November 18 , 2015
The current state of fintech: 10 things you need to know
In her article ’10 Things You Need to Know About the Current State of Fintech’, Sarah Gill of Pivotl says fintech investment isn’t just booming, it’s getting more adventurous, with this week seeing venture capital veteran Kleiner Perkins making its first investment in a bitcoin startup with Align Commerce. Recent big funding rounds include online lending firm Earnest, which picked up U.S.D275m, as its backers place a big bet on the opportunity for startups to service people traditionally unable to access financial services. In London Ebury just picked up U.S.D83m to help businesses manage their financial services international payments. Meanwhile, Square prepares to price its shares and Apple Pay launches in Canada. Here are the top 10 fintech stories to know right now.
Gill’s top ten include:
1. London Startup Ebury Scores U.S.D83m For International Payment
In yet another significant fintech investment for London, Ebury has picked up U.S.D83m in funding to help mid-sized businesses manage their finances internationally. The firm helps businesses collect money from overseas customers, transfer cash between subsidiaries in different countries and manage currency exposure. Historically out of the reach of smaller businesses and thus limiting their ability to scale, Ebury is part of a new generation of fintech companies offering financial services to those poorly serviced by the status quo.
Funding comes from Virtuvian Partners and previous backer 83 North, bringing total funding to U.S.D110m. Founded in 2009, it says it’s “helping” 10,000 customers in Europe, with half of those in the UK. It will use the case to fund further expansion in Europe and to push into the U.S. early next year.
2. Kleiner Perkins Makes First Bitcoin Investment
Kleiner Perkins is the latest to throw its weight behind bitcoin, leading a U.S.D12.5m round in Align Commerce, which uses the technology for international B2B payments. International money transfer remains tedious, expensive and complex for business and many believe bitcoin, or rather the underlying blockchain technology that underpins it, has the answer. Align’s solution uses blockchain and an encrypted data rail alongside bank and treasury channels.
3. Online Lending Continues To Flourish
Investors continue to make big bets on the future of online lending, with San Francisco’s Earnest’s picking up U.S.D275m in fresh funding this week. Coming not long after SoFi’s U.S.D1bn from Softbank, it’s clear that backers see a big and untapped opportunity in the disruption of lending by fintech companies who are offering financial services to people locked out of traditional financing.
4. Regulatory Issues Biggest Impediment To Success, Say Fintech Businesses
What’s the number one issue holding back fintech? Regulation, according to a Silicon Valley Bank survey of 101 founders and investors in the financial tech space at the Fintech Mashup event in New York. Some 43 per cent of respondents named regulatory issues as the biggest hurdle, followed by corporate reticence in adopting new technology with 24 per cent and changing consumer behaviour with 18 per cent. Access to funding, as highlighted by some of the deals listed above, appears to be less of a concern with 15 per cent naming this as their main impediment.
5. Apple Pay Launches In Canada
Apple Pay is now live in Canada, but is currently only available to American Express customers. The firm is believed to be in talks with Canadian banks to offer the services to their customers. Retailers where Canadians can use the service include McDonalds and Staples. This means Apple Pay is now active in the U.S., UK and Canada with countries like Australia reported to be next in line.
6. Square To Set IPO Price Today
U.S. payments startup Square will price shares for its public offering later today in one of the most highly anticipated IPOs for some time. That’s partially because the IPO market has been quiet lately of course, but also because many are keen to see how well the fintech company performs under the glare of the public markets. The firm set its share range for between U.S.D11 and U.S.D13 per share valuing it at U.S.D4.2bn – lower than its valuation after its last fundraise.
7. Western Union Partners With WeChat
International money transfer giant Western Union is partnering with Chinese messaging app WeChat to enable users in the U.S. to send money to more than 200 countries. The deal highlights Western Union’s ambitions to work more closely with tech companies as the foreign exchange industry becomes filled with more competitors.
8. 5 Most-Interesting Companies At Startupbootcamp Fintech’s Demo Day
Didn’t make it down to Startupbootcamp Fintech’s demo day last week? No matter. Check out our round up of the most compelling pitches from the day. Startupbootcamp Fintech, which also has operations in Singapore has just launched a new program in New York.
9. Rakuten’s New Fintech Fund
Meanwhile there’s more good news for European fintech companies looking for funding with news Japan’s Rakuten is launching a U.S.D100m fintech fund that will target mid-stage financial tech companies. It will focus on the U.S. and Europe.
10. Carl Icahn Swaps eBay Stake For PayPal
Now that PayPal is an independent company, activist investor Carl Icahn has exchanged his shares in former parent eBay for the same number of shares in the payments company. Icahn had been campaigning for the split last year.