PayPal to Buy Online Rewards Platform Honey for $4B, Elavon to Acquire Sage Pay for ￡232M, African FinTech OPay Raises $120M, Bill.com Files for IPO

This week (18-22 November) was super, super interesting and really exciting in the world of FinTech. PayPal has agreed its largest ever acquisition - a $4 billion deal to buy Honey Science Corporation, US Bank-owned Elavon is to acquire payments gateway Sage Pay for ￡232 million, expanding its business in the UK and Ireland, OPay, the startup behind one of Nigeria's leading mobile payments services, has raised $120 million in a Series B funding round, Robinhood plans to offer its stock-trading service outside the US for the first time, launching in the UK in the first quarter of 2020, and much much more.

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

Elavon to Acquire Sage Pay for ￡232M

US Bank-owned Elavon is to acquire payments gateway Sage Pay for ￡232 million, expanding its business in the UK and Ireland.

Sage announced plans to sell its payments division three months ago. The unit, which has around 50,000 small and medium-sized business customers, reported revenues of ￡41 million and an operating profit of ￡15 million in 2018.

Elavon is currently the fourth-largest merchant acquirer in Europe. The acquisition extends the firm's market share in the UK and Ireland and follows on from its January 2019 accreditation as the first dedicated payments provider and e-commerce business to directly connect to the Faster Payments. 

“We are a customer-focused company that is helping businesses succeed in a global marketplace that is changing rapidly,” says Hannah Fitzsimons, President and General Manager of Elavon Merchant Services, Europe. “This acquisition brings tremendous talent and leading technology to Elavon, which can be leveraged across the European market.”

SIX Makes Cash Offer of €2.84B for Spain's BME

Swiss Stock Exchange operator SIX is to make €2.84 billion all-cash tender offer for Spain's Bolsas y Mercados Espa?oles, setting up a likely bidding war with pan-European exchange Euronext.

BME has strategic significance for SIX, giving the exchange a foothold inside the European market after Brussels blocked EU-based investors from trading on Swiss exchanges from July this year as a row escalated over a stalled bilateral treaty.

Romeo Lacher, chairman of the SIX Board, said:

A combination with BME will bring direct and immediate benefits to the stakeholders of both our institutions, at a time when consolidation in global financial markets infrastructure is accelerating.

Euronext, which has yet to make a competing offer but is currently mulling its options, would see a takeover of BME as a way to scale its business to better compete with larger rival exchanges in London and Germany.

A merger between BMe and SIX would push Euronext down the rankings, creating the third-largest financial market infrastructure group in Europe.

In a brief statement, Euronext commented:

Euronext confirms that it is now in talks with the Board of Directors of BME, which may or may not lead to an offer being made.

Bill.com Files for IPO

Business payments platform Bill.com has filed for an IPO on the New York Stock Exchange in a bid to raise $100 million in capital.

Bill.com hit the $1 billion valuation mark in April thanks to an $88 million funding round led by Franklin Templeton with participation from Mastercard and Fidelity Investments Canada. 

Bill.com targets the small and midsize business segment that is still heavily reliant on cheques and, the firm argues, is ripe for disruption.

It has built up a network of more than three million members paying and getting paid with its technology and manages more than $60 billion in annual payment volume.

In its SEC filing, the company said that it had over 81,000 customers using its platform.

Underwriters for its planned offering include Goldman Sachs, BofA Securities, Jeffries and William Blair, among others. Pricing terms have not yet been disc

losed. It will trade on the New York Stock Exchange under the ticker symbol “BILL.”

African FinTech OPay Raises $120M

OPay, the startup behind one of Nigeria's leading mobile payments services, has raised $120 million in a Series B funding round joined by a host of Chinese investors. 

The round - which comes on the heels of a $50 million round in June - was joined by

Meituan-Dianping, DragonBall Capital, GaoRong Capital, Source Code Capital, SoftBank Ventures Asia, Bertelsmann Asia Investments, Redpoint China, IDG Capital, Sequoia Capital China and GSR Ventures.

Incubated by Norwegian-based consumer internet outfit Opera, OPay launched its agent-centric mobile payments service in August 2018, entering a market with a large unbanked population.

The firm now has a network of over 140,000 agents and transaction volumes of more than $10 million a day and has begun branching out into motorbike ridesharing and food delivery.

The new funding will be used to continue the diversification and to move into new African markets, with Ghana, South Africa and Kenya all on the agenda.

Yahui Zhou, CEO, OPay, said:

We see ourselves as a key contributor to expanding financial inclusion in Africa, and helping local businesses and workforces to thrive from opportunities created by new, digital business models.

Earlier this month it emerged that Visa is making a $200 million stake in another Nigerian payments player, Interswitch.

BlueVine Raises $102.5M

Citi Ventures, MUFG Ventures and Nationwide have joined in a $102.5 million equity financing round for small business banking vendor BlueVine.

