This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.
Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
Finovate Global extends a special thanks to the demoing companies, keynote speakers, and attendees that joined us for FinovateSpring this week via our digital platform. On Demand video from the conference will be available soon.
And for Finovate Global readers with an interest in innovators from outside of the U.S., here are some of the companies to look out for when the On Demand video is made available in the coming days.
Aisot Technologies (Switzerland) with its technology that provides next-generation, real-time analytics and forecasts, allowing financial services to enhance returns, reduce risks, and increase efficiency.
Coconut Software (Canada) with its customer engagement platform for financial institutions that want to improve their digital and physical engagements.
DigiShares (Denmark) with its white-label platform for tokenization of real estate to provide automation and liquidity to the real estate markets.
Dreams (Sweden) with its technology that leverages cognitive and behavioral science to help banks increase their end users’ financial wellbeing and engagement, and attract new audiences. Best of Show winner.
Flybits (Canada) with its customer experience platform for the financial services sector, delivering personalization at scale.
FormHero (Canada) with its SaaS solution that enables rapid creation of digital front-end experiences to solve for complex data collection needs.
How have financial services companies coped with the rising challenge of cybercrime in the Work From Anywhere era? We caught up with Tamas Kadar, co-founder and CEO of SEON, a cybersecurity startup based in Hungary, to learn how the company – featured in Forbes’ Hottest Young Startups in Europe – helps firms meet regulatory obligations and better defend themselves against fraud.
Tell us about SEON. When was the company founded and what problem was the company founded to solve?
Tamas Kadar: Founded in 2017, SEON was born out of necessity. Prior to its launch, co-founder Bence Jendruszak and I owned a budding crypto exchange, which was repeatedly hit by instances of fraud. We urgently needed a solution that would help us resolve the problem, but found that there were none on the market suitable for our business structure.
The problem was that most anti-fraud solutions in the industry had long integration times, lengthy contracts, and different packages for different sized businesses. We needed a solution that was more flexible and could be integrated and functional almost immediately. So we took matters into our own hands and developed a solution that would meet these needs. This later became SEON.
SEON’s services remove the barriers to fraud prevention that many companies face today. The solution can be integrated into business structures in minutes – a far cry from the usual weeks it takes for many mainstream solutions. It is suitable for businesses of any size, has a free trial period, and works on a rolling monthly contract, meaning that businesses can cancel and take up our services without being bound by long contracts – much like a Netflix for fraud prevention.
What in your background gave you the confidence to tackle this challenge?
Kadar: Having studied Deep Info Comms at the elite Corvinus University, where Bence studied General Management, we both had the knowledge needed to get SEON off the ground. It was there that I learned about the fraud tactics being used to get around the latest fraud prevention strategies. Having this insight, along with my technical know-how and Bence’s managerial skills, we had the confidence to move forwards with SEON.
It was clear that there were some pain points in the fraud prevention industry that needed addressing. We felt that we were the right people to do so.
Who are your primary customers in financial services and how do their needs differ from those of your customers in other industries?
Kadar: Neo banks, traditional banks, PSPs, buy now pay later (BNPL) and other fraud tech companies, account for about 25% SEON’s portfolio. The rest is made up of a whole range of different industries, including some of the most high-risk. Other sectors we serve include iGaming, eSports, cryptocurrencies and online trading, and travel.
The services we provide to financial institutions differ from others as they focus more on regulatory compliance, reducing cost when it comes to Know Your Customer (KYC) checks, and preventing money laundering. We also protect account openings, reduce customer acquisition costs, decrease bonus abuse, and flag fraudulent merchants using stolen credit cards.
By contrast, other industries use us to protect themselves against fraudulent activity such as account takeover, while we mitigate chargebacks for ecommerce merchants. We also prevent fraud surrounding ticketing in the airline industry.
Tell us a little bit about the technology behind your solution. What are the most effective tools for combating cybercrime?
Kadar: SEON has a number of solutions that are highly beneficial for helping businesses prevent fraud, including the SEON Sense Platform and Intelligence Tool. We draw on data from across the internet to establish customers’ digital footprints, weaning out false accounts and actively preventing fraudulent transactions from taking place.
Driven by transactional data, the SEON Sense Platform provides a comprehensive end-to-end solution for fraud managers that can be tailored to the individual needs of a company.
Meanwhile, our Intelligence Tool increases fraud detection accuracy with just one click. Users can simply enter an email address, IP address, phone number or location into the browser extension to get background information, which then enables fraud managers to see complete user profiles and flag suspected fraudulent ones. As a result, companies can detect fake accounts with ease.
