This Week in Fintech: 18 May-24 May 2019

Preamble (#TWIF)

Every week on Saturday, I publish a short article summarising the key events of the week from the Fintech segments from across the world.

In order to keep a balanced view on the segment, I capture happenings that drive our hope and counter that with a few not-so-happy events as well to allow us to be wary of the hype. In the final section, I capture key fintech investment rounds of the week.

Fintech: The Bright Side

May fintechs grew leaps and bounds this week

• Facebook has set up a new financial technology company in Switzerland focusing on blockchain and payments as well as data analytics and investing. Libra Networks, with Facebook Global Holdings as stakeholder, was registered in Geneva on May 2.
• On Tuesday, TransferWise raised $292m, doubling the value of the international payments firm to $3.5bn, in a sign that investor appetite is growing for British fintech companies.
• Wednesday saw Plaid announced its latest development ‘Plaid Direct’ that lets popular financial applications link between themselves, instead of routing back to a traditional bank account. Apps like Venmo, Wealthfront, Acorns or Betterment can plug in directly to each other and if they want to, bypass the banks.
• German savings platform Raisin, plans to bring its technology to the US within the next six to 12 months, which could provide a boost to community banks by connecting them to a bigger pool of savers around the country.
• Payments company TransferMate has entered into a strategic partnership that will see it handle global payments for the third biggest US bank, Wells Fargo.

Fintech: The Dark Side

While some landed on the wrong foot and took hits

• Tesco Bank, which serves more than 23,000 mortgage customers with total balances of ￡3.7 billion, said that it would stop new lending and seek to sell its existing portfolio of home loans.
• Jeremy Allaire, Co-Founder & CEO of Circle, announced that his company had decided to lay off 30 employees (approximately, 10% of its staff) in response to new market conditions, most importantly, an increasingly restrictive regulatory climate in the United States.
• After failing to secure further backing from the Royal Bank of Scotland (RBS), British fintech company Loot was forced to enter administration as a result of running out of funds. 
• The global march of China’s digital payments has hit a snag in Nepal as the central bank of the Himalayan country issued a notice on Monday banning the use of popular Chinese e-wallets Alipay & WeChat Pay.
• Challenger bank N26 found itself in regulatory hot water after German regulator BaFin has ordered the digital bank to tighten its Anti Money Laundering (AML) controls following a number of recent complaints

Fintech: Fuel the tank

• Fintech unicorns are leading the funding parade this week. Transferwise with its aforementioned $292M raise and global card issuer Marqeta reaching $2bn valuation with $260M raised.
• Artificial intelligence start-up Clinc scored $52M in series B, while Edinburgh- based LendingCrowd raised $24M to fund SME growth across the UK.
• Zero raised $20M to boost its latest credit product which works like a debit card.
• London-based flexible wage app Wagestream brought in $19M, while business payments disruptor Modulr raised $17.7M
• Wells Fargo led the $17M funding round in SaaS fintech OpenFin, while digital lender Lumi raised $8M to challenge its rivals.

Other notable funding this week have been:

• PayJoy, a provider of smart finance for the underbanked, raised $20M
• Swedish subscription management startup Minna Technologies ($6.3M)
• Koosmik, a Luxembourg-based finech firm which provides digital wallet in Africa. ($2M)
• Toronto-based AI platform Senso.ai ($1.5M)
• Crowdfunder fintech Lendahand ($1M)

See you next Saturday, with more fintech trends!