Fintech Highlights - 11/21/2023
Fintech companies have a strong Q3. Klarna launches new products. Defacto raises a round. Here's what we've been watching this week 👇
Pinned to the Top
Last week - we updated you on Klarna's positive earnings for Q3. Well, Affirm had a nice quarter too. And those two are not the only ones with good news.
- Dave’s third-quarter net loss improved 47% quarter over quarter, while monthly transacting members increased 6% to 1.9 million.
- Flywire’s third-quarter revenue increased 29.5% year over year, with CEO Mike Massaro saying in a statement that the company “generated our highest quarter of revenue and adjusted EBITDA, ever.”
- Payoneer reported record revenue of $208 million for the quarter and experienced 5% active ideal customer profiles growth year over year.
- Over at Robinhood, the investment company reported total net revenue increased 29% year over year to $467 million as customer subscriptions grew to over 1.3 million, with 100,000 added just in the third quarter.
Despite a difficult funding environment and the financial sector taking a beating from investors - there are some very positive signs that consumer's financial health is having an impact on those that accomodated their needs.
The BFD
Klarna, the above mentioned Buy Now, Pay Later giant is expanding its offerings to launch a suite of growth tools to help retailers and creators with audience engagement.
Creator Stores will support creators with the tools to create their digital storefront on the Klarna website, while Ads Manager creates a personalised shopping experience for customers who choose to share their info with Klarna.
Why this is the BFD: These new services are a step in a different direction for Klarna that is known, almost exclusively, for their BNPL credit products.Ads Manager is already live in the US, UK, and Sweden, with plans to expand globally in the near future. Both this and Creator Stores leverages Klarna’s website and customer data to reinvent itself as, in their own words, a “global shopping assistant for consumers” and a “growth partner for retail partners”.
US retailers running ads of Klarna are reportedly seeing clickthrough rates up to 25 times higher than the industry average.
What's next? In recent years, Klarna has made headlines for all the wrong reasons, such as their 85% drop in valuation, laying off 10% of their workforce, investor problems, not to mention their synonymity with BNPL, which is not without its critics.
However, this move signals a strategic shift within the business, and a significant one at that.
Branching out from simply providing credit, to supporting the entire end-to-end shopping experience, from virtual storefronts for creators to personalised recommendations for consumers, has the potential to be transformational for Klarna.
If the apparent success of their ad clickthroughs in the US are anything to go by, their gamble seems to be paying off so far…
M&A
Cardeo, a London-based credit card manager platform, has shut down. It had raised around $4m from firms like JamJar Investments. More here ->
F2i is in talks to buy around €800m of Italian assets from payments firm Nexi (Milan: NEXI), per Bloomberg. More here ->
Advent International agreed to buy myPOS, a British payment services firm, for more than $500m. More here ->
Nuvei (Nasdaq: NVEI) agreed to acquire Australian payments processor Till Payments for A$47m, per the Australian Financial Review. Till had been valued at A$500m in March, and was backed by such firms as Silva Fortune, Avenir Growth Capital, SNV Global, Woodson Capital Management, Akuna Capital and Regal Partners. More here ->
Embedded Fintech
Defacto, a Paris-based embedded B2B lending platform, raised €10m in Series A extension funding from Citi Ventures and others. Defacto provides loans and credit to small companies through an API-based product. It enables third parties such as marketplaces, ecommerce platforms and others to embed its products directly in their own products, integrating seamlessly. More here ->
Fintech
Tanda, a collective savings startup, raised $4.5m in seed funding. Tanda offers a peer-to-peer savings and lending network to small businesses as a way to retain employees and reduce turnover. More here ->
Era, a personal finance management startup, raised $3.1m in seed funding. More here ->
Imprint, a New York-based co-branded credit card fintech, raised $75m in Series B funding. Imprint partners "with America’s great brands" to design, launch, and manage co-branded credit card programs that are worthy of modern customers. More here ->
Apiture, a Wilmington, N.C.-based provider of digital banking solutions, raised $10m led by T. Rowe Price. Through Apiture's API-first strategy, clients can maximize the capabilities of the platform while preserving a seamless user experience. More here ->
Tenet, a New York-based EV financing startup, raised $10m in Series A funding. It says it wants to “make the climate-positive choice the smart financial choice,” by making the upfront costs of EV ownership easier to swallow so more people can get into EVs. More here ->
Refine Intelligence, an Israeli provider of anti-money laundering software for financial institutions, raised $13m in seed funding, per Axios Pro. More here ->
Diesta, a London-based payments insurance payment platform, raised $2m in seed funding. The funding will allow Diesta to scale a premium payments platform that could save insurance companies billions every year. More here ->
Monument Bank, a British digital challenger bank, raised £40m in Series B funding, and reportedly is seeking to raise an additional £100m in Series C funding. More here ->
LXA, a Singaporean mortgage services startup, raised $10m in seed funding. LXA is a fintech company that is unlocking non-depository capital for the Asian mortgage market. The company’s technology platform revolutionizes the mortgage industry by streamlining loan origination, processing, underwriting, and servicing. More here ->
Solvimon, a Dutch billing platform, raised €9m. The platform allows customers to pay based on consumption or a combination of usage and traditional subscriptions. More here ->
Fnality International, a London-based blockchain payments firm, raised £77.7m. Founded in 2019, Fnality is looking to build tokenised versions of currencies backed by funds held in central banks. Among the intended benefits of Fnality’s blockchain-based system is the simplification of cross-currency payments. More here ->