These solutions address a number of problems in the fraud prevention industry. They can be integrated via a Google Chrome link or API within minutes, and as they work in entirely in the back-end, there are no added layers of friction for consumers.
In addition, our solution acts as a marker for the move away from the industries overreliance on artificial intelligence (AI) and machine learning (ML) alone. AI and ML are often seen as a magic pill that will solve all of a business’ fraud woes and are left to resolve issues without the proper supervision. This impacts reportability because it isn’t always easy to establish the reason for certain decisions that a solution has made. Instead, our solutions are based on a supervised learning approach, giving fraud managers the information needed to make effective decisions.
How has COVID-19 impacted your company and its customers? What are your biggest takeaways from the experience?
Kadar: The flexibility of our solution has meant that we have been able to easily adapt to changes imposed by the pandemic. One of the largest changes we’ve seen in terms of fraud is the amount that is taking place. Many businesses moved into the online space in order to survive lockdowns and social distancing measures. The problem is that online fraud grows in line with online activity, so the amount of fraud that is taking place there has rapidly grown. As a result, our main focus has been on industries that have felt these changes the most – especially high-risk industries such as iGaming and eSports.
The solutions developed by SEON have made an enormous impact on the way our customers can manage, monitor, and mitigate fraudulent activity. Key to our ability to provide such solutions has been our open lines of communication with our customers. It’s important that newly digitised businesses understand that fraud prevention is an evolving practice and their feedback is vital to its success.
For example, our customers know they are encouraged to contact us whenever something changes within their business, be that a release of a new software update or simply a realisation that their customers often use other social registries that we haven’t been monitoring. With this knowledge, we can quickly begin developing new lines of defence.
What is the most important thing about the technology scene in Hungary that many people outside of the area might be surprised to learn?
Kadar: Setting up SEON wasn’t all plain sailing. Bias can often hamper the growth of startups outside of traditional European hubs such as London and Munich, meaning it’s difficult for businesses to secure the investment needed in order to scale.
This is especially true for Central Europe. Bence and I found this out the hard way. When getting SEON off the ground, we found that many European investors were skeptical when it came to startups from Central and Eastern Europe.
Still, we see launching SEON in Hungary as not only a blessing, but an advantage when it came to creating a unique product that the fraud prevention industry was desperately in need of. Being outside a typical startup hub has resulted in the company being more creative, more agile and, contrary to many seed level businesses, more resilient.
Establishing SEON in Hungary also greatly reduced our outgoings, allowing us to use the initial investment we secured to grow. This is because the talent pool in Eastern Europe met the needs of the business. It’s naturally abundant in people with mathematics, computer science, and AI-based skills, which has provided us with the human capital necessary to develop and maintain our fraud solution, without initially having to set up offices elsewhere.
You recently received a major investment – the biggest Series A round in Hungarian history. How important was this funding and what will it enable SEON to do?
Kadar: As part of the funding round, which was led by leading European early-stage investor Creandum, we secured €10 million (USD 12 million) in series A investment. This is a pivotal point in our company’s growth and will drive us in our mission to democratize fraud prevention by removing the barriers that many companies face.
With the investment, we plan to expand our presence in the U.S. and U.K., with the aim of having our London headquarters account for more than 30% of our revenue. We will also be shortly announcing the launch of our new U.S. office, along with our plans for the region.
In all, this investment will take our company to the next level, enabling us to not only better serve our existing customers but also provide our services to even more businesses across the globe.
Here is our look at fintech innovation around the world.
From U.K.-based Standard Chartered to Germany’s Deutsche Bank, banks around the world are adapting to the post-COVID world with fewer branches. In separate announcements only a few days a part, two of the globe’s bigger banking presences (Standard Chartered is the 44th biggest bank in the world by total assets; Deutsche Bank is ranked 21st) have signaled that hybrid workplaces will join digital transformation as defining aspects of banking operations in the future.
Standard Chartered’s announcement comes as the firm reports better-than-expected profits for the first quarter. The bank plans to reduce the size of its branch network to 400 – and move to a hybrid remote working setup – as part of a cost-cutting maneuver. Standard Chartered also announced that it will look to automation to “enable the re-shaping of the workforce.” Standard Chartered has a strong presence in Asia, Africa, and the MENA.
As for Deutsche Bank, company CEO Christian Sewing cited fewer branch customers and a growing preference for digital options among the reasons driving the move toward a hybrid model. Deutsche Bank expects to close 150 Deutsche Bank and Postbank branches this year with an additional 50 Postbank branches to be closed in 2022. At the same time, the company said it will introduce a hybrid workplace model for its employees that will allow them to work remotely up to three days a week.
