This Week in Fintech UK & Europe (26/07)

Hello TWIF UK & Europe friends,

There was an interesting development in the US with the crypto cross-border focused Stellar Foundation looking to take over money transfer service MoneyGram. One of the first instances I can think where a fintech acquires a legacy player but I agree with Nik ^^. Whilst we are far off these types of developments in Europe, it could be a sign of things to come as fintechs raise larger and larger rounds and look to put the money to good use.

Please find another week of fintech financings and exits below and don’t forget to subscribe to the other TWIF newsletter’s below!


Editor’s Note: If you’re an early-stage startup founder raising equity or debt, I may be able to help - reach out to michael@thisweekinfintech.com.


Tweet of the week 🦉


Funding 💸

There were 14 deals in the fintech space across the UK and Europe with a total investment of $1.1bn. Some highlights are below.

🇪🇺 Solarisbank raised €160m at a €1.36bn valuation in a round from Decisive Capital and existing investors.

🇪🇺 Spendesk raises a €100m Series C led by General Atlantic and included Index Ventures and Eight Roads.

🇪🇺 WhenThen raised a $6m seed round led by Stride.VC and included Cavalry Ventures.

🇬🇧 Monzo’s COO has her sights set on an IPO according to a recent interview, as they look to cash in on a flood of money for UK fintechs. This is as reports that Monzo’s biggest investor, Passion Capital, reduced its stake from 40% to 23%.

🇬🇧 Yapily raised a $51m Series B led by Sapphire Ventures with participation from Lakestar and HV Capital.

🇬🇧 Soldo raised a $180m Series C led by Temasek with participation from Citi Ventures, Accel, Battery Ventures, Dawn Capital and SVB.

🇬🇧 Clim8 raised £2.85m from 1,800 investors via Crowdcube.

🇬🇧 Zilch extended its Series B by $110m with debt and equity from Goldman Sachs and DMGT, the venture arm of Daily Mail.

🇬🇧 Percent raised a $5m round led by Morpheus Ventures with participation from Nationwide’s NBSVentures.

🇬🇧 Ntropy raised a $3.2m seed round led by QED with participation from January Ventures.

🇬🇧 Index Ventures raised $3.1bn across three new funds, $900m early stage, $2bn growth stage and $200m seed stage.

🌍 FTX Trading raised a $900m Series B from Softbank, Sequoia, Third Point, Lightspeed, Paradigm, Altimeter, Coinbase Ventures and more. Binance exited its position as a previous investor, with FTX buying back its shares.

Challenger Banking 🚀

🇪🇺 Klarna is acquiring Stocard, a digital wallet to store your loyalty cards, for €110m.

🇬🇧 Revolut is launching “Stays”, a travel booking feature to compete with Booking.com and Expedia, in its first move outside of financial services. It will spend £70m on offering users 10% cashback on bookings. It also signed a deal with Equifax to be its data and analytics partner in the UK.

  • 🙌🏻 TWIF Take - Not too surprising given the roots of Revolut were as an FX card and the companies push to become a “super app”. Although travel is low frequency, it accounts for some of consumer’s largest expenditures. Pairing with more high frequency products/services would be interesting!

🇬🇧 Wise reported its Q1 financial year results (which is actually Q2 2021, as Wise fiscal year ends in March), with revenue +43% yoy to £123.5m. It reduced the average price by 0.02% to 0.67%. Volumes were +54% to £16.4bn but its take rate declined to 0.75% (from 0.81%).

🇬🇧 Starling Bank also reported Q1 2021 earnings, with revenues 4x yoy to £42.8m for the quarter and customer deposits nearly £6.8bn, 1.8m retail and 370k SME accounts. Revenue comes 62% from NIM and 38% from fees & other.

🇬🇧 BridgeWeave launched InvestorAI, an investment app to give self-directed traders access to the same sorts of market signals that institutions take advantage of.

Digital Assets ₿

🇪🇺 The EU is cracking down further on AML in crypto by bringing the whole crypto sector under its AML/CFT rules, making them do due diligence on their customers to ensure full traceability. Anonymous crypto asset wallets will be prohibited.

🇪🇺 Spain’s Smart Money project, a collaboration between Iberpay and 16 Spanish banks to trial different designs for a digital euro have completed, indicating a preferences for a wholesale model and a dual functioning system of account-based (current bank money) and token-based (digital cash) in the same system.

🇬🇧 Natwest joined the list of UK banks to cut ties to Binance after Starling’s Anne Boden gave caution to some exchanges.

  • 🙌🏻 TWIF Take -Luckily for me Monzo is not one of them as I was able to buy some AXS this week on Binance after reading Packy McCormick’s post about them :)

🌍 S&P launched the “S&P Digital Market Indices”, starting with an index each for Bitcoin, Ethereum and a MegaCap Index of digital assets.

🌍 Mastercard is partnering with Circle, Evolve and Paxos to give its bank and crypto customers the ability to offer a card to spend digital assets by enabling USDC directly on its network.

🌍 BlockFi received a “cease and desist” letter from New Jersey’s acting AG in relation to its interest account operations. Later in the week, Alabama and Texas also had the company in its crosshairs. This is amongst rumours of a plan to go public in 18 months and a new fundraise in the works. Preston Byrne has a great breakdown.

🌍 MakerDAO is turning over the operations of its Maker Foundation to its DAO, part of a long promised plan by founder Rune Christensen.

🌍 Following Binance attracting regulatory scrutiny for its tokenised stock product, Uniswap has stopped its synthetic stock and derivative products citing “evolving regulatory landscape”.

Traditional Banking 🏦

🇪🇺 Danske Bank’s Northern Ireland branch has launched a carbon neutral mortgage in the UK.

🇬🇧 Nationwide is partnering with Openwrks, an open banking provider, to help customers who find themselves in debt, giving them a holistic picture of their financial situation before they meet with a collections team.

🇬🇧 Santander launched a cash management platform to give its corporate customers a view of their liquidity held globally with expansion plans to become a centralised multi-bank portal to manage cash and foreign currency.

Payments 💰

🇪🇺 Afterpay and Sezzle have arrived in Germany, providing competition for Klarna.

🇬🇧 Barclays is joining Mastercard’s Track Business Payment Services to bring multi-rail account-to-account payments to its business customers as both a Buyers and Suppliers Paying Agent. Goodbye manual reconciliation and cash collection delays!

🇬🇧 Visa is acquiring the UK’s Currencycloud, a cross-border FX exchange platform for businesses. The deal values Currencycloud at £700m.

  • 🙌🏻 TWIF Take -This is Visa’s second big acquisition in Europe after acquiring Tink a month ago. Visa’s network of networks strategy is playing out as it seeks to be a payments multi-rail, offering card payments, open banking payments and now FX capabilities.

🌍 News broke over the weekend that Amazon is to accept Bitcoin as payment by the end of the year, with Ethereum and others to come later. They have an open vacancy for a “Digital Currency and Blockchain Product Lead”.

Regulatory Corner 🔎

🇬🇧 The FCA have proposed a “Green FinTech Challenge” to help startups navigate regulation and test new products as the economy transitions to a net zero economy.

🇬🇧 The UK’s Treasury announced a public consultation on its “Travel Rule” for crypto regulation in relation to AML. The FATF’s Travel Rule governs cross-border transfers and mandates data sharing and transfer limits.

🇬🇧 FCA research found most people still have access to cash, despite public concern with bank branches and ATMs disappearing from the high street.

  • 🙌🏻 TWIF Take - However some have criticised the FCA over its distance calculations, especially impacting people in rural areas.


Longer reads 📜


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Michael

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