Weekly update #26

Welcome to this edition of the weekly newsletter. The idea behind this activity is to gather all the information in the startup ecosystem in one place, with a special focus on the fintech market.

Recently, I’ve been talking with many Venture Debt providers, all willing to speak with early stage startups in order to support their growth. I kind of noticed a trend here, and tried to deep dive into this topic in order to get the full picture. After the downtrend in 2022, as startups valuations continued to go down and the funding environment was becoming harder and harder, there was a spike in the number of deals made by founders and venture debt providers, with a specific focus on early stage startups.

As you can see in this image taken from a report on the venture debt market by Houlihan Lokey , in the last couple of years the amount of deals from venture debt moved steadily towards the early stage phases of the growth cycle of companies, including obviously also startups.?

But there is even more. As the number of deals was regularly going up with time, also impacted by the difficulty on raising from VCs, we saw a very interesting trend on the deal size, with tickets less than 100 million growing double digit year on year, and bigger tickets being more and more the minority. And in this trend, we saw many different deals with fintech startups, with prominent Venture Debt providers entering the market.

Finally, a very interesting snapshot of the market from Statista . You can clearly see from the graph, a current raising trend in number of deals for Venture debt, that is incrementally becoming a traditional way of raising funds in Europe, but more specifically you can the number of deals in terms of growth venture debt almost doubling from 2020 to 2024. In my opinion, this is not just a very interesting financial trend, but also a very clear indication on how hard it has become to raise capital from VCs more recently.

You can find here the report from Houlihan Lokey, but also two very interesting papers on the European Venture Debt market from the European Investment bank by 德勤 here, and a report on Venture and Growth outlook by Lazard here.

My main take away from the report, and from the other papers. I’ve been asking myself if I would suggest to startups to go for Venture Debt instead of Venture Capital, and still my answer is always the same: it strongly depends on the case and not all startups should go for it in my opinion. With a business model like revenue based financing, or a fintech startup in advance invoices, it makes sense to use a third party provider to back the day to day operations in terms of financing. But with most SaaS startups, fund growth with debt can be hard to sustain if you don’t have a solid business model. But I am glad to see many international players in this sector becoming more and more interested in the European startup ecosystem, with a special focus on Italy.?

Anyway we saw some very interesting news in the market this week. Stripe started to accept cryptocurrencies as payment methods, starting from USDC stablecoin. TabaPay acquired the financial assets of Synapses, after the collapse of this one, a story very well told by Jason Mikula recently. As anticipated, 苹果 is opening its tap-to-pay system to third parties in Europe this month, letting corporations and startups integrate openly. NVIDIA acquired Run:ai for 700 million to boost his presence in this sector. In the VC market, Norwest Venture Partners raised $3 billion for his 17th vehicle, while Seraphim Space announced his second fund, 14Peaks Capital raised $30 million and Flourish Ventures expanded its commitment in Africa. And a lot of very interesting fintech startups! Pomelo , Midas , Payflows , Zefir , Fortis , RockFi and many others.

But let's take a closer look at the main news of the last seven days:

Closed deals

• Equities platform Midas raised a $45 million series A in one of the biggest round for fintech in Turkey;
• Former Luko employees raised $25 million for Payflows, in a push to innovate financial management for corporates;
• Lithuanian startup Softloans raised a $1 million pre-seed from FIRSTPICK to boost the loan approval in Lithuania;
• Colombian based OnePay just raised $1.3 million to boost a payment integration with WhatsApp;
• Zefir raised $11 million to revolutionise real estate transactions;
• Unwritten raised $3.5 million to enhance climate change analytics in fintech;
• Cairo based bokra raised a $4.6 million pre-seed;
• UAE based Fortis raised $20 million to fuel expansion in MENA;
• Paris based RockFi raises $3 million to revolutionise private wealth management;
• HR platform Alleo raises $5 million to innovate how we think about compensation and benefits;
• Seedflex raised a Seed round in Malaysia from 500 Global;
• Pomelo raises $35 million to let immigrant workers send money back home;
• bump. secures a $3 million seed round to innovate how creators address their financial needs;
• Fundpath just raised a $2 million round to disrupt wealth and asset management industry;
• 401GO secures a $12 million series A to modernise retirement solutions;
• FlexAI raises $30 million to fix a bottleneck in AI compute;
• Perplexity is raising $250 million more at a valuation of between $2.5 billion and $3 billion;
• Parloa secures $66 million to boost expansion in the US market;
• Chilean based Fintoc just raised $7 million to boost his instant payments API solution;
• RevenueCat closed a $12 million series C for his subscription management platform;
• Northern Arc Capital raised $80 million to boost financial inclusion in India;
• Coffee shop payments startup Dripos closes a $11 million series A.

Insights on the VC industry

• Seraphim Space just announced his second fund, with nine investments already committed;
• 14Peaks Capital raised $30 million to back fintech and the future of work;
• Flourish Ventures's Madica just expanded their commitment for investment in early stage startups in Africa;
• Norwest Venture Partners is breaking records as it raises $3 billion for his 17th vehicle!

Strategic moves on the market

• TabaPay acquires financial assets from Synapse Financial Technologies, Inc.;
• Apple is going to provide access to his tap-and-go mobile system to third party in EU as early as next month;
• Thunes announces the acquisition of Tilia;
• Walmart backed fintech startup One is introducing a new buy-now-pay-later feature for retail;
• Teylor AG acquires creditshelf AG in what could be Europe leading alternative lending powerhouse;
• US legislators are asking for 36 months in jail for Binance CEO Changpeng Zhao;
• Klarna and Uber are forging a partnership to boost flexibility in mobility payments;
• ComplyAdvantage closed the acquisition of Golden and welcomes Andreessen Horowitz among their shareholders;
• JTC Group acquires First Republic Trust Co from J.P. Morgan for $21 million;
• NVIDIA acquires Run:ai for $700 million;
• Stripe is letting user pay with cryptocurrencies, starting from USDC stablecoin;
• Paystand acquires Tampa to be the Venmo of B2B payments.

A special look in the Italian market

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Startups raising funds

• Fantalegends - a Fantasy Football free-to-play mobile game that aims to provide an enjoyable and safe experience, user-centered, with more than 2k daily active users. Raising $1M.
• PopulaRise - The platform that allows companies of every dimension to promote themselves on social media through the collaboration with their clients. B2B2C SaaS. Raising $1M.
• Bitcoin People - Fintech company focused on crypto payments between corporate and cross countries. B2B, SaaS. Raising $500k. Round closed!
• Tutornow - Edtech that provides an online tutoring platform for students with learning disorders. Raising $500k to $1M.
• Recivu - Fintech? startup trying to digitize the receipt flow by getting rid of papers. Looking for $150k in SAFE, already $50k committed.
• Weagle - B2B Tech startup that provides the very first browser designed for company, with total security for sensitive data. Raising $6 millions for their seed round.
• Reach Finance - Reach is the fintech platform for wealth accumulation for the Y&Z generations, they provide users with the tools to build wealth such as a budget tracker, a financial plan and a systematization of investments. Looking for $700k, with already $500k committed;
• wrapp.ai - A fintech startups that offers a virtual accountant and CFO that can help SMEs scale globally. Looking for $1 million, $750k already granted from public funds, looking to close the last $350k.

If you are a startup and want to be present in this list, please contact me directly.

If you are an angel investor or a VC interested in those companies, contact me for an intro!

Take also a look at the last edition of the newsletter, Weekly update #25