Hybrid workplaces aren’t the only things that financial services workers will be getting used to in 2021. If the new employee training initiative from Spain-based BBVA is any indication, bank workers may find themselves being reskilled and upskilled just by playing a game.
BBVA has announced a new global reskilling and upskilling experience, The Camp, that is designed to enhance the employability of its professional workers. Part of BBVA’s learning model, Campus BBVA, the new experience focuses on 14 strategic skills that are taught using a digital, gamified environment in which the workers are the primary actors who determine their own development.
“The challenge of ensuring the survival of organizations entails adapting and being flexible enough for teams to be able to navigate this uncertainty and constantly incorporate the skills that are needed to promote the strategy,” Global Head of Learning at BBVA Pilar Concejo said.
Each of the 14 strategic skills has a different training itinerary. And each itinerary has three levels of specialization that uses a mountain-climbing analogy to assess the employee’s progress. Starting out as a metaphorical hiker, the employee advances from the valley (basic level) to the mountain (intermediate level), earning status as an “explorer.” Successfully advancing from the mountain to the summit (expert level) gives the employee the rank of “alpnist” – the highest level of specialization in the knowledge category.
“Gamification is a very important element at Campus BBVA, and now also at The Camp, as it allows us to design experiences in which employees feel much more identified and increase their level of commitment to the learning process,” Concejo said. “In the end, we try to ensure that the employee is motivated enough to move forward with their development in a continuous and sustainable manner over time.”
Here is our weekly look at fintech innovation around the world.
Washington, D.C.-based digital banking infrastructure company Securrency announced plans to expand in the UAE in the wake of its $30 million fundraising.
Financial Times featured Fusion Microfinance, a company that specializes in providing microloans of between Rs10,000 ($136) and Rs60,000 ($816) to poor women in India.
In a round led by Prosus Ventures and Tencent, Amsterdam-based fintech BUX has secured $80 million in funding that will fuel both international expansion and new product development. The investment also featured a change in the leadership ranks at the company, with founder Nick Bortot handing over the CEO reins to COO Yorick Naeff.
“With this new funding round, BUX will continue to spearhead innovation by implementing advanced features to further shape the future of how Europeans invest,” Naeff said. We are extremely grateful to have top tier investors like Prosus Ventures and Tencent onboard to support us in our mission.”
With half a million customers in the Netherlands, Austria, Belgium, France, and Germany, BUX enables investors to buy and sell shares and exchange-traded funds (ETFs), without having to pay commissions. Dubbed the “Robinhood of Europe”, BUX is a response to what Naeff said is a growing awareness of the importance of investing by younger Europeans. Naeff underscored financial uncertainty as a major concern among the younger generation and credited them for realizing that investing is “one of the few viable ways left” to manage that uncertainty. The self-directed nature of investing on BUX’s platform – for shares and ETFs, as well as cryptocurrencies on its BUX Crypto app, and CFDs on its BUX X solution – is another appealing aspect, Naeff said.
“Traditional financial market investing comes with a lot of friction and we firmly believe in the democratization of access to financial services for the next generation of investors,” Head of Europe Investments for Prosus Ventures Sandeep Bakshi said. “The existing solutions are expensive, complex and not designed for younger generations.” Alex Leung, Assistant GM at Tencent, Strategic Development, noted that Bux’s business model does not depend on some of the revenue-raising strategies that have been criticized at rivals like Robinhood. “BUX is the only neo-broker in Europe that offers zero commission investing without being dependent on kickbacks or payments for order flow,” Leung said. “This ensures that its interests are fully aligned with its customers.”
No valuation information was provided as part of the funding announcement. The company noted that its signature BUX Zero solution “has more than doubled its assets under management” in the past three months.
Here is our weekly look at fintech around the world.
Central and Southern Asia
Revolutappointed Paroma Chatterjee as its new CEO for India.
The fintech industry in Latin America is among the world’s most vibrant. From the initiatives in Mexico to provide a legal framework that will enable local fintechs to flourish, to the innovations in central bank digital currencies in the Caribbean, to the rising fintech giants like Nubank in Brazil, financial technology is making a major difference in the lives of a growing number of Latin Americans.
For this week’s Finovate Global: Voices, we caught up with Ximena Aleman, co-founder and Chief Business Development Officer of Prometeo, to discuss fintech in Latin America and the power of open banking to improve financial wellness and create opportunity in the region.
Please tell us a little about Prometeo and what drove you to co-launch the company.
