Month in FinTech | Feb 2019

Quick Intro

Every month starting February, I will be publishing a Month in FinTech, monthly series where I will be covering the hottest stories that happened in the financial (technology) space over the month, what I have read and what you should not miss too.

If you are as passionate and curious about FinTech as I am and always want to stay updated, hit the follow button and let's learn & grow together.

This was another interesting month in FinTech, and these were the hottest stories.

Raisin Raises $114M for its pan-European Marketplace for Savings and Investment Products

Raisin, FinTech marketplace for savings and investment products, in the beginning of February has raised $114 million in Series D funding. Existing investors Index Ventures, PayPal, Ribbit Capital and Thrive Capital all participated in the round, which brings the total raised to date to $200 million.

The fast-growing Berlin FinTech says it plans to use the new capital for strategic acquisitions and further internationalisation. Although available to customers across the EU from the get-go, Raisin had dedicated market launches in the Netherlands and the UK last year, seeing the company expand beyond Germany. It plans to add at least two additional international markets this year.

Founded in 2013, Raisin set out to open up the savings deposit market in Europe by taking advantage of EU-wide banking regulation, which goes some way to creating a financial services single market. Specifically, the problem the startup solves is that saving deposit rates differ not only from one local bank offer to another but more noticeably across Europe as a whole.

To that end, Raisin says that it has brokered more than $11 billion in deposits for its 62 partner banks. It claims more than 160,000 customers from 31 different European countries, and says that to date Raisin has helped savers earn $90 million in interest.

Tink Raises €56m in Funding

Early in February, Swedish PFM platform Tink has completed a €56 million investment round and rolled its business out to five new European markets as it prepares to take advantage of Open Banking rules.

Insight Venture Partners led the funding round with participation from existing investors Sunstone, SEB, Nordea Ventures and ABN Amro's Digital Impact Fund. They were joined by new investors Christian Clausen, former chairman of the European Banking Federation, and Nikolay Storonsky, founder of Revolut.

Tink's account aggregation API developer portal, which was launched in April last year and provides access to financial data from more than 300 banks in a single API, will now boost its European coverage beyond the Nordics to encompass the UK, Austria, Germany, Belgium and Spain.

OakNorth Raises $440m for US Expansion

UK challenger bank OakNorth has closed a $440 million funding round with the SoftBank Vision Fund and the Clermont Group as it sets sights on building out its international franchise.

One of a host of new entrants to the UK banking market, OakNorth positions itself as a bank for entrepreneurs, providing loans to small firms, and accepting deposits online.

The bank has made a virtue of its cloud-based technology? platform, using machine learning techniques and artificial intelligence tools to build a ￡3.7 billion loan book within four years of launch. OakNorth claims not to have suffered a single default or late payment since its launch in September 2015.

The firm is subsequently increasing its efforts to become a technology supplier to the banking industry, opening new offices in New York and Singapore to service clients across multiple continents. The technology is currently being used by institutions in Asia, North America and Europe - including NIBC Bank in the Netherlands which participated in the $100 million fundraising the group closed in September 2018.

This latest round takes OakNorth Holdings’ total primary and secondary funding to over $1 billion, more than any other fintech in Europe. This financing will be used to launch its lending operations in the US, providing North American lenders with the capability to tap the company's technology stack to grow their portfolios while improving credit quality.

Goldman Sachs Leads $45m Funding Round for Business Credit Startup Nav

In the middle of February, Nav, a business financial management app that helps small firms get better financing by giving them free access to credit reports, has raised $44.8 million in a Series C funding round led by Goldman Sachs and joined by Experian Ventures.

Point72 Ventures, Aries, and CreditEase Fintech Investment Fund also joined the round, the proceeds of which Nav plans to use to develop its technology platform, expand enterprise partnerships and sign up more small business owners.

More than one million small business owners already have access to their credit data and insights through Nav, making it easier for them to access financing. The company's platform also includes a marketplace where users can apply for loans and credit cards. 

The startup provides free small business credit data from Equifax, Experian and Dun & Bradstreet. Last year it inked a multi-year partnership with First Data's Clover, giving users of the POS system access to their free scores.

Starling Bank Scores ￡75 million Investment

In the same week, Starling Bank has raised ￡75 million to fund its international expansion plans. The ￡60 million Series C funding round was led by Guernsey-based Merian Global Investors, and a further ￡15 million was added by its sole existing investor, Harald McPike of Bahamas-based QuantRes. 

The new round lands a week after Starling took the wraps off a new Euro Account as it begins preparations for life after Brexit. The timing of that announcement coincided with a flying trip by Starling founder Anne Boden to Ireland, which will provide the launch base for a passported European assault. 