EduFi, a Pakistani student loan startup, raised $6.1m in pre-seed funding. EduFi has launched the digital student loan platform in Pakistan, on a mission "to empower more students to achieve their academic pursuits." More here ->
Blockchain.com, a London-based digital assets platform, raised $110m in a first close of its Series E round. More here ->
Lynx, a Spanish fraud and financial crime prevention startup, raised €17m in Series A funding. More here ->
CondoConta, a Brazilian fintech focused on condominiums, raised $14.6m in Series A funding. The company expects to receive requests this year worth 75mn reais (US$14mn) from residential and commercial condominiums to finance PV solar power installations. More here ->
Viably, described as a “leading provider of innovative financial solutions for ecommerce”, has successfully secured a $50m debt financing facility from renowned global credit investment manager Viola Credit. More here ->
Preczn, described as the leading financial services Command Center that specialises in vertical SaaS platforms, has proudly announced its latest successful funding round. More here ->
Crypto
CFX Labs, a Chicago-based stablecoin settlement network, raised $9.5m in seed funding. Remittances are one of the most compelling use cases for stablecoins, offering fast, non-stop settlements and cheap transactions using blockchains as payment rail. More here ->
Taproot Wizards, a bitcoin-focused digital collectibles project, raised $7.5m led by Standard Crypto. More here ->
Insuretech
CoverSelf, an SF-based platform for health care claims and payment integrity, raised $8.2m in seed funding. CoverSelf is building a cloud-native platform to improve payment integrity by being more transparent and customizable than legacy systems. More here ->
Pineapple, a South African insurtech, raised $22m in Series B funding. It plans to use the funds to further expand into the car insurance space after it claims to have grown by 200% in the last six months. More here ->
Proptech
Pippin Title, a New York-based title tech and mortgage service information provider, raised $8m in seed funding. Pippin Title offers comprehensive title search reports across all 50 states. More here ->
Dwellsy, a Los Altos, Calif.-based housing rentals marketplace, raised $11.5m in seed funding. More here ->
From the Stash
Open banking: Catalyst for innovation, competition - Open banking regulation is in the works — finally. The Consumer Financial Protection Bureau (CFPB) announced in October 2022 a plan to propose a rule in 2023 requiring financial institutions to share consumer data upon request by the consumer. One year later, on Oct. 19, 2023, the bureau unveiled its Personal Financial Data Rights proposal. More here ->
EverBank selects FIS’ Digital One banking platform - EverBank, formerly TIAA Bank, is converting its consumer digital banking operations to FIS’ Digital One to kick off 2024. TIAA completed the sale of its subsidiary TIAA Bank to private investors in August and the bank has now rebranded as EverBank, according to an EverBank release. More here ->
ING explores gen AI for coding, CX - Netherlands-based ING Bank has identified AI and analytics as a critical priority as digital usership ticked up in the third quarter. The $967 billion bank is looking to implement generative AI for coding and within its contact centers, Bahadir Yilmaz, chief analytics officer at ING, told Bank Automation News. More here ->
How KeyBank leverages third-party vendors for AI - KeyBank is investing in AI throughout its operations and looking to third-party vendors for coding and compliance assistance. The $190 billion bank is investing in third-party solutions that utilize AI to transform complex code into low-code applications, Robbi Armstrong, vice president and group product manager of conversational AI at KeyBank, told Bank Automation News More here ->
Fighting fraudulent transactions with Mastercard’s Brighterion - Financial institutions are using AI to mitigate fraud as fraudsters keep pace with evolving technology. Seventy-four of the top banks in the United States are looking to Brighterion’s Transaction Fraud Monitoring solution, owned by Mastercard, to flag transaction fraud, Amyn Dhala, chief product officer at Brighterion, said last week during a webinar More here ->
Digital P&C insurtech Kin has reported a remarkable 63% year-over-year increase in Gross Written Premium - reaching a milestone of over $270 million in 2023. More here ->
More:
Whitney McDonald
Tristan Greene
Guadalupe Ibañez
Anna Hrushka
Reports / Webinars
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The 2023 Fintech Effect: Reaching the next wave of fintech consumers
Plai's final Tech Talk of the year happens Wednesday, December 6 at
11:00 am PT / 2:00 pm ET. In this edition the Plaid team will discuss the biggest takeaways from the 2023 Fintech Effect report. Learn what fintechs need to do to get ahead of the latest trends, create lifetime customers, and grow their business. Whether you’re building a product roadmap, looking to build trust in the age of AI, or drive revenue with online payments—this conversation is for you.
Powerful tools for revenue growth
Goldman Sachs Growth Equity recently published a report that provides a qualitative benchmarking of 13 software companies at varying stages of offering financial services. This report is highly recommended for software platform leaders interested in learning what drives differential outcomes in embedding financial services.
Embedded finance: Creating the everywhere, everyday bank
Embedded finance is a key strategy for financial institutions as consumers demand the integration of financial products within organizations that provide nonfinancial services. In fact, 70% of banking executives have named embedded finance as a core or complementary business strategy, according to the report “Embedded finance: Creating the everywhere, everyday bank,” by IBM and Banking Industry Architecture Network (BIAN).
Partner with customers and their data for better experiences
According to The Connected Financial Services Report, your customers are willing to partner with you for better experiences. But 78% of the 6,000+ individuals surveyed said they would switch providers if they felt their data was mishandled. Better data, along with artificial intelligence, can help you automate routine needs and personalize experiences when it matters.
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