To become a global fintech player, locate your company in San Francisco and Africa.That’s the approach of payments company Flutterwave, digital lending startup Mines, and mobile-money venture Chipper Cash—Africa-founded ventures that maintain headquarters in San Francisco and operations in Africa to tap the best of both worlds in VC, developers, clients, and the frontier of digital finance.This arrangement wasn’t exactly coordinated across the ventures, but TechCrunch coverage picked up the trend and some common motives among these rising fintech firms.Founded in 2016 by Nigerians Iyinoluwa Aboyeji and Olugbenga Agboola, Flutterwave has positioned itself as a global B2B payments solutions platform for companies in Africa to pay other companies on the continent and abroad.Clients can tap its APIs and work with Flutterwave developers to customize payments applications.Existing customers include Uber, Facebook, Booking.com and African e-commerce unicorn Jumia.com.
Money transfer service Transferwise today announced the completion of a $292m (£230m) share sale, making it Europe’s most valuable fintech company at $3.5bn.Read more: UK named world's top fintech hub as startups rake in £4.5bnExisting investors Andreessen Horowitz and Baillie Gifford expanded their holdings in Transferwise, while investment was also provided from funds managed by Black Rock.The funding round was led by growth capital investors Lead Edge Capital, Lone Pine Capital and Vitruvian Partners, Transferwise said.To date, the company has raised $689m in primary and secondary funding as it resists going public.Transferwise, founded by Estonians Taavet Hinrikus and Kristo Kaarmann in 2011, now serves 5m customers worldwide, processing £4bn every month.
What happened: HSBC is planning to add more than 1,000 new employees this year at its China technology development centers in Guangzhou, Shanghai, and Xi’an.The technology centers, which currently employ around 7,000, have become increasingly crucial to HSBC’s China and fintech strategy.The bank has been using its China centers to develop risk and fraud management technologies, mobile apps, and other technology products for its global markets.The European bank said it will invest up to $3.5 billion in its group technology operations annually over the next few years.Why it’s important: The move comes as HSBC expands its operations in Asia, and more specifically, China.The bank is looking to ramp up its technology capabilities and offerings to improve its profits and has been eyeing opportunities in China, where fintech development and adoption is considered ahead of the curve.
“The US market is vast.Over the past few years, the fintech industry has started to prove that it can be a driving force to disrupt the financial services sector.Banks now have serious competition from tech-forward lending companies, transfer startups, personal finance and investment apps, and non-traditional banks.Europe has led the charge in bridging the gap between older banking practices and rapidly advancing consumer technology.When compared to the US, the difference is vast – the same report estimates that US fintechs have only captured just over 3% of the new revenue entering the marketplace since 2005.The Power of Progressive Government
Much of the energy and excitement in the world of the blockchain has focused on the cryptocurrencies, their skyrocketing valuations, and their astonishing collapses.Most of the enterprise world has sat quietly on the sidelines, popping some corn and settling back to enjoy the show.That is slowly changing, though, as companies are starting to tip their toes into the turbulent waters.Some are tempted by the slings and arrows of outrageous fortune because they want to accept the cryptocurrency just like the dollar or the euro.Others are more interested in the rock-solid authority offered by the crypto-enhanced blockchain and they want to use the hardcore math and science to bolster their own internal practices.They and their customers want some of the assurance offered by the battle-tested mechanisms.
London fintech startup Wagestream has today closed a £15m series A funding round, co-led by venture capital investors Balderton Capital and Northzone.The round was raised in addition to a credit facility of up to £25m Shawbrook Bank.At £40m, Wagestream chief executive Peter Briffett said the total amount raised marks the largest single social impact investment to date in the UK.The flexible wage app allows staff to draw down a percentage of their earned wages on any day of the month for a flat fee of £1.75, with no loan or interest charge involved.Businesses already on its platform include Rentokil Initial, Hackney Council and David Lloyd Clubs.London-based Balderton has previously backed the likes of Revolut, Citymapper and Yoox Net-A-Porter, while Northzone was an early investor in Spotify and iZettle.
Digital banking darling Monzo's current account is set to surpass 2m customers today, as it races to catch up with London rival Revolut.The two fintech startups have been locked in an intense race to command market share in the nascent mobile banking sector, as well as to expand overseas.Read more: Monzo to roll out business bank accounts in revenue shake-upRevolut has more than 4m users, but its accounts are currently available across Europe and Australia while Monzo is limited to the UK.Monzo said the figure means three per cent of the UK is now signed up to the bank, less than 18 months since it first launched its current account in October 2017.More than £10.7bn has been spent through Monzo since the bank’s founding in 2015, with £2.9m sent between Monzo users every day.