Ximena Aleman: Prometeo is a fintech company striving to create an open and connected financial market in Latin America (LATAM). We are building a huge highway of financial information across financial institutions and countries in LATAM. Prometeo is the largest Open Banking API platform in the region disrupting the financial sector in México, Colombia, Brazil, and six more countries. We provide a single point of access to information, transactions, and payments across more than 30 financial institutions and 45 APIs in nine countries of LATAM.
As LATAM entrepreneurs, we are well aware of the tech gap in the financial sector between underdeveloped and developed countries. In particular, the lack of adequate tech infrastructure. So we decided to approach this as an opportunity to build not only a great solution but also a path towards financial access for the region.
What are the drivers of open banking in Latin America?
Aleman: Open Banking is a disruptive innovation that reframes the way banking is carried out. Transactions and communications between customers and institutions are going from taking place behind closed doors to transparent exchanges in the public square. It is no wonder that traditional financial institutions initially viewed the practice with a measure of bemusement or even suspicion.
However, there has been a marked shift in their thinking. Adoption has been slower in Latin America than in other parts of the world, but most of the open banking biggest names in the region have headquarters abroad. Open banking has been a hot topic globally; Latin American associates have taken note and ushered in the conversation.
Another factor that has changed the playbook is the COVID-19 pandemic. The restrictions on daily life and public interactions have forced even the most hard-rooted, traditional financial institutions to review their digital transformation strategies. If customers can’t visit branches, digital channels become the sole venue of exchange.
What do you think it will take to get more women in leadership and founding roles in fintech?
Aleman: I think that as we move forward to a more “gender-balanced” society we have to rethink our financial exchanges from a gender perspective, too. There’s little offered in the financial sector for women and little by little some female fintech entrepreneurs are developing solutions for this segment (for instance, Emma Sanchez’s neobank for women, Jefa). If the startup ecosystem understands that half of the world’s population has been historically financially underserved, and the huge opportunity this is, it won’t take long for women to start developing custom-made products for that segment.
You have said two of the biggest challenges to diversity in fintech are funding and technical training. What can and should be done about this?
Aleman: The gap between VC investments in startups led by women is significant versus those led by men. In the last 10 years, fintech companies led by women have raised 1% of the total investment in fintech. The disparity is really significant.
I believe this gap is multifactorial: historically, the financial and the technology worlds were dominated by men. Also, among VC funds, women in the decision-making process are just a few in number and, per my own experience, men really value having another man as their counterpart.
There’s a lot we can all do: all the stakeholders involved in the fintech sector should make their own changes and push to close the gap. As women, we have to create our support network on every front, talk to mentors, female start-up groups, and above all, be confident and trust your knowledge, your experience, and your ability to navigate through hostile environments. If you feel you are not strong enough in certain areas, seek training. Technical training and really knowing your business is key to build confidence and close this gap.
One of the biggest reasons why women receive less VC investment than men is that so few of them make up decision-makers in VC funds.
How has the pandemic impacted the work you do and the communities you serve?
Aleman: Open Banking has seen a rise in LATAM in the past year, so our business vertical – as everything related to digital transformation in the financial sector – has been benefited by how the pandemic reshaped human interactions. However, no one in LATAM can be a stranger to the economic challenges we are facing today and ahead. There have been huge increases in unemployment, debt, etc. In Uruguay, a year after the pandemic, surfing what might be the country’s second wave of COVID-19 cases, early in the morning in the small towns in the countryside, you will bump into people waiting in line just in one shop, in the local microfinance branch, to ask for credit or pay their debt.
There are many who do not know much about Uruguay. What do you think more people should know about the country?
Aleman: Of course. I’m very proud of my country. We are a small country down in South America, between Argentina and Brazil. We are popular for the quality of our meat and football players, but as noticeable as that is, we are a growing tech hub, in particular for financial services. Uruguay has a long history of providing high-tech software to the financial sector, for instance, we host four banking core software companies (Infocorp, Topsystems, Bantotal, and Mantentia – that was recently bought by Technisys). Most recently, we joined the fintech wave with great B2B solutions like Bankingly or our first local unicorn, dLocal. I think it is worth mentioning the government’s efforts to promote entrepreneurship through the Innovation Agency (ANII) and Development Agency (ANDE). We are well aware that Prometeo was possible thanks to their support and as a startup, we are a result of the whole ecosystem pushing us to grow.
What can we expect from Prometeo over the balance of 2021?
Aleman: We are pushing hard for Open Banking adoption in Brazil, México, and Colombia. For those countries, it’s a challenging shift so we want to provide the best possible solution. That’s why we are releasing a payment feature that allows automated payments across banks in those countries. At the same time, we are on a mission to provide full coverage across LATAM. So this year it’s all about expansion, coding, and growth!
Learn