Ramp is ramping up M&A: acquires AI startup to expand further into procurement ??; The future of InsurTech? Allianz acquires struggling Luko??
Linas Beliūnas
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Last week (29 December - 2 February) was another intense and thrilling week in the world of Blockchain & Cryptocurrency. We will look at Ramp which is ramping up M&A as it acquired an AI Startup (what does this mean, how Ramp is dominating + some deeper dives); Allianz which just acquired struggling French InsurTech Luko (is this the future?); rising credit card delinquencies (looking at the latest data & its implications), and other interesting news and developments. and other interesting news and developments.
Without further ado, let us dive into what happened in the Blockchain & Crypto sector last week. Let’s connect the dots.
Ramp is ramping up M&A: acquires AI startup to expand further into procurement ??
The deal ?? Finance automation startup Ramp is aggressively expanding its product suite through mergers & acquisitions (M&A).
After two previous purchases aimed at improving customer support and negotiated savings, Ramp has just acquired Venue, an AI-powered procurement platform founded in 2022.
Let’s take a look and see why it matters.
More on this ?? While financial details were not disclosed, the deal gives Ramp procurement capabilities to add to its existing offerings of corporate cards, expense management, accounts payable automation, and business travel.
Venue specifically helps companies manage vendor relationships and costs - an area ripe for AI implementation to eliminate inefficiencies.
The crazy part? The company sold itself less than 2 years after launching and before even needing to raise a Series A round ?? The remarkably fast exit reinforces Venue's ability to solve real pain points and build products people actively want to use. Bravo.
The traction ?? The acquisition comes on the heels of Ramp launching improved procurement features such as bi-directional contract integration, dynamic intake forms, enhanced purchase orders, collaboration tools, and spend analytics.
With Venue's founding team leading Ramp's new procurement unit, the company aims to further automate workflows like custom approval workflows and PO management.
And even without it Ramp already processes over $10 billion in annualized accounts payable spend, which marks a 10x increase in two years ?? Ramp states its goal is to become a "one-stop-shop" for financial operations software.
With Venue under its umbrella, the FinTech giant is definitely one step closer to that.
?? THE TAKEAWAY
Looking ahead ?? On a macro level, the procurement enhancements and Venue acquisition indicate Ramp's desire to compete with incumbents in the space such as Coupa and Concur. Additionally, the company's continued investment in AI and automation points to a future where technology eliminates tedious back-office tasks. If successful, Ramp would significantly disrupt legacy providers and potentially emerge as the financial OS for modern businesses. Finally, although this is 100% a payments play, it well coincided with what I wrote about last week about FinTech M&As - incumbents and well-capitalized startups are eager to snap up niche, unique technologies, and talent. On a micro level, this yet again widens the gap between Ramp and Brex:
ICYMI: Once a FinTech darling, Brex lays off 20% as growth slows & burn rate remains high ?? [uncovering all the details to see what this tells us about the future of Brex & the broader FinTech ecosystem]
The payments industry faces a pivotal year amid tighter funding and more M&A ?? [tighter funding & more M&A on the horizon, where the focus should be + some bonus reads]
The future of InsurTech? Allianz acquires struggling Luko??
The news ??? French InsurTech startup Luko has sold its home insurance business to Allianz Direct, a digital subsidiary of the German insurance giant, for €4.3 million.
This comes after Luko entered judicial reorganization proceedings in June 2022 due to mounting debt from its rapid expansion efforts.
Let’s take a quick look.
More on this ?? Luko has raised €72 million since its founding in 2018 with ambitions to become a leading European insurtech. However, the company took on debt as it expanded to Germany by acquiring Berlin-based insurtech Coya and dove into new lines of business like unpaid rent insurance in France.
As funding dried up, Luko was forced to sell assets and find a buyer for its core home insurance operations.
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After a months-long process involving multiple bidders, the bankruptcy judge approved Allianz Direct's offer as the best option to maintain jobs and continue serving Luko's 230,000 policyholders.
As part of the deal, Allianz will invest €25 million to restructure Luko's business and work towards profitability by 2027.
?? THE TAKEAWAY
Looking ahead ?? While the acquisition likely disappoints those hoping Luko would thrive independently, it saves the company from dissolution. Meanwhile, Allianz gains a digital foothold in the French market, while preserving Luko’s brand and team. Win-win? Win-win! However, competing with Allianz’s existing agents on pricing could prove challenging, and this remains one of the biggest open questions as part of this M&A. Looking at the big picture, the saga serves as a cautionary tale for InsurTechs looking to rapidly expand product lines and geographies without proven economics. Remember - you will either die trying or get eaten alive.
Rising credit card delinquencies ??
New data ?? More than ever, credit card delinquencies are highlighting economic inequalities in America, according to a new report.
Let’s take a quick look.
More on this ?? A recent report from the Federal Reserve Bank of New York found that while 75% of high-income consumers had access to credit cards in Q3 2022, only 59% of low-income consumers did.
This limited access restricts low-income families' ability to withstand personal financial disruptions.
The report also showed that delinquencies have risen across the board since 2020, exceeding pre-pandemic levels by Q3 2022.
However, delinquency rates were higher in low-income areas. Over half of low-income and moderate-income households were rent-burdened in 2021, spending over 30% of their income on housing costs.
With less discretionary income, these groups are more vulnerable to debt spirals when emergencies arise.
Additionally, lower-income homeowners were less likely to refinance mortgages between 2020-2021, missing out on reduced rates and costs. Other research shows credit card debt is now common across generations, with over 50% of Gen Xers, millennials, and Gen Z reporting that they carry balances month-to-month.
?? THE TAKEAWAY
Looking ahead ?? As interest rates and prices continue climbing, household debt will likely keep rising unevenly across income levels. Without better access to affordable credit, many low-income families may struggle to stay financially afloat in the years ahead. Policymakers should thus consider proposals to expand credit access and provide relief to these disproportionately burdened households. Otherwise, this might start a downward spiral…
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About: I am a business developer, sales professional, and FinTech strategist, as well as a 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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