Since launching its app in May 2017, Starling has built up a customer base of 460,000 personal current accounts and 30,000 SME accounts. The bank expects to hit one million customers by the end of 2019. 

China’s Ant Financial Agrees to Buy WorldFirst in $700m Deal

This is probably the biggest piece of news during the month: Ant Financial has agreed to buy British payments group WorldFirst in a deal said to be worth around $700m. It is the biggest push yet by Jack Ma’s Chinese financial services giant into western markets.

The acquisition — which is Ant Financial’s first major deal in the UK — comes after a spoiled attempt last year to take over MoneyGram International, a US-based cross border payments group, which was blocked on security concerns. 

Last month, WorldFirst has closed its US arm to avoid similar problems with this deal. Ant Financial said the move would allow the two companies to reach a greater number of customers, especially in the fast-growing area of cross border e-commerce.

Alphabet and Salesforce Back $75 million Funding for UK Online Payments Start-up GoCardless

Last week was pretty interesting as British online payments start-up GoCardless has secured a $75 million investment backed by U.S. tech giants Alphabet and Salesforce.

The funding round was co-led by Alphabet's venture arm GV and private equity firm Adams Street Partners. Existing investors Accel, Balderton Capital, Notion Capital and Passion Capital also contributed.

London-based GoCardless processes direct debit payments on behalf of businesses. The firm's clients include newspapers like The Guardian and the Financial Times, as well as tech firms like Box and Sage. It says it now processes payments for more than 40,000 merchants, handling more than $10 billion worth of transactions every year.

GoCardless was set up in 2011 by Hiroki Takeuchi and fellow entrepreneurs Tom Blomfield and Matt Robinson. Blomfield departed to create mobile bank Monzo, while Robinson left to start up digital estate agent Nested.

The fresh capital will be used to help the company expand its payments product to the United States, Takeuchi said, with a view to cover about 70 percent of recurring payment volume globally by the spring. It currently only has offices in Europe and Australia.

SME Lender Iwoca Raises ￡150 million

During the same week, UK small business lender iwoca has raised ￡150 million in equity and debt capital, including figures from a recent Series D equity round led by Augmentum Fintech.

The company, which reached profitability in 2018, says the capital raise will enable it to continue recruiting new customers across its main markets in the UK, Germany and Poland. Thus far, the FinTech firm has funded more than 25,000 small businesses across Europe. 

Mambu Raises $34M for Expansion of Banking Platform

Finally, Mambu, a Berlin-based FinTech, raised $34 million in a funding round led by U.S. investment firm Bessemer Venture Partners. Action Capital, CommerzVentures, Point Nine Capital and Runa Capital participated in the round.

Mambu provides cloud-based software to legacy banks, startup FinTechs and others to help them expand lending and full-service banking to mobile customers. The startup will use the funding to invest in its technology platform and will also grow its sales and support staff.

Alternative Investments Platform YieldStreet Raises $62m

Digital wealth management platform YieldStreet has closed a $62 million Series B funding round led by Edison Partners and joined by Greenspring Associates and existing investor Raine Ventures.

YieldStreet gives individuals access to the kind of alternative investments - such as real estate, marine and shipping, legal finance, and commercial loans - normally reserved for institutions.

Over the past three years, the firm has built up a community of over 100,000 that has invested more than $600 million and seen over $50 million of interest generated, with an expected 12% internal rate of return.

The latest funding will be used to bring in more products, attract new users, make hires and go after strategic acquisitions.

London Stock Exchange Leads $20 million Round in Capital Markets Blockchain Startup

The London Stock Exchange has led a $20 million seed round in blockchain startup Nivaura. Other investors in the round include Santander InnoVentures, law firms Linklaters and Orrick, Aegon's Transamerica Ventures, MiddleGame Ventures, Digital Currency Group, and Spencer Lake, formerly head of global markets at HSBC.

The three-year old firm is targeting the fragmented and manual processes involved in the issuance and administration of debt, equity and structured products. It has already proven the platform in the administration of an automated cryptocurrency denominated bond issuance supported by Allen & Overy.

Nivaura says the financing will be used to grow its tech team and move into new asset classes and jurisdictions.

Nivaura and the LSE have past ties, having worked together on the issuance of tokenised securities under the Financial Conduct Authority's regulatory sandbox.

So this was February. What March will bring?

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

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?? 7 Facts about Bitcoin You Should Know

?? Forget Bitcoin - Cannabis is the New Crypto

?? Crypto is NOT a Bubble. Never was, and hardly ever will be

?? Bitcoin is NOT a Currency, and Never Will Be

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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 one of the leading alternative banking and payments providers in EEA, I'm an active member of FinTech community and a TechFin evangelist.

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