Tencent announced first quarter 2019 profits of RMB 27.9 billion ($4 billion), posting 16% growth year on year driven by strong earnings from the company’s fintech and cloud businesses.However, revenue growth was the slowest on record as the titan struggles to recoup losses from increased gaming regulations in China.Tencent grew its revenue 16% year on year to RMB 85.5 billion in the first quarter.RMB 21.8 billion came from fintech and other businesses including payment services and cloud computing, which posted strong 44% year-on-year growth.Fintech and cloud revenue momentum helped offset a disastrous period for games due to increased regulatory oversight.The company released only one new mobile title—Perfect World Mobile—in the first quarter.
Alibaba Group’s affiliate online payment service company Ant Financial has secured a virtual bank license from Hong Kong authorities, according to a statement.The largest fintech company in the world offers a full suite of products to offer digital financial services to individuals, as well as small and micro enterprises.Ant Financial also currently operates Alipay, a payment and lifestyle platform that currently serves over 1 billion users worldwide with its regional e-wallet partners.Looking forward, the company said it plans to work with various sectors in Hong Kong to further spur the development of fintech and financial inclusion in the country.To be eligible for a license, the country’s authorities require digital banks to have a minimum capital of roughly US$38.2 million.In February, it was reported that the Hong Kong SAR Government and the Hong Kong Monetary Authority were gearing up to issue digital banking licenses to six Chinese tech firms, which included Ant Financial, internet and gaming group Tencent, smartphone maker Xiaomi, and online insurer Zhong An.
Global accelerator Startupbootcamp announced the final 10 participants for its specialized FinTech Accelerator program.The fintech firms, which come from Australia, India, Hong Kong, Singapore, Taiwan, Myanmar, the UK, and the US, will each receive about US$17,000 in investment and free co-working space at the organization’s offices in Australia, as well as access to an international network of partners, mentors, and investors.Startupbootcamp will also provide them with roughly US$700,000 worth of partner deals, which includes support from Australia-based tech services company DiUS, boutique firm KHQ Lawyers, and Pitcher Partners, an association of independent firms.The accelerator is also backed by its other major sponsors National Australia Bank, healthcare group Bupa, professional services network Deloitte, consulting and technology outsourcing services provider Capgemini, and Amazon Web Services.The startups selected from the program include:ZScore Technologies, an AI-powered platform that enables organizations to use data profiling for understanding and extracting value from their data
Hong Kong-based insurance tech startup OneDegree said it has extended the second tranche of its series A and has now raised more than US$30 million.Fintech-focused BitRock Capital, which is backed by warehouse operator GLP, was the lead investor in the A2 round, according to a company statement.Cyberport Macro Fund, Cathay Venture, and other existing investors also participated in the extension.The company said it would use the proceeds to scale its digital platform faster, launch new products in Hong Kong, and scout for growth opportunities as part of the “Greater Bay Area” initiative.Launched earlier this year by China, the “Greater Bay Area” initiative is an attempt to connect Hong Kong, Macau, and nine other cities in southern China through infrastructure projects and boost trade in the region.
Indonesian sharia-compliant peer-to-peer (P2P) platform Alami secured an undisclosed amount of funding in a pre-seed round led by Singapore-based venture capital firm Tryb.From left: Alami founder and CEO Dima Djani and Tryb principal Herston Powers at Alami’s soft launch event / Photo credit: TrybAlami, which recently obtained a P2P registration from Indonesia’s Financial Services Authority (OJK), operates a platform for Islamic financing.It works with a number of partners, including sharia banks, to facilitate invoice financing for small and medium-sized enterprises.Sharia-compliant financing, unlike conventional lending, does not generate income from interest as it is prohibited by Islamic law.Sharia-compliant institutions instead rely on profit and risk sharing to get returns.
Money management chatbot Plum has raised a fresh $4.5m (£3.45m) in funding to bring it to a total raise of $6.3m, it confirmed today.Read more: Former HSBC trader's fintech startup raises £3.8m from the crowdVC outfit Venture Friends, along with the European Bank for Reconstruction and Development (EBRD), led the funding round for the fintech startup.Plum also revealed its user base has grown a huge 433 per cent in just one year - from 75,000 users in 2018 to 400,000 this year - as it launches on iOS today.The chatbot app is also due to launch on Android, and is already available on Facebook Messenger.Its chatbot advises users on investing anything from as little as £1 in a range of stocks including tech, emerging markets and ethical companies.
