Wealth & Banking Related Deals, Rumours and Funding – week ending Feb 10th, 2024
Overview: Funding in my covered segment was inflated this week off the back of debt facilities as opposed to equity financing. ?Thematically this week was about
1.??????? How embedded software applications, with the right partnership and channel distribution models can be appealing as part of both b2c and b2b2c target operating models.
2.??????? How there is still pockets of interest willing to invest in the right type of experience and focus in the direct b2c arena when it comes to investing and money management. The appeal is led through well designed mobile client engagement working hand in hand with social communities.
3.??????? Financial wellness remains an investible area amongst fintech, though there are many sustainable ways to try to provide this both inside the workplace, and directly to younger consumers.? Reports of low savings confidence, and poor financial literacy among GenZ and Millennials continues to support early stage investment.
Deal Rumours
Onfido (early backers ISIS and SFC Capital) in talks with Entrust
Why significant:
1.??????? Provides some evidence that embedded applications (point solutions) in key elements of the fintech value chain can become valuable, even while being loss making.
2.??????? Will provide some new data points on how strategic buyers are thinking about valuation metric, with this deal possibly trading at 4 to 4.5x 2023 revenue at time when top line growth was close 50%.
3.??????? May give guidance to how other mid stage firms that have been active for past 10yrs will try to exit if distance between remaining runway and profitability appears too great.
Deal Announced
Third Financial to be acquired by Nucleus Financial
Why significant:
1.??????? Valuation fell someway short of what was initially rumoured, but nevertheless provided a good exit for Grafton Capital thanks to not only the growth in the assets on platform, but also because of some commitments by consolidators toward the 3rd platform design.
2.??????? Provides evidence that Nucleus, as it attempts to centralize the SIPP businesses it acquired through James Hay and Curtis Banks on the new FNZ solution, will look toward 3rd to provide it with a different approach to market to larger advisory firms and consolidators seeking to use a wealth platform solution capable of supporting a DFM proposition.
3.??????? Gives Nucleus sales access into Third’s 40bl non-platform clients who nevertheless need to use an investment platform design within their overall value chain.
Funding
RAIN (rainapp.com ) Rain
Why Significant
1.??????? While the sort of solution that Rain is offering isn’t necessarily cutting edge, they have enacted some innovation, similar to Salary Finance in the UK around the administrative fee model which brings scale potential into their business should they have the secured capital (which they now do)
2.??????? There is a significant gap developing between financial welcome based on income levels emerging with certainly those that employ more staff in lower income jobs in hospitality, for example, seemingly more supportive of this type of product, rather than one that is about money coaching.
领英推荐
Why Significant
1.??????? Scandinavia is one of the European markets that has always had a relatively advanced approach toward electronic trading, vis a vis the likes of Nordnet, Advanza and Saxo, so the fact that a new neobroker has been funded to concentrate on these home markets suggests that lessons from the likes of Robinhood, Freetrade and Trade Republic can be applied to certain cohorts profitably.
2.??????? Pluto offer amongst other benefits a social trading solution to serve different needs thus suggesting that a major focus will be on engaging with “newbies” to the investment world.
ID Finance (idfinance.com ) ID Finance
Why Significant
1.??????? This is another play around the broader financial wellness theme, but through more of a lending lens than through other mechanisms that IDFinance has successfully launched in both Central America as well as in Spain, so the further advance in structured capital provides more funding for their expansion plans.
2.??????? The structure of the private debt clearly reflects the fact that as a qualified credit cohort, there is still an evolutionary process going on in terms of the quality of credit and the overall underwriting model.
Why Significant
1.??????? While some of the core banking initiatives, and particularly those with a BAAS approach have focused a lot around creating their own embedded solution designs, TUUM has taken a much more ecosystem and partnership oriented approach to enable it to be a partner of choice for new banking license holders to use to expand and enrich their own platforms.
2.??????? As the business is led by a former Mambu C-suite individual, there is clearly a strong belief the one of the key ingredients to winning new digital banking opportunities is to bring the right partnerships, integrations, and product catalogue to market for quicker, and more cost effective deployment.
DocStribute (docstribute.com ) docStribute??
Why Significant
1.??????? The company has been evolving its offering to broaden its appeal as it relates to document management and distribution, as well as demonstrate that its technology approach enhances security and authentication, and this has now been rewarded with some welcome early stage funding for commercial growth.
2.??????? The DLT approach which underpins the solution design should be appealing to the public sector market, as it remains one of the most paper intensive sectors, with insurance related activities a particularly strong target.
Suma Wealth (sumawealth.com ) Suma Wealth
Why Significant
1.??????? The funding will allow Suma to further validate its all in one platform design approach for creating an engaging financial wellbeing and wealth accumulation guidance platform for younger Latinos.? The platform is very much tapping into the knowledge creation and sharing concept alongside prudent and curated savings and money management services.
2.??????? The platform is following the leads of early providers like Smartasset in building tools that eventually can be aligned to personal goals best achieved through savings and investment rather than via credit and lending.
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9 个月Exciting deals! It's encouraging to see transactions that contribute to the ongoing conversation about financial wellness.
Exciting deals in the banking and wealth industry, keeping financial wellness in mind!