Tencent invests in Monzo ??; Nubank adds Games, Travel & Pets to its Super App??; Adyen goes head-to-head against Block, PayPal, & others ??

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Last week (3-7 January), despite being the first week of 2022, was a crazy exciting one when it comes to FinTech.?We will look at the potential Monzo rebirth with the newest backing from Tencent; Nubank expanding its Super App with Games, Travel, and Pets; Adyen going head-to-head against Block, PayPal, SumUp, and others with their POS rollout, 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.

Tencent invests in Monzo ??

The news ???Chinese gaming and social media giant?Tencent?has taken a small stake in Britain's digital neobank?Monzo?as part of a fundraising, the digital bank said recently. It happened just weeks after it fetched a valuation of $4.5 billion.

Tencent joined a round that raised $600M in new investments, led by the Abu Dhabi Growth Fund. A first close of the funding round earlier in 2021 featured existing investors Accel and General Catalyst. Monzo did not disclose details of Tencent's stake, but the Chinese firm reportedly was investing a minority of a $100M capital injection.

The struggle ???Founded in 2015, Monzo is a neobank with more than 5M customers, but the biz has struggled to turn a profit, with annual losses widening in 2021 as it disclosed it was facing a potential civil and criminal money laundering probe.?

One must note that Monzo saw trouble earlier in the pandemic when valuations plummeted and some speculated that the digital-first bank might not be able to survive. That said, Monzo even saw its valuations fall to ￡1.25 billion from ￡2 billion in 2019 due to pandemic-era card transaction declines.

?? THE TAKEAWAY

Regaining confidence? ???As I’ve?written earlier, the recent Monzo funding round & now backing from Tencent further demonstrates investors’ continued confidence in the neobanking space, and Monzo specifically. Obtaining x3 in valuation in a single year is not that common, especially for a neobank that has been having a lot of issues lately. Yet, what’s important for Monzo now is to show it can do more than just sign up new customers. Adding new products such as BNPL, crypto, stocks, etc. are some of the ways to get closer to profitability. It does not only provide new ways to monetize users but also helps to maintain its competitive edge. Finally, it’s worth noting that Tencent has a big global FinTech portfolio and has deals in several other companies like Argentine personal finance app Ualá, Qonto, and Lydia, both French startups, and challenger bank Tyme of South Africa while learning backing German neobank N26 as well. Maybe it’s about time for Monzo to reborn? ??

Nubank adds Games, Travel & Pets to its Super App??

Expansion ???Brazilian FinTech heavyweight?Nubank?has just added three new product categories – Games, Travel, and Pet – and ten new partner stores to its in-app e-commerce vertical.

The digital bank’s customers will now be able to buy products directly from the FinTech app, from stores such as Netshoes, Zattini, Shopee, Nike, Centauro, Booking.com, Xbox, Playstation, Hype Games, and Petlove.

This makes Nubank a clear?Super App?proposition.

Supper App play ???It can be reminded that Nubank’s?in-app e-commerce platform?as they call it was launched in November 2021 as part of the company’s strategy to expand its product portfolio.

Nubank currently offers credit cards, accounts for individuals and companies, investments, personal loans, insurance and it has already included the offer of products from partners in its app, such as international transfers from Remessa Online and, more recently, loans with vehicle guarantees from Creditas.

?? THE TAKEAWAY

Growing up.?Nubank has been a massive success and a must-follow story for everyone in FinTech (that, in part, has led to their blockbuster IPO late last year). And yet, despite its state-of-the-art customer acquisition, the FinTech heavyweight must now show it can do more than just sign up new customers. And this is exactly what Nubank is doing with the Super App play. Add it also to the expansion into new markets, and it now only helps Nubank to maintain its differentiation from incumbents, but also brings it closer to profitability. I’m incredibly bullish on Nubank in the long run.

Disclaimer: I’m a shareholder of Nubank

Adyen goes head-to-head against Block, PayPal, and others with POS Rollout ??

The launch ???The Netherlands-based payments giant?Adyen?has announced the launch of mobile Android POS terminals in the US, EU, and the UK.

The move is a direct head-to-head against Block (formerly Square), PayPal (via iZettle), SumUp, and others.

The POS ???The devices function as an all-in-one solution, acting as cash registers, bar code scanners, and customer-facing displays. The POS comes with a built-in app management system that allows merchants to upload and manage the apps they use daily for returns, inventories, and more. the launch of these terminals will reduce the costs of the hardware and boost in-person customer experiences for merchants.?

The new points of sale (POS) combine the flexibility of the Android platform with the security of a PCI-certified payment terminal and support many use cases.?

The USP ???For those of you who don’t know,?Adyen?is a Dutch payment platform used by some of the world’s most notorious companies, providing infrastructure for Visa and Mastercard. Its services are used by customers such as Spotify, L’Oreal, Facebook, and Uber.

Adyen is publicly traded with a current market cap of close to $76 billion.

?? THE TAKEAWAY

Massive opportunity.?With this launch, Adyen can use its new mPOS offering to target both small and large businesses that may want to ramp up in-person retail activities during pandemic reopenings. The solution can thus help Adyen penetrate the small business arena and offer its enterprise customers—which generated?97% of its volume?in H1 2021—a value-added product that complements their other payment tools. The solution also helps Adyen gain a stronger in-store retail foothold, which still makes up the majority of total retail sales in markets like the UK and the US. And it opens a cross-selling opportunity for Adyen by encouraging merchants that want to limit costs through more interconnected payments systems to use its other payment services.

Extra Reads & Quick Bites for Curious Minds??

• Are cards done? ???Billionaire investor Chamath Palihapitiya?says?Visa and Mastercard will be the biggest business failures in 2022, losing out to altcoin-linked projects like blockchain and DeFi. He predicts the card providers are a “duopoly that [doesn't] need to exist" in the wake of new forms of digital money.?Hmm, I doubt it…
• Another player in the BNPL space ???UK-based FinTech?PollenPay?has prepared to launch into the Buy Now, Pay Later space, with several retailers ready to offer its payment option from its first day of launch. Company officials stated that they witnessed the initial BNPL boom first-hand and began plans to refine and adapt the concept to fit the UK market. PollenPay offers customers interest-free instalment plans on purchases by charging retailers a small fee.?What’s unique here????
• JMP Coin in action ???The Central Bank of Bahrain has completed a test of the JPM Coin with Onyx by J.P. Morgan, which allowed Bank ABC to launch real-time payment for Aluminium Bahrain (ALBA) in the U.S. The JPM Coin is a permissioned system that serves as a payment rail and deposit account ledger to allow participants to transfer U.S. dollars that are being held with J.P.Morgan on deposit.

Money Moves??

• Germany-based start-up?re:cap, which offers a non-dilutive, revenue-based financing platform for businesses, has raised $111.5M in its seed round. The start-up had previously raised $1.5M in a pre-seed round in May 2021. The funding is made up of a combination of growth capital and liquidity for its platform. Felix Capital, Project A Ventures, and existing investor Entrée Capital all contributed to the round.
• Global investment organization focused on FinTech?Ribbit Capital?has raised $1.15B in its alleged seventh fund, according to a filing with the?US Securities and Exchange Commission?(SEC).
• Private equity firm?Corsair?has acquired a majority stake in?Aurora Payments, a payments solution provider for small- to medium-sized businesses (SMBs).
• France-based?PayFit, a payroll and HR management solution for SMEs, has raised EUR 254M in a Series E funding round.

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:

?? Bitcoin in 2021: a story in 5 graphs, and what might come in 2022

???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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