The Series F round of funding was led by ION Crossover Partners. Other participants included previous investors Lightspeed Venture Partners, Menlo Ventures, 83North, SVB Capital, Microsoft’s venture fund, M12, and new investors O.G. Tech - Eyal Ofer’s VC, Vintage Investment Partners, ION Group, and Maor Investments.

The new funding comes hot on the heels of BlueVine's launch of business checking accounts and debit cards alongside its existing suite of working capital products. The firm's Line of Credit, Invoice Factoring and Term Loan products have provided over 20,000 small business owners with access to more than $2.5 billion in financing since the company’s inception in 2013.

“The recent launch of BlueVine Checking demonstrates our commitment to revolutionize banking for small business owners with a full suite of services designed specifically to meet their unique needs,” says Eyal Lifshitz, CEO and co-founder of BlueVine. “This funding further validates our mission and will help democratise true business-grade banking for small businesses who have been underserved for so long.”

Robinhood to Launch Investment Product for Early 2020 launch in UK

Robinhood plans to offer its stock-trading service outside the U.S. for the first time, launching in the U.K. in the first quarter of 2020.

The startup, valued at $7.6 billion in its most recent fundraising, received authorization from the Financial Conduct Authority to operate in the U.K. in August, has gained a following among U.S. millennials by allowing them to trade stocks for free on its mobile app. U.K. customers won’t be charged a commission for investing in U.S. and global stocks, nor will there be foreign-exchange fees or minimum account balance, according to a statement by the Menlo Park, California-based company.

U.K. customers already have plenty of choice of FinTech offering them savings and payments, yet there are fewer options for investing, Wander Rutgers, president of Robinhood U.K., said in an interview. For example, the finance startup Revolut is expanding into stock trading.

“U.K. fintechs have trained the U.K. population to try new financial products but most people don’t engage with investing and when they do they pay too much,” said Rutgers.

Robinhood was founded in 2013 by Baiju Bhatt and Vlad Tenev and counts DST Global and Sequoia Capital among its investors. The company says it makes most of its money from subscriptions to its Robinhood Gold service, as well as from rebates from market makers and stock loan income.

“At first we started with commission-free trading for the iPhone and now we are thinking how can we serve all financial needs for people at the lowest costs?” Tenev said in an interview.

The announcement of the U.K. expansion follows a public-relations setback in the U.S., when a glitch in its system allowed users to trade stocks with excess borrowed funds, giving them access to what amounts to free money. That came less than a year after a planned Robinhood checking account product was torpedoed by regulatory and insurance questions.

IZettle Ships mPOS Device Made from Ocean Plastic

Swedish mPOS vendor iZettle has launched a recycled card reader made from fishing ropes and nets collected from the North and Baltic seas.

The creation of the device follows research stating that 46% of the five trillion pieces of plastic polluting the ocean is made up of old fishing nets. iZettle says that up to 75% of the Ocean Reader is made using recycled ocean litter. 

Today, there are almost 125 million card readers in the world, and this number is expected to grow by six percent on average every year. iZettle's ambition is that all new products it launches will include recycled materials by 2021.

Jacob de Geer, the Co-founder of iZettle, commented:

When it comes to things like sustainability, we have a responsibility to do all we can. I’m proud that iZettle is launching the world's first card reader made of recycled ocean plastics, but at the same time, it's a failure of the entire industry that this is only happening now, in 2019. We all have to do better.

The Ocean Reader comes with a charging dock, which is also made from ocean plastic, and will retail at ￡98+VAT. IZettle says it will donate 20% of the sale price of each Reader to organisations committed to removing plastic from the oceans.

Earlier this year, CPI Card Group introduced a payments card, called Second Wave, with a core made from recovered ocean-bound plastic.

Capitolis Raises $40M

Capitolis, a 'next generation' provider of capital markets technology founded by Gil Mandelzis, ex-Traiana, and Icap, Tom Glocer, ex-CEO of Thomson Reuters, and Igor Teleshevksy, formerly Traiana, has raised $40 million in financing from Spark Capital and SVB Capital. 

The firm is designing multiple new products and services to address capital markets constraints on under-utilised capital, initially in equities and foreign exchange, and has been hoovering up top talent from across the industry since its launch in two years ago. 

Since the introduction of its proprietary platform, Capitolis now has over 50 financial institutions live on its system, that have recorded transaction volumes of $1.5 trillion notional.

The latest funding round brings the total capital raised to date to $70 million, and will be dedicated to an upgrade of its technology platform, functionality and product offering.

Gil Mandelzis, CEO of Capitolis commented:

Capitolis’ technology has already eliminated trillions of dollars of transactions notional to date, and with the new investments from Spark and SVB Capital, development is underway to expand the functionality and platform further.

The company currently has 55 employees in New York City, London and Tel Aviv.

Tom Glocer, executive chairman, is bullish about the company's future prospects:

We now have the funding, the management team, and the core customer adoption to grow Capitolis into a major industry infrastructure and force.