Dozens, a challenger banking startup founded by a former trader from HSBC, closed a crowdfunding round of more than £3.8m on Seedrs yesterday.The firm had initially set a target of £3.5m, but exceeded that amount with more than 2,150 investors in 42 countries.Dozens offers a current account and savings and investment tools to reward users for saving instead of spending.The round takes the startup’s total funding to £10m.The funding will be used to power further growth initiatives, new product development, such as business banking and child accounts, and the first phase of its banking license application.Dozens is currently authorised by the Financial Conduct Authority on an e-money licence and a Mifid investment license, allowing the platform to offer proprietary financial products.
The chancellor Philip Hammond has reassured business leaders that the UK’s fintech sector will still have access to talent from across the world after Brexit.Hammond called on the UK to strengthen its dominance of the European fintech industry and warned against complacency.Read more: UK fintech must have ambitions to challenge China, LSE boss saysIt comes as London looks set to catch world leader San Francisco in terms of the number of fintech unicorns it houses.Speaking at the Innovate Finance global summit in the City, the chancellor also announced a new digital marketplace - FinTech Alliance - to provide access to firms, investors, regulatory updates and connect employers with employees.He attempted to reassure business leaders that the fintech sector will still have access to the necessary skills and talent after Brexit.
Investments in Asian fintech companies fell below US$1 billion per quarter for the first time in over a year as China tightened regulations on online lenders, according to market intelligence firm CB Insights.Funding for fintech companies fell 67% to US$875 million in Q1 2019 compared with the last quarter, despite more companies finding investors, the report showed.Chinese regulators cracked down on online lenders after the industry witnessed a string of frauds and bankruptcies.In February, Chinese police have investigated 380 online lenders and frozen US$1.5 billion in assets as part of their regulatory efforts.According to the CB Insights report, investors poured US$286 million into Indian fintech companies across 29 deals in Q1 2019, narrowly beating China as the top Asian fintech market.Chinese fintech companies raised US$192.1 million in funding across 29 deals over the period, down from US$1.83 billion last quarter.
Our capital is currently hosting UK Fintech Week, an opportunity to showcase and celebrate the businesses transforming our best export: financial services.On Crowdcube, the crowdfunding platform I work for, there are now over 67,000 investors who own shares of fintech companies, and almost 20,000 of them are in London and the South East.They are customers, owners and champions who have put money behind the companies constantly improving finance.And our capital remains the testbed for the titans of tomorrow.Last month, VC firm GP Bullhound predicted that the UK will be home to 25 percent of the billion-dollar companies Europe will see in the next few years.Many tipped to enter that category are fintech firms: the likes of Starling Bank, Lendinvest, Onfido and Callsign.
Divvy has raised $200 million in venture capital as the Utah-based fintech continues to grapple with its rapid growth rate.Founded in 2016, Divvy’s automated expense reporting system went live in early 2018.From there, adoption has exploded and caused venture capitalists to swoon.The company raised $10.5 million in May 2018, then $35 million just two months later.“This past year has been a bit of a rollercoaster,” said Divvy CEO and cofounder Blake Murray.“But our vision is still to really be the financial nervous system for every company.”
China’s massive fintech industry took a beating in recent months as the government continued to wind down online lending nationwide, rattling investor confidence.Funding for fintech startups shrank 87.6 percent year-over-year to $192.1 million during the first quarter of 2019, a new report from data provider CB Insights shows.Both countries clocked in 29 fintech deals, suggesting a cooling investor sentiment in China which saw its height of 76 deals just three quarters ago.Over the past few years, China has rolled out a flurry of measures to rein in financial risks arising from its fledgling online lending industry.Peer-to-peer lending, which matches an individual looking for a loan with someone looking to invest, has been the top target in a wave of government crackdowns.This kind of service offers credit to unbanked individuals who cannot otherwise get loans in a country without a mature unified credit system.
The UK’s fintech startups are set to get a boost from the government towards expansion across borders, international trade secretary Liam Fox announced yesterday.Building on the so-called fintech bridge agreements signed by the UK and other nations in recent years, a cohort of startups have been selected for two pilot programmes that will provide them with support from government bodies and regulators.Read more: UK fintech must have ambitions to challenge China, LSE boss saysThe young companies include familiar names such as Transferwise and Seedrs, as well as smaller firms including Truelayer, Complyadvantage and Smart Pension.The 2019 programmes will run in for ten months, in partnership with the governments of Australia and Hong Kong.Other fintech bridge agreements have previously been established with China, Singapore and South Korea.