UK open banking hits 7m users - (27/02)

UK open banking hits 7m users - (27/02)

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Funding πŸ’Έ

Highlights below of deals since the last post in the fintech space across the UK & Europe.

πŸ‡ͺπŸ‡Ί Deposit broker Raisin is seeing to raise €50m according to reports.

πŸ‡ͺπŸ‡Ί German corporate card platform Pliant raised a $28m Series A led by SBI.

πŸ‡ͺπŸ‡Ί Rent Now Pay Later provider Wilgo raised a €150k seed round.

πŸ‡ͺπŸ‡Ί Financial operating system for SMBs finway raised a €9.2m Series A led by Capital 49 and included Force Over Mass Capital, btov Partners and 10x Group.

πŸ‡¬πŸ‡§ Open Banking credit scorer DirectID raised a €9m round led by the investment arm of Ikea.

πŸ‡¬πŸ‡§ Auto fintech Carmoola raised a Β£8.5m Series A and secured a Β£95m debt facility from NatWest.

πŸ‡¬πŸ‡§ Carbon insurance company Kita raised a Β£4m round led by Octopus Ventures and included Insurtech Gateway, Hartree Partners, Climate VC and Carbon13.

πŸ‡¬πŸ‡§ Digital asset payment provider BCB Group raised a $20m convertible note.

πŸ‡¬πŸ‡§ Venture capital investment solution Sprout raised a $1m seed round.

🌍 Automated payments fintech Ledge raised a $9m seed round led by NEA, Vertex Ventures, FJ Labs and existing investors.

Challenger Banking πŸš€

πŸ‡ͺπŸ‡Ί Nordic challenger bank Lunar is to offer its SMB clients access to loans through a partnership with embedded lender Froda. Β In addition, Lunar is partnering with Visa to manage payments with Visa cards.

πŸ‡ͺπŸ‡Ί Neobank Bunq has reached profitability for the last quarter of 2022, with pre-tax profits of €2.3m.

πŸ‡ͺπŸ‡Ί Neobank Tomorrow increased earnings 3x to €5.5m in 2022 but still failed to make a profit after costs kept steady at €14.2m.

πŸ‡¬πŸ‡§ Tesco is reportedly in talks to sell its banking unit.

πŸ‡¬πŸ‡§ In a contrast to prevailing advice, Zopa is being encouraged by large investor Augmentum Fintech to go for growth ahead of its IPO.

πŸ‡¬πŸ‡§ Revolut is to have its 2021 accounts approved soon which would confirm its profitable. It is also to start rolling out credit cards to its two million Irish customers.

πŸ‡¬πŸ‡§ Chase is set to limit its cashback when its current rewards offer of 1% ends in April. Customers will get a maximum of Β£15 cashback per month after that.

πŸ‡¬πŸ‡§ Workplace pension provider Smart has reported AUM growth of nearly 120% over the past 12 months to Β£5bn. Β Smart is backed by JP Morgan and L&G.

πŸ‡¬πŸ‡§ Several investment banks have approached Monzo over a potential IPO in 2024 or 2025.

🌍 Robinhood reported a rebound in trading volume in January.

🌍 Cash App has hit 51m MAUs as its momentum continues.

Digital Assets β‚Ώ

🌍 The SEC has charged Terraform Labs and it's founder Do Kwon with fraud. It is alleged Kwon transferred Bitcoin worth millions to a Swiss bank account.

🌍 SBF is looking at facing stricter bail conditions on use of electronic devices and internet access. He is also facing four new criminal charges and has been subpoenaed to testify by Voyager creditors.

🌍 Coinbase founder Brian Armstrong has called claims by the SEC that crypto firms should come in and register with it, "fake". The company said it is poised to benefit from a more stringent regulatory environment in its Q4 2022 earnings call, which beat expectations. Its layer 2 chain Base had a rough launch.

🌍 Russia is preparing to launch a CBDC pilot with retail transactions.

🌍 The FSB has warned that a lot of the existing stablecoins would not pass risk management rules that they are working on around governance frameworks, redemption rights and stabilisation mechanisms.

🌍 Polygon Labs announced it is cutting its staff count by 20%.  MATIC, the native token of Polygon, dropped 6% on the news.

🌍 EToro has secured a money transmitter licence in New York.

🌍 Mastercard has partnered with Immersve to let customers in Australia and New Zealand to use their crypto directly from their web3 wallet anywhere Mastercard is accepted. Settlement is provided via USDC.

🌍 Binance is partnering with POS provider Ingenico to run a pilot for in-store crypto payment acceptance.

🌍 BlackRock is starting an ETF of companies exposed to the metaverse, despite the lack of interest in the space currently.

🌍 FTX Japan is set to resume crypto and fiat withdrawals shortly.

Traditional Banking 🏦

πŸ‡¬πŸ‡§ NatWest has done a U-turn on charging a Β£1.99 monthly fee for its prepaid kids debit card.

πŸ‡¬πŸ‡§ Co-Operative Bank is leading the race to acquire the Β£650m mortgage book of Sainsbury's.

🌍 Stripe is forming a fraud fighting partnership with US issuers to reduce fraud and boost authorisation rates.

🌍 Wells Fargo has launched a digital wealth management platform for customers. It also laid off hundreds of its mortgage staff after low volumes.

🌍 JP Morgan is restricting use of ChatGPT by it's employees

Fintech Infrastructure 🚧

πŸ‡ͺπŸ‡Ί The ECB is to review the digital transformations of banks after it found a number of shortcomings.

πŸ‡ͺπŸ‡Ί Stock exchange Euronext has made a €5.5bn bid for Allfunds, a B2B wealth platform.

πŸ‡¬πŸ‡§ The number of users for consumers and SMEs using open banking in the UK has reached 7 million.

🌍 Paid is rolling out is ID&V solution in Canada.

🌍 The Fed is going to focus on building fraud prevention measures into its FedNow system when it goes live

Payments πŸ’°

πŸ‡ͺπŸ‡Ί Klarna seems to be making headway in the US after announcing over 70% increase in GMV and is their largest market by revenue.

πŸ‡¬πŸ‡§ Payments firm Payoneer has been granted an EMI licence by the FCA. The happens at the same time that the FCA is set to implement stricter Consumer Duty rules that EMI firms will have to meet.

πŸ‡¬πŸ‡§ Spending data from UK Finance shows card spending, both credit and debit, were up in November 2022 YOY. Β Total spend for each rose over 5%. There was a significant rise in contactless payments as well.

πŸ‡¬πŸ‡§ Barclays data has shown an increase of 50% in the value of contactless payments, as the move to a Β£100 transaction limit is being embraced. Β Fastest growth group of contactless came from over 65s.

πŸ‡¬πŸ‡§ Complaints to the Financial Ombudsman relating to BNPL jumped by 36% in 2022, despite the lack of a mandate for oversight currently by the Ombudsman.

πŸ‡¬πŸ‡§ Mastercard and Visa are rumoured to be facing another lawsuit in the UK over Multilateral Interchange Fees.

πŸ‡¬πŸ‡§ Ecospend, the account-to-account payments provider for HMRC reported it processed Β£2.3bn of payments to HMRC, an increase of over 60% yoy.

🌍 Zelle Network reported a 26% increase in volumes in 2022, partly from an increase in participating FIs of 40% to over 1,800.

🌍 Stripe is partnering with advertising giant WPP to develop payment solutions for brands. The payment processor is also expected to process $1trn in volume this year. Stripe also announced its support for Tap to Pay on Android


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