Weekly update #53

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

The latest episode of Builders has been released this week. In this episode, I sit down with Patrick St?uble , CEO and co-founder at Teylor AG , to talk about the European lending market for SMEs and the overall fintech ecosystem.

Patrick founded Teylor in 2018 in Zurich as an SME lending platform, providing a web-based loan application process. Due to the success of the solution, they launched a SaaS product to help banks and financial institutions with those processes, and more recently a Private Debt arm that also includes a Debt Fund.?

You can find the complete video interview here on YouTube, or you can listen to the podcast here on Spotify or here on Apple Podcast.??

As always, if you are a VC manager or a founder and want to be the next guest on the podcast feel free to send me a message on LinkedIn!

Coming back to us, this week I read an interesting report from CB Insights , about the status of the fintech industry in Q3 2024. The report took in consideration global data and analysis on dealmaking, funding and exits by private market fintech companies all over the world. Here my main takeaways:

First of all: the situation is still pretty bad. The chart illustrates quarterly trends in fintech equity funding and deals from Q1 2020 to Q3 2024. In Q3 2024, the industry experienced a significant decline in both funding and deal activity. The number of deals dropped to 892, and total funding fell to $7.6 billion. This represents a substantial decrease compared to the previous quarter. The peaks, both in terms of funding and deals, of Q2 2021 and Q1 2021, are long gone.

The one above is the annual average and median deal size in the fintech industry from 2020 to the year-to-date (YTD) in 2024. The average deal size fluctuated, peaking in 2021 at $28.0 million, declining in 2022 to $16.4 million, and slightly increasing to $12.7 million in 2024 YTD.

Similarly, the median deal size declined from $4.4 million in 2020 to $3.0 million in 2022, but has since increased to $4.0 million in 2024 YTD.

Something that I found really interesting is the composition in terms of stage and geographies. Quick example here: the US leads by a landslide in terms of funding to early stage startups (63% of the total funding), indicating a strong environment for newborn companies to be born and grow. Europe, under that point of view, is less than 10%, and that is a strong indication of the poor willing to invest in innovation of our continent.?

When we go up in terms of stage, this difference reduces between the different environments, indicating a strong presence of capital across different countries for late-stage ideas, most probably due to the potential of having a liquidity event.

Finally, another very interesting data, probably related to the last point I made. Median funding by stage, when we talk about early stage we saw an increase of the median between 2020 ($2M) to 2024 ($3M). An increase probably related to certain specific areas of the world, for example the US.

Mid and later stages instead, are experiencing a decline in terms of median value of the rounds, probably related to the 2 years of downturn we are currently experiencing.?

Anyway we saw some very interesting news in the market this week. Klarna valuation rises again ahead of the upcoming IPO, as updated by one of the main investors. Scalapay strikes a deal with 法国巴黎银行 to finance up to $3 billion of new credits, while Nubank launched a new mobile service called NuCel. Sadly, we also had two different round of layoffs, with Visa and Dropbox letting people go recently. In the VC market, we saw multiple new funds, with 360 Capital closing a new $30 million fund called 360digitaly guided by Lucrezia Lucotti , Chemistry closed a staggering $350 million first fund,? and General Catalyst closing more than $8 billion in multiple new funds. But also Javelin Capital , HRZ Han River Partners and Cox Enterprises . And finally, some very interesting funding rounds from fintech startups like Mala Inc. , UnitPlus , Zilch , Wildfire Systems, Inc , Osigu , Moniepoint Group , Brightwave , Oportun , Billd , Melio , Tabs and many others.

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

Closed deals

• Saudi fintech Mala Inc. raised a $7 million pre-seed funding round
• Berlin based UnitPlus raises a $4.7 million seed round to revolutionize investing
• Zilch expands securitisation to $150 million with major investment from Major Global Credit Fund with Deutsche Bank
• Wildfire Systems, Inc secured a $16 million series B
• Latam fintech Osigu raises a $25 million series B to bridge a gap between healthcare and payments
• PublicSquare announces a $5.35 million PIPE investment , on top of a 35% workforce reduction
• Nigerian fintech Moniepoint Group raises a staggering $110 million Series C
• AI fintech Brightwave raises $15 million series A for its ai agent for asset managers
• Fintech AI startup Auquan announced an additional $4.5 million in seed funding , making it a total of $8 million
• Lending as a service startup Finfra raised a $2.5 million in a funding round led by Cento Ventures
• Oportun secured a $235 million credit facility from Castlelake
• Billd secures a $17.5 million investment for its financial subcontractors solution
• PowerPay secures $60 million in corporate bond funding to accelerate growth
• Israeli fintech startup Melio raises a $150 million funding round
• Revenue automation platform Tabs raises a $25 million series A
• Swedish AI scalp Sana raises $55 million at a $500 million valuation

Insights on the VC industry

• 360 Capital announced the closing of a $30 million first fund called 360 Digitaly
• Former Bessemer Venture Partners , Index Ventures and a16z alumni launched a new $350 million VC fund : Chemistry
• Pan-African VC Janngo Capital has closed a second fund at an impressive $78 million
• HRZ Han River Partners closes a new $100 million venture fund
• Cox Enterprises launches Sodium Ventures with a first $300 million fund
• General Catalyst raised approximately $8 billion in new funds
• Javelin Venture Partners announced a fifth $125 million fund , with UBS as new investor

News on the market

• Socure has announced the acquisition of the risk decision firm Effectiv for $136 million
• New York based fintech DailyPay, Inc. secured an additional $100 million in credit from Citi
• Klarna valuation continues to rise, as one of its key shareholders Chrysalis Investments (Investment Trust) increased the value of its stake
• Indian fintech slice successfully completed the merger with North East Small Finance Bank , a rare startup entry in the Indian banking system
• Gaming company KRAFTON Inc. just became an anchor limited partner in IMM Investment Corp. maiden India fund
• Dojo partners with YouLend to enable businesses to apply for funding up to $1 million
• BNPL provider Scalapay strikes a deal with BNL BNP Paribas to finance up to $3 billion of current and new credits
• Visa will layoff 1,400 employees as it pushes more on international business
• Brasilian fintech giant Nubank announced the launch of NuCel, a new mobile phone service
• nCino, Inc. announced an agreement to buy the UK platform FullCircl for $135 million
• Consumer platform Array announced an agreement to buy embedded debt platform Payitoff
• Airwallex is reported by Bloomberg in talks to raise a $200 million round at a $6 billion valuation
• PayToMe.co secures a seed round to become the "Amazon of financial services"
• Apple expands tap-to-pay in many new countries in Europe , in collaboration with Adyen , SumUp and Viva.com

A special look in the Italian market

• 360 Capital announced the closing of a $30 million first fund called 360 Digitaly

And here some useful resources for everyone involved in the ecosystem:

Events you don’t want to miss

• Web summit | Lisbon 11-14.11.2024 (Link to the invite or website )

You have a cool event you want to mention or to sponsor? Feel free to send me a DM.

Startups raising funds

• Loyyal - Loyalty platform from the MENA region, with entities in the US and South East Asia, provides a B2B2C platform to handle multiple loyalty programs and earn rewards all over the world. Raising a $6M Series A
• Freedhome - Proptech and fintech platform, enabling people to be able to gain profit from real estate by renting them to intermediaries. Raising a $1M seed round

• 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.
• 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.
• Shoppy Code :Gift card platform that offers a points based loyalty program. They share part of the profits coming from marketing budgets with their customers. Raising $500k.

Take also a look at the last edition of the newsletter, Weekly update #52