Top 5 Fintech News Week 05/52 (29-01-24)
Klarna Expands into the US Subscription Market with Klarna Plus Launch
Klarna, the global payments network and shopping assistant, has expanded its services with the introduction of Klarna Plus, a premium subscription model available to eligible US consumers through the Klarna app for a monthly fee of $7.99. With a focus on enhancing the shopping experience for its 37 million loyal users, Klarna Plus offers exclusive benefits such as double rewards points, waived service fees on Klarna’s One Time Card, and special deals with popular brands like Nike, COACH, and Macy’s. The move into the subscription market reflects Klarna's commitment to diversifying its portfolio and engaging with consumers in a rapidly growing market projected to reach $2419.69 billion by 2028. The launch comes amidst Klarna's significant growth in the US, with a 32% increase in its customer base over the past year, highlighting the company's evolution into a comprehensive shopping and payments ecosystem beyond Buy Now, Pay Later.
Tink Unveils Risk Signals for Instant Payment Experiences
Tink, the open banking market leader, introduces 'Risk Signals,' a rules-based risk engine facilitating instant payment experiences across Europe while mitigating risks. Traditionally, bank transfers in some European markets take up to three days, causing delays for consumers and challenges for businesses. With Risk Signals, businesses can now offer quick checkouts without compromising on risk reduction. The tool uses account data shared by the payer to assess transactions in seconds, minimizing fraud risk in the background. Available in Germany initially, with Adyen already utilizing it, Risk Signals provides secure, fast payment methods, especially in markets without real-time settlements. Customizable risk checks include live balances, transaction history, and velocity checks. Tink's Risk Signals takes just a week to implement and requires no customer integration. Dirk Jan Meijers of Adyen praises the enhancement to the open banking payment landscape, particularly in Germany. Tom Pope, SVP of Payments and Platforms at Tink, emphasizes the balance between fast checkouts and risk reduction.
Mondu Boosts European Expansion with €30M Debt Financing
Berlin-based B2B payment solutions provider Mondu secures a €30 million debt financing deal with German bank Vereinigte Volksbank Raiffeisenbank (VVRB), increasing its credit facility to €50 million. This comes after an initial €20 million funding in October 2022. With a Series A equity funding round led by Valar Ventures, Mondu raised €39.5 million in May 2022, later extended by €11.9 million in early 2023. Founded in 2021, Mondu has accumulated over €115 million in equity and debt funding, aiming to drive its expansion across Europe. Currently offering buy now, pay later (BNPL) and digital trade accounts in six European countries, including Austria, the Netherlands, Belgium, France, and the UK, Mondu plans to utilize the latest debt financing boost to accelerate European market expansion and develop additional payment solutions. Philipp Povel, co-founder and co-CEO of Mondu, highlights the funding's significance in enabling expansion and solution development.
Source: Fintech Futures
Pinwheel-Jack Henry Partnership Strengthens Financial Institutions' Primacy
Pinwheel's partnership with Jack Henry enables the latter's clients to gain an edge in client acquisition, showcasing how fintechs can swiftly expand in a competitive landscape. Through this collaboration, Pinwheel's direct deposit-switching solution is integrated into Jack Henry's digital banking platform, utilizing the Banno Digital Toolkit for seamless embedding into community and regional financial institutions' digital offerings. This service is now accessible to nearly 1,000 fintechs and 7,500 financial institutions. Covering 100% of the American workforce, Pinwheel's direct deposit-switching solution facilitates quick transfers. The Jack Henry alliance complements Pinwheel's efforts to establish a payroll partner network, including companies like OneSource Virtual. It streamlines the identification and authentication of U.S. workers' payroll records within the bank account application workflow, eliminating the need for consumers to enter credentials. The collaboration exemplifies fintech agility in expanding reach and enhancing user experience.
Source: Fintech Nexus
Sygnum Secures $41M for Crypto Expansion
Crypto bank Sygnum AG secures 35 million Swiss francs ($41 million) in funding to support its expansion and acquisition endeavors. The investment, led by asset manager Azimut Holding, values Sygnum at approximately 725 million Swiss francs, similar to the valuation in a previous round in January 2022, according to co-founder and CEO Gerald Goh. Sygnum aims to enter one more European jurisdiction and one more Asian jurisdiction this year, pending necessary approvals. Despite a decline in crypto venture funding post the 2022 digital asset market downturn, Sygnum has doubled its client base to over 1,700 and increased assets under management twofold to 3.7 billion Swiss francs by the end of 2023. Operating as a digital asset bank in Switzerland and providing asset management and crypto brokerage services in Singapore, Sygnum eyes European acquisition targets offering services similar to its existing activities. Goh emphasizes that all acquisition opportunities align with Sygnum's current operations. The firm previously raised $90 million in January 2022, led by Sun Hung Kai & Co. The latest funding reflects Sygnum's resilience and continued growth amid market challenges.
Source: The Crypto Times
Zilo Secures £25m in Series A Funding
The funding was spearheaded by Fidelity International Strategic Ventures (FISV) and Portage, with additional contributions from State Street and Citi. According to PitchBook data, the company had previously raised $10.6 million in a seed round in October 2022.
Established in 2020 and headquartered in London, Zilo's mission is to enhance cost efficiency, reduce complexity, and generate sustainable value for global asset and wealth management firms, along with their clientele. Zilo's software facilitates the replacement of outdated legacy systems with a digital, real-time user experience. The platform went live with its inaugural client in July 2023.