PayPal to Buy Online Rewards Platform Honey for $4B

PayPal has agreed its largest ever acquisition - a $4 billion deal to buy Honey Science Corporation, the firm behind a browser extension and app that helps people find online shopping rewards and deals.

Founded in 2012, Honey is best known as a popular discovery tool that helps consumers find savings as they shop online. Over the years it has added other features, such as a mobile shopping assistant, an offers and rewards programme, and price-tracking tools and alerts.

The firm has 17 million active users and claims to have helped these people find more than $1 billion in savings over the last year.

PayPal says the acquisition will help it reach shoppers at the beginning of their journey, a vital advantage in the battle for e-commerce customers against a host of new rivals such as Apple Pay, Google Pay and Facebook Pay. 

For its part, Honey will get access to PayPal and Venmo's 275 million consumer accounts, as well as 24 million merchant accounts.

Honey, which was profitable on a net income basis in 2018, will keep its brand and LA headquarters once the deal closes early next year.

Dan Schulman, CEO, PayPal, said:

Honey is amongst the most transformative acquisitions in PayPal’s history. It provides a broad portfolio of services to simplify the consumer shopping experience, while at the same time making it more affordable and rewarding.

The combination of Honey’s complementary consumer products with our platform will significantly enhance our ability to drive engagement and play a more meaningful role in the daily lives of our consumers.

Brazilian Neobank Neon Raises $93.5M in Bid to Triple Account Base

Fast-growing Brazilian neobank Neon has raised $93.5 million in a Series B round led by General Atlantic and Banco Votorantim as it seeks to grow its two million customer base beyond the Rio-Sao Paulo corridor.

This is Neon's second round of funding. The first investment, valued at $22 million, was made in May 2018 by venture capital funds Monashees, Omidyar Network, BBVA's Propel, Quona and Mabi, who have each returned for the current round.

Much of the new capital will be preserved for hiring new tech staff as the business bids to triple its customer base from two million to six million by the end of 2020. The company will end the year with about 600 staff, three times the number in place at the start of 2019.

New acquisitions are also in Neon's sights, having already acquired MEI Fácil, to strengthen its services aimed at micro-entrepreneurs.

Founder Pedro Conrade said:

This new fundraising rounds off our business model and gives us the strength to keep growing at an even more intense pace and to invest even more in technology.

Neon is not the only challenger competing for space in the crowded Brazilian market. Other digital equivalents include Nubank, Inter-Bank, C6 Bank, BS2 and Bradesco spin-off Next. Europe's N26 has also announced plans to open up to Brazilian consumers by early next year.

Finnish FinTech Enfuce to Track CO2e Emissions of Purchases

Working in tandem with Amazon Web Services and Mastercard, Finnish FinTech Enfuce has launched My Carbon Action, a digital tool that allows businesses to track and calculate the carbon dioxide equivalent (CO2e) emissions of every purchase and provide insights into their climate change impact.

Set to launch in spring 2020, the Nordic fintech startup’s new service is based on a validated calculation method called Life Cycle Assessment (LCA), which Enfuce have developed with Finnish consultancy D-mat.

Enfuce's digital product was also created in Mastercard's Lighthouse Development Programme in 2018 and leverages Amazon Web Services's cloud computing to bring the product to market.

My Carbon Action considers the environmental impact of a product, analysing the journey from raw material extraction, manufacturing and transport to use and disposal. After analysis banks, retailers and merchants will receive purchase-based feedback and personalised lifestyle tips to a device of their choosing.

The system also allows customers to use their Alexa voice technologies to ask about their carbon footprint. 

Head of AWS Nordics Guido Bartels references Amazon’s Climate Pledge to be 100% powered by renewable energy by 2030 and zero carbon by 2040 and says: “The new My Carbon Action application is a great example of how cloud technology can be used to deliver consumers a service that can make a difference to our planet.”

Mats Taraldsson, head of digital business development and FinTech engagement at Mastercard, adds:

Through the programme we have worked closely with Enfuce on the architecture of its CO2 footprint tracking tool, which is based on consumers and corporates transactions. 

Understanding the sustainability of what we buy is becoming increasingly important to consumers, and at Mastercard we are looking support innovation which makes it easier for people to understand their own personal environmental footprint.

Enfuce Co-founder Monika Liikamaa concludes:

Our goal is to help consumers become more carbon conscious, which is why we wanted to create a product that gives individuals accurate feedback based on their actual purchase history and lifestyle. 

Only by bringing individualised and systematic insights can we help consumers make sustainable choices a habit.

My Carbon Action allows us to unite consumers with banks, financial service partners, merchants, retailers and other businesses in the fight against climate change. 

With the help of industry giants like AWS and Mastercard, we can make a significant impact by bringing our solution to the world.

Dubbed Finland’s biggest FinTech startup, Enfuce also secured €10M in funding today, led by early-stage VC firm Maki.vc with venture debt from Nordea, L?hiTapiola, and Finnvera.

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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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