klarna; BNPL picking up speed in Africa; FinTech M&A heating up, 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.

Klarna isn’t going public yet, but you can already get a piece of it ??

The news ???An anonymous investor is reducing its stake in BNPL giant?Klarna?and offering the shares to small investors, according to The Times.

The offer is happening in the UK at a 5% discount to the $46 billion valuation that the Swedish “buy now, pay later” credit company achieved 6 months ago.

The offer ???Crowdcube, the online investment platform, has been taking expressions of interest from its 1.2M members for shares in Klarna, which is the most valuable privately-owned financial technology company in Europe.

The investment platform has been messaging its members telling them that it has “secured an exclusive, limited allocation” of Klarna stock from an unidentified private seller.

Overwhelmed ??♂??Although Crowdcube didn’t specify how many shares it was selling and for whom, they did emphasize that the interest in Klarna shares has been overwhelming. Well, that’s understandable - who wouldn’t want a piece of the most valuable FinTech in Europe? ??

?? THE TAKEAWAY

BNPL is fading away? ???Although there’s very little information for one to make a robust conclusion here as to why somebody would sell Klarna at the discount, there is one indication we should be aware of. The unknown investor may actually be dumping, as buy now, pay later?stocks have started to plummet.?Affirm, Afterpay, and Zip Co, some of the most notable players in the BNPL space, all have seen their stocks declining 23-28% in the past month alone. That’s definitely not something to be proud of… Yet, the decline in the stock price was part of a broader drop across the FinTech industry, as inflation took hold and fear of the omicron variant sent stock prices down. Also, looking at the fundamentals, all aforesaid BNPL stocks show somewhat strong performances, with a focus on expansion and partnerships, which effectively should make them worth holding for the long term. Therefore, I would argue that this is a somewhat strange personal decision, or simply a need to cash out now, rather than a worrying signal for a contracting BNPL sector.

BNPL picking up steam in Africa????

The funding ???Sympl, an Egyptian FinTech founded only 5 months ago, has picked up $6M in seed funding following a soft launch in October.

Beco Capital led the five-month-old startup’s seed round, while A15 and Global Ventures participated.

The USP ???Founded by Yasmine Henna, Mohamed El-Feky, and Karim Tawfik, Sympl launched its checkout platform in October via an exclusive partnership with leading Apple reseller?Tradeline?on the release of the new iPhone 13.?Since then it has established partnerships with many other key retailers across various sectors, empowering merchants?to sell products and services directly to?bank cardholders?on short-term, interest-free repayment plans.?

While typical BNPL models split a purchase into multiple equal payments with an initial payment made at checkout, Sympl customers pay an upfront fixed fee of 100 Egyptian pounds which covers future repayments. The fee is the same regardless of the purchase amount and is given after Sympl is able to acknowledge and check the funds in the customer's bank account. The rest of the payments can be done over three to five installments.

With no pre-registration required and payment plans approved at checkout, Sympl allows merchants to sell directly to consumers on short-term, fully interest-free (zero-interest) payment plans.

Some numbers ???Sympl is already accepted at more than 240 retail and online?stores?in Egypt, and the startup plans to reach?1,000?stores?by?the middle?of next year.?

?? THE TAKEAWAY

Catching up the waves ???Though BNPL is one of the hottest verticals in FinTech right now and it has taken off in most parts of the world, it’s yet to pick up steam in Africa. Sympl has hence found that in Africa - and Egypt specifically -, there is a newfound surge in demand for such services. Given that the upstart is targeting over 50 million debit and credit cardholders in Egypt alone, that’s a huge total addressable market. Combine that with overall growth in BNPL as a % of e-commerce sales (that should double in the next 2 years) and Sympl’s interesting product twist, that’s something definitely worth watching. Also, expect more BNPL plays to emerge out of Africa in the next 12-24 months.

FinTech M&A is heating up ??

Two deals ???FinTech has been experiencing a major influx of funding over the last 1-2 years. Some of it ended up in exits, via IPOs or SPACs, while mergers and acquisitions have been somewhat dragging behind.

This will inevitably change, and today we have two deals to take notice of.

Consolidating everything ???This first one came from?EBANX, a payments platform, that has acquired?Remessa Online, a FinTech that specializes in international remittance services, in a deal valued at $229M.

With the addition of Remessa Online's expertise and technology, EBANX amplifies its payments solutions that connect global enterprise brands of the digital economy and Latin Americans, while creating a powerhouse for cross-border services in the region.

It must be noted that less than 2 months ago, EBANX announced the acquisition of Brazil-based?Juno, a B2B FinTech company that provides billing, payments solutions, and banking services. Also, EBANX recently acquired 30% of the ordinary shares of Brazilian Banco Topazio, a company that provides foreign-exchange operations among other services, to optimize international payment services to its merchants.

Strengthening mobile banking play ???The second deal came from mobile banking platform?MoneyLion?which is to buy embedded finance marketplace?Even Financial?for a total consideration of $440M.

Founded in 2014, Even digitally connects and matches consumers with real-time personalized financial product recommendations from banks, insurance, and fintech companies on mobile apps, websites, and other consumer touchpoints through its marketplace technology.

Even's marketplace network includes over 400 financial institutions and 500 channel partners, covering a breadth of financial services including loans, credit cards, mortgages, savings, and insurance products.

?? THE TAKEAWAY

More consolidation coming.?Despite massive funding and support from top VCs, FinTech space is slowly getting crowded, hence, more consolidation is inevitable here. Players with more funding and a better position in the market will obviously seek to acquire their competition to further strengthen their leadership. EBANX & MoneyLion just illustrate that. More FinTech M&A to come in 2022.

Extra Reads & Quick Bites for Curious Minds??

• Acquisitions, Crypto & SPAC ???Personal finance startup?Dave?will use $450M it’s expected to raise in its upcoming initial public offering (IPO) to make acquisitions, launch new products and possibly invest in cryptocurrency, The Wall Street Journal (WSJ) reported. Dave has an app for consumers who often overdraw their bank accounts or run out of cash. The company will merge with special purpose acquisition company (SPAC) VPC Impact Acquisition Holdings III Inc. in the next few weeks, and then its shares will trade on Nasdaq in early January.
• Wise goes China?????The digital money transfer platform?Wise?says it can now offer B2B transfers in China in the Chinese yuan (CNY) from eight currencies.?The company announced this move saying it had plans to expand to other currencies supported by the platform. Wise’s business customers had already had the ability to pay local businesses in China using the U.S. dollar.?In September, Wise joined Australia’s?New Payments Platform?in a move designed to settle transfers in that country faster at a lower cost.?
• Card with green rewards? ???Blue Apron?will be debuting a co-branded card with?Aspiration, offering rewards for users helping to fight climate change. Called the Blue Apron Aspiration Zero Card, it will reward card members on qualifying purchases made at BlueApron.com and on the mobile app.?There will also be more benefits available for Aspiration Zero Card members right now.?

Money Moves??

• Bumper, a British buy now, pay later (BNPL) startup that helps people pay for car repairs, has raised $12M with the help of a pair of automakers. According to published reports, Bumper’s Series A was led by Autotech Ventures, with the backing of Porsche Ventures and Jaguar Land Rover’s InMotion Ventures fund.
• Stark Bank, a B2B Open Banking FinTech has raised $13M in a round that will finance the expansion of financial products offered by the company and increase the team.
• US-based payment app?Papaya?has raised $50M. The company has developed technology to give people a way to pay bills outside of traditional methods, such as through the mail, over the phone, or via a Web portal.

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:

???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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