BNPL Confusion
BNPL Confusion
Tweet of the week 🦉
Capco surveyed over 2,000 users in the UK with some surprising findings.
23% of those surveyed who had used BNPL in the past year were 65+, the highest of any age group
More than half of 18-34 year olds using BNPL missed a payment
62% say its making them spend more
52% want BNPL to be regulated and 45% want BNPL to be integrated with their current account or debit card.
57% of 18-34 year olds are unsure if BNPL is debt
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Recent News 📰
🇪🇺It was the EBAday 2020 conference at the end of last week with the topic “The Turning Point in Payments Transformation.”
🇺🇸 Pitchbook released its US VC Valuations report for Q3 2020 with a few noteworthy highlights
Increasing activity in late stage deals by non-traditionals
Slow down in the amount of down rounds after Q2 spike
Valuations in angel rounds tracked lower while ownership stakes at a 7yr high with median of 20%.
Funding 💸
🇪🇺 Clarity AI, an ESG investment platform has raised $15m from Deutsche Borse.
🇬🇧 Both JPMorgan and Lloyds have expressed interest in buying Starling Bank, which as reported two weeks ago was looking to raise £200m in funding. Is Starling struggling to raise?
🇬🇧 Primer, six months after raising a $4m seed round, has completed a £14m Series A led by new investor Accel with participation from Balderton, SpeedInvest, Seedcamp and RTP Global.
🇬🇧 London VC Firstminute Capital has announced its £87m second early stage fund with an impressive list of LPs.
🇬🇧 Embedded banking platform Weavr raised $4m from Anthemis, QED and Seedcamp.
🇬🇧 TransferGo, the remittance firm, has raised £4m from SVB’s UK branch to develop its RTP platform for consumers and businesses.
🇬🇧 Incuto, a bank platform for community-banks, raised a $2.28m seed round from Ascension Ventures, Mercia and Northstar Ventures.
🇺🇸 Stripe is looking to raise funds which could value it at $100bn.
🇺🇸 Marqeta is sizing up a $10bn IPO next year with Goldman Sachs and JP Morgan.
🇺🇸 Square has publicly announced its buying Credit Karma’s tax prep businesses for $50m. The divestment was part of Credit Karma’s $7.1bn sale to Intuit. For some interesting background, check out the long reads!
🇺🇸 HMBradley completed its $18.25m Series A led by Acrew Capital.
🇺🇸 Current completed a $131m Series C round led by Tiger Global and included existing investors QED, Wellington and Foundation Capital.
🇺🇸 Trust & Will raised $15m in funding from new lead investor Jackson Square Ventures.
🇺🇸 Productfy raised $2.35m seed round led by Point72 Ventures.
🇺🇸 Ellevest raised $12.2m from undisclosed investors.
Challenger Banking 🚀
🇬🇧 SME banking solution Cynergy Bank is partnering with Google Cloud and Wipro to provide a solution for customers who value human services blended with new banking tech.
🇺🇸 Chargebee and Pipe are partnering up to better help SaaS companies grow h/t Finledger.
🇺🇸 Challenger lender Oportun has applied for a national bank charter to allow it to offer more banking services, following in the footsteps of Varo Money and SoFi.
🇺🇸 Betterment is partnering with Dosh to give automatic cash back and personalised offers through their account.
🙌🏻 FATP Take - This is an interesting offering from Betterment as there are many services that provide cashback, rewards and card linked offers but there is still a lot of friction to claim and use them. More challenger banks should partner with these companies to automate their offerings. Drop is also in this space with a new rewards program.
Traditional Banking 🏦
🇪🇺 Credit Suisse is now offering APIs to counterparties with real-time access on status of their securities and FX transactions.
🇺🇸 HSBC is pondering selling its US retail operations as it increasingly looks to overhaul its entire business.
B2B Banking
🇬🇧 Visa has partnered with UK fintech Conferma Pay to launch B2B payments solutions, including virtual cards, to improve cashflow and eliminate manual processes
Fintech Infrastructure 🚧
🇪🇺 Solarisbank, the German BaaS platform has migrated its technology to the cloud with AWS.
🇺🇸 Plaid has partnered with Jack Henry to enable Plaid Exchange, which allows financial institutions an open platform for data connectivity, on their Banno Digital Platform.
Payments 💰
🇪🇺 Finland’s OP Financial, the largest financial services group in the country, is piloting fingerprint cards with a local supplier. Currently 60% of transactions with OP cards are contactless, one of the highest rates in the West.
🇪🇺 Wordline and Nets have become shareholders in the European Payments Initiative, a rival to Mastercard and Visa backed by 16 Eurozone banks.
🇬🇧 According to UK Finance, 62% of debit card and 45% of credit card transactions were contactless in August.
Regulatory Corner 🔎
🇺🇸 JPMorgan Chase is paying a $250m fine for poor risk management and conflicts of interest in its advisory business.
Longer reads 📜
77% of Americans are anxious about their financial situation - CNBC
🙌🏻 FATP Take - Another report demonstrating the challenges of financial wellbeing. I wrote how employers can step up here.
Why financial literacy matters more than ever - Patrick Jenkins, FT
PayPal is winning the $24bn BNPL battle - Ron Shevlin, Forbes
The world’s best bureaucrat - New York Magazine
Inside TurboTax’s 20-Year Fight to Stop Americans From Filing Their Taxes for Free - Justin Elliott and Paul Kiel, ProPublica
Startups of the Week ⭐🇺🇸🇬🇧🇪🇺
You can check out last month’s featured startups here.
🙋If you are working on any exciting fintech startups, I would love to connect with you so drop me a message.
🇺🇸 Braid is a group spending platform which allows users to create flexible group accounts for trips, clubs, families and housemates. The app allows you to set permissions and controls like spending limits and withdraw limits with transparency for everyone in the group. This is a competitive space with most people using Venmo/Cash App for money transfers and Splitwise for bill tracking. The solution has to be super slick to get users to change their current behaviour whereby one person foots the bill and the rest pay back later.
Braid is a new type of fintech that is building a layer on top of bank accounts to provide additional value now that basic banking has largely been democratised. I believe a lot more of these layers will come to market in the near future.
Founder Amanda Peyton has raised $8m at a $33m post and is already generating revenue.
🇺🇸 Otomo is an automated personal money management platform that provides a personalised solution to banks and fintechs. It aims to increase user engagement by 55% with its hyper-personalised money plans and goals. It is currently in beta testing.
Otomo embeds itself in existing platforms to augment functionality banks and fintechs already have and doesn’t touch the money management themselves but act as founder Khellar Crawford says “air traffic control”. Otomo has patents in the space to protect its functionality.
Founder Khellar Crawford has raised $300k to date, with the last round at a $4.7m post money valuation.
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Michael