The newly secured funds will be channeled towards accelerating product development, fostering user acquisition, and expanding its presence in the market. Additionally, the capital will be allocated to entering new markets and establishing strategic partnerships to diversify its offerings.
Philip Goffin, the founder and CEO of Zilo, commented on the funding, stating, "We are committed to empowering financial service institutions to phase out obsolete legacy technologies and significantly enhance the cost efficiencies of their operations by leveraging Zilo to transition to a modern digital solution that supports existing fund structures, new digital assets, and improves client experiences."
SOURCE: Fintech Inshorts
Amethis buys majority in CBS
Headquartered in Paris, France, CBS has been delivering banking solutions internationally for the past 25 years. Its prominent offerings include CapitalBanker, a core banking solution, and CapitalPrivate, a wealth management solution tailored for European private banks and wealth management specialists.
CBS, employing over 300 professionals, operates in multiple locations, including France, Monaco, Switzerland, the USA, Morocco, Lebanon, and Ivory Coast.
Amethis, through its investment, aims to support CBS in accelerating organic growth, especially on an international scale. The strategy includes facilitating CBS's external growth through strategic acquisitions, expanding its geographical reach, and reinforcing existing services.
In this transaction, Amethis secures a majority stake, collaborating with CBS's president and CEO, Samer Hanna, COO Michel Tueni, CFO Aziz Akl, and other key executives, all of whom are reinvesting their proceeds. Founded in 2012 and based in Paris, Amethis manages assets exceeding €1 billion, with over 30 investments to date. As a partner member of Edmond de Rothschild Private Equity, Amethis provides growth capital to mid-sized businesses across various sectors through its six offices in Europe and Africa.
Ant Group Close to Acquiring MultiSafepay
In its pursuit of global expansion, Ant Group had previously entered the Singaporean market through the acquisition of 2C2P in 2022. Known for operating the cross-border payments platform Alipay alongside its affiliate Alibaba Group, Ant Group has established itself as a key player in the worldwide financial services market.
MultiSafepay, generating an annual revenue of US$50 million, is poised to become a valuable addition to Ant Group's European portfolio. Unlike many companies, MultiSafepay has achieved substantial growth organically, with no external investment, expanding from its native market into Spain and Germany.
Ant Group's latest acquisition involves obtaining 100% ownership of MultiSafepay, a company renowned for providing payments acquiring and processing services to over 18,000 SMEs. Moreover, MultiSafepay collaborates with commercial partners to offer supplementary services to its clients. In 2022, the Dutch firm recorded a net profit of US$1.43 million on gross income totaling US$13.02 million. With this impending deal, MultiSafepay's CEO, Olaf Geurs, is expected to pass the reins to Ant Group.
SOURCE: Fintech Magazine
FirstOntario's Open Banking Readiness with Flinks and Everlink
This partnership is set to provide greater control over financial data to FirstOntario's members, enabling the credit union to deliver a more personalized range of financial services. Lloyd Smith, CEO of FirstOntario, emphasizes the importance of this capability as a "key strategic priority" and underscores the readiness to offer this emerging service once legislatively enabled, given the anticipation surrounding open banking in the marketplace.
Flinks, headquartered in Montreal and majority-owned by the National Bank of Canada, and Everlink, based in Markham, joined forces in March 2023 to spearhead the adoption of consumer-driven banking in Canada. They achieved this by combining Flinks' open banking infrastructure product, Outbound, with Everlink's digital solutions.
This collaboration aligns with the federal government of Canada's initiative, unveiled last November, to implement an open banking framework in its upcoming budget. The framework is slated to be nationally operational in 2025, prompting financial institutions like FirstOntario to establish partnerships with suitable providers in preparation.
Yves-Gabriel Leboeuf, CEO of Flinks, notes the growing momentum for a consumer-driven financial industry, emphasizing that the inclusion of open banking functionality within FirstOntario will "elevate the banking experience" for its members.
As per the federal Department of Finance, approximately 9 million Canadians currently use screen-scraping to share confidential banking credentials with service providers, posing privacy, liability, and security risks. Canada aims to replace this process with open banking, following the lead of countries such as Australia, the European Union, the UK, Japan, and Singapore.
SOURCE: Banking Frontiers
Global Fintech Investment Drops 48% in 2023
The number of funding deals also saw a notable reduction, with capital being distributed across a total of 3,973 deals compared to 6,397 deals recorded in 2022. The United States maintained its position as the leader in fintech funding by a considerable margin, attracting $24 billion across 1,530 deals. The UK secured the second spot with $5.1 billion, followed by India in third place with $2.5 billion. The UK's $5.1 billion in funding for 2023 was distributed across 409 deals, reflecting a 65% decrease from the previous year's $14.6 billion across 592 deals.
Innovate Finance highlights that this decline in funding aligns with trends observed in other major fintech markets, including the US, which experienced a 44% drop from 2022. An exception to this trend was the UAE, where investments surged by an impressive 92% compared to 2022. In the UK, female-led fintech companies attracted $536 million in 2023 across 59 deals, representing 10.5% of the country's total funding. The industry body also points out that "the UK received more investment in fintech than the next 28 European countries combined" throughout the year.
Janine Hirt, CEO of Innovate Finance, notes that despite economic challenges for fintech globally in 2023, the UK sector demonstrated resilience by maintaining its position as a global investment hub, ranking second only to the US and leading in Europe. Hirt sees a "clear opportunity" for UK fintechs to strengthen their presence in Asian markets, which collectively attracted "more combined investment than their European counterparts."
Innovate Finance compiled and summarized its report using data from PitchBook as of December 31, 2023.
SOURCE: Innovate Finance