Santander to Acquire Majority Stake in Ebury for ￡350M, Riskified Nets $165M and Joins Unicorn Club, GoCardless Teams Up with TransferWise

This week (4-8 November) was yet another interesting and exciting one in the world of FinTech. Banco Santander is to pay ￡350 million to acquire a 50.1% majority stake in Ebury, a provider of corporate banking services to SMEs that trade internationally, payments and fraud-prevention company Riskified has announced its Series E funding round of $165 million, pushing its value beyond $1 billion, GoCardless partners with TransferWise for borderless recurring payments, and much more.

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

Santander Drops ￡350M for Majority Stake in Ebury

Banco Santander is to pay ￡350 million to acquire a 50.1% majority stake in Ebury, a provider of corporate banking services to SMEs that trade internationally.

Ebury, which operates in 19 countries and 140 currencies, has processed ￡16.7 billion in payments for its 43,000 clients trading across Europe and the Americas. 

Under the terms of the transaction, Santander will acquire a 50.1% controlling stake for ￡350m, of which ￡70m will be new primary equity to support Ebury’s plans to enter new markets in Latin America and Asia. 

Santander serves more than four million SME clients worldwide, of which more than 200,000 do international business. 

Ana Botín, Group Executive Chairman of Banco Santander, said:

Small and medium-sized businesses are a major engine of growth around the world, creating new jobs and contributing up to 60% of total employment and up to 40% of national GDP in emerging economies. By partnering with Ebury, Santander will deliver faster and more efficient products and services for SMEs, previously only accessible to larger corporates.

For Ebury, the deal will enable it to leverage Santander’s capabilities, brand and correspondent bank network to establish new bank partnerships.

Juan Lobato and Salvador García, co-founders of Ebury, commented:

Combining a big bank with nimble fintech means we can offer our clients the best of both worlds: they can benefit from our technology and high quality service safe in the knowledge that they are counterparty to one of the world most important financial institutions.

Card-as-a-Service Provider Deserve Raises $50M

Deserve, a provider of bespoke white label credit card and loyalty programmes for third party audiences, has raised $50 million in a funding round led by Goldman Sachs.

The round also includes continued investment from existing backers Sallie Mae, Accel, Aspect Ventures, Pelion Venture Partners and Mission Holdings.

Deserve says it will use the cash injection to further develop its card-as-a-service offering, hiring engineers and data scientists to build out the platform's infrastructure, tools, APIs and machine learning capabilities, as well as expanding its B2B sales and marketing division.

"Goldman Sachs is supportive of Deserve's mission to expand access to credit, and to simplify the ability for organisations to offer their own bespoke credit card products," says Ashwin Gupta, managing director, Goldman Sachs. "We believe Deserve's card platform will bring meaningful savings and new opportunities to institutions across a range of verticals."

Riskified Announces $165M Funding

Payments and fraud-prevention company Riskified has announced its Series E funding round of $165 million, pushing its value beyond $1 billion.

The funding round was led by international equity firm General Atlantic, with Goldman Sachs serving as sole placement agent. 

Riskified provides an AI-powered fraud prevention service enabling merchants to recognise fraudulent customers, and counts LastMinute.com, Gymshark and Megabus among its clients.

According to Riskified, clients reduce fraud-related costs by a third and see approval rates increase by 20%.

The Israeli startup works as an intermediary between merchants, banks and shoppers to minimise friction at the point of sale. 

Aaron Goldman, managing director of General Atlantic's financial services sector, believes that Riskified provides "material improvements" compared to legacy fraud-prevention services and the payment failures and high-verification methods that can come with them.

Founded in 2012, Riskified had previously raised $64 million from investors such as Pitango Venture Capital and Qumra Capital, who both also participated in this round.

“Riskified began as a new and unproven approach to fraud prevention and payments," says CEO, Eido Gal. 

"Achieving success required merchants to believe in our vision and partner with us. Today’s announcement is a testament to those partnerships and the leadership position we attained in this important market.” 

The investment will be used to expand Riskified's footprint in the payments and fraud-prevention space and finance a new office in Shanghai, to go with its existing premises in New York and Tel Aviv.

GoCardless Partners with TransferWise for Borderless Recurring Payments

GoCardless has teamed up with TransferWise to help its business customers collect recurring payments from overseas at the "real" exchange rate.

London-based GoCardless taps into bank debit systems to help more than 50,000 business worldwide collect recurring payments online.

However, until now, firms could only use the platform to collect recurring payments from overseas if they had a local bank account in that market.

Now, GoCardless has built a global network that taps TransferWise for Business' foreign exchange technology to let its clients collect recurring payments from over 30 countries without a local account.

GoCardless CEO Hiroki Takeuchi says the global network will help firms collect international payments "without having to rely on the card networks or manual push-based mechanisms such as international bank transfers".

He added:

We are able to settle payments directly into your bank account, in your home currency, across any of the 30 countries we cover today.

JPMorgan Targets Ecommerce and Gig Economy with E-wallet

JPMorgan Chase has moved to bolster its valuable wholesale payments business by building an e-wallet that lets e-commerce and gig economy firms such as Amazon and Airbnb offer their customers virtual bank accounts.

With technology giants increasingly moving in on banks' turf, JPMorgan Chase has decided that its best option is to help them do it.

According to Bloomberg, the Wall Street giant has spent a year building an e-wallet that gives online marketplaces and gig economy players the ability to offer their millions of customers virtual bank accounts and related perks.

This will save the companies money on payment processing fees paid to, among others, JPMorgan.

However, in exchange, the tech firms will be require to let the bank handle all of their payment processing and cash movement.

With tech firms looking to move into financial services anyway, JPMorgan has calculated that it can cede some ground in exchange for securing the health of a wholesale payments business that contributed a tenth of the bank's $109 billion in revenue last year, says Bloomberg.

The likes of PayPal and Ayden are already threatening banks' payments revenues, while the fear of a US version of Alipay or WeChat haunts the industry.

JPMorgan is targeting the 10 biggest e-commerce and gig economy players. Takis Georgakopoulos, wholesale payments chief, tells Bloomberg: "We’re talking to all of them. We want the whole industry to use it.”

Last year, reports suggested that Amazon had begun talking to banks, including JPMorgan Chase, about developing a checking account-style product for its millions of customers.

At least one company could be live with the new offering by the end of the year, although JPMorgan could have trouble attracting all of its targets - last week, Uber chose to work with Green Dot on a wallet for its drivers.

??Subscribe?? to my weekly newsletters (followed by nearly ??29,000?? people) about FinTech and Blockchain & Crypto:

?? Weekly FinTech Digest

?? Weekly Blockchain & Crypto Digest

Also, don't forget to ??subscribe?? to my monthly series and always stay up-to-date:

?? Month in FinTech

?? Month in Blockchain & Crypto

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

?? Here's Why WeWork Simply Couldn't Work

?? 70 Blockchain Terms Everyone Should Know

?? The Biggest Deals in FinTech History are Taking Place NOW

?? All You Need to Know About Apple's New Credit Card

?? Apple Card vs. Amazon Card - Which One is Better?

***

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.

If you've enjoyed this piece, don't hesitate to press like, comment what you think and share the article with others. Let's spread the knowledge together!

For more, hit the subscribe button, follow me on LinkedIn & Instagram. I'm building the best community the social world has ever seen!????