The Uber move, but reversed - from FinTech to ride-hailing ??; Massive Amazon + Venmo deal ??; Fastest European FinTech to become a unicorn ??

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Last week (9-12 November) was a super exciting week in FinTech.?We will look at?the Uber move but reversed - from FinTech to ride-hailing; massive Amazon & Venmo deal; the fastest European FinTech that became a unicorn, 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.

The Uber move, but reversed - from FinTech to ride-hailing ??

The news ???After pioneering FinTech in South Korea,?Viva Republica—one of the country's most valuable startups—is making its first foray away from the world of finance and into the cut-throat arena of ride-hailing, according to Forbes.

Started from FinTech ???Viva Republica operates?Toss, a finance super app with over 20M users in Korea, which is equivalent to more than 1/3 of the country’s population.

Launched in 2015, Toss started out as a money transfer service and has since expanded to offer a suite of financial services, including banking, insurance, and investing. Now, nearly 7 years after launching Toss, Viva Republica is making its first major move beyond digital finance.

Now we here ???Later this month, Viva Republica expects to complete its acquisition of a 60% stake for an undisclosed amount in Seoul-based VCNC, which operates a ride-hailing service in Korea called?Tada .

VCNC launched Tada in 2018 and the company?says ?it has about 2M users. Around 90% of Tada users use the app regularly,?according ?to VCNC.

?? THE TAKEAWAY

Data, data everywhere ?????The move by Toss seems to be inspired by the success of Southeast Asian internet giants?Grab?and?Gojek?(renamed to GoTo Group after merging with Indonesian e-commerce platform Tokopedia in May). The important thing to note here is that the mobility data have been some of the key pillars for Grab and Gojek. Both Grab and Gojek started off as ride-hailing companies, and after achieving a critical mass of users, the two companies built an ecosystem of services around ride-hailing, including financial services, among others. Grab and GoTo have managed to build robust credit score models and insurance policies because they have all of the data of drivers' behaviors. Toss wants to replicate the same. If it will succeed, it will be one of the most interesting pivots in FinTech to date.

Massive Amazon + Venmo deal ??

The news???Venmo ’s?mother company,?PayPal , has announced that retail giant?Amazon?is adding a Venmo payment option for customers in the US, starting 2022.

Amazon shoppers will hence be able to link their accounts to Venmo’s mobile payment service for purchases made both on Amazon’s website and the company’s mobile shopping app.?

New way ???With over 80 million in the US alone, PayPal represents an easy way to purchase goods and transfer money from one account to another.

However, the mother company is not supported as a payment method on Amazon currently, which means the addition of Venmo could open the way for more than 65 million users to start shopping on Amazon.

Still closed ecosystem ??♂??Amazon remains restrictive in its payment methods and will not allow clients to purchase goods using cryptocurrencies or alternative payment apps like Venmo, outside of the US.

?? THE TAKEAWAY

Huge news.?Primarily for PayPal. The partnership is a huge opportunity for Venmo to expand the use of its checkout functionality and grow its payments volume. Pay with Venmo will definitely be one of the key revenue drivers for the app moving forward and getting closer to profitability, and given the scale that Amazon has, their goal becomes much more achievable. On the other hand, if Venmo integrates PayPal’s Checkout with Crypto functionality, Amazon could use it to meet the rising consumer demand for the payment method without launching a crypto service themselves. With that, Amazon could test out a much-demanded crypto capability with very little effort.

Fastest European FinTech to become a unicorn ??

The funding ???Zilch,?the direct-to-consumer buy-now-pay- later (BNPL) provider, has closed a $110M Series C funding round, pushing its valuation to more than $2B and making it the fastest European company to become a unicorn from its Series A round.?

The oversubscribed?round was led by Ventura Capital and Gauss Ventures and?was closed in just 3.5 weeks from its launch.

The USP ???Zilch only opened in beta in 2019, looking to distinguish itself in the crowded BNPL arena by connecting directly with customers and using soft background credit checks performed by Credit Kudos via Open Banking to determine affordability.

Working with Monavate, the company has built an over-the-top platform meaning that it is merchant agnostic, letting customers tap to pay wherever they want.

Headquartered in London, the company?was one of the first BNPL providers in the UK to receive a consumer credit license from the FCA and secured a lending license in California earlier this year.?

Numbers ???Although BNPL is a crowded space, Zilch’s numbers are pretty impressive. Zilch now has well over 1 million customers and is adding 200,000 a month.

Since the company’s last funding round in March 2021, the business has grown more than 800%.

?? THE TAKEAWAY

Execution & inspiration.?There are two things that I’m taking away from this. First, Zilch’s strategy. Similar to what Zoom did to skype, Zilch is trying to directly serve customers by allowing them to pay over time anywhere for anything. That’s different, and it works (at least in the UK), despite the strong network effects that Klarna has managed to leverage. It will be interesting to see whether this could be scaled across the EU and the US. Second (and maybe even more important), is that Zilch still has over half of its equity capital in the hands of founders, the vast majority owned by Belamant, the CEO. That’s a big and inspiring thing, especially thinking about the future network effects and further expansion of the business. Worth being bullish on them for sure.

Extra Reads & Quick Bites for Curious Minds??

• New kid in town ???A new digital challenger bank for the UK’s 4.8M “mass affluent” customers is gearing up to launch following the lifting of regulatory restrictions. In October 2020 Monument?was granted ‘authorisation with restriction’ by the?Financial Conduct Authority?and Prudential Regulation Authority to begin acting as a fully-fledged bank, with restrictions usually being removed following the completion of a larger capital raise. At the same time, it raised its Series A fundraise, which went on to total?￡28M when it closed in February.?To date, it has raised ￡60M of?capital.
• Robinhood hack ???Brokerage and crypto-buying app?Robinhood?has experienced a data security incident, resulting in a hacker stealing 5 million customer email addresses. The incident took place on November 3 by an “unauthorized third party,” who also stole additional personal details from several clients. Robinhood addressed what happened in a blog post, saying a hacker had “socially engineered a customer support employee by phone and obtained access to the certain customer support system.”?That’s what happens when you want to grow at all cost…???♂?
• Strong results ???A bit more than 5 months after it went public, Marqeta’s latest quarterly results spotlight the continued momentum where card issuance continues to make the leap from plastic to digital. In its most recent earnings report, Marqeta said that its total processing volumes gained 60% year over year in the third quarter, buoyed by growth in digital banking and buy now, pay later (BNPL) to $27.6B. Those volume gains helped revenues jump 56% year over year to $132M.

Money Moves??

• Argentinian FinTech?Ualá?is stepping up its presence in Mexico through the acquisition of local bank?ABC Capital. The deal, subject to government authorizations, will enable Ualá to move into new business verticals.
• Tot, an Italian FinTech startup serving freelancers and micro-enterprises, has finalized a €2M seed funding round from Banca Sella ahead of market entry in early 2022. Tot will offer account, and digital banking, credit, and payments services to help small businesses keep on top of administrative financial tasks, monitoring and managing expenditure, collections, earnings, and tax provisioning.
• Atomic, a US outfit that provides an API to help banks and FinTechs integrate investing into their products, has launched with $25M in Series A funding. QED Investors and Anthemis co-led the round, with participation from Softbank and Y Combinator.

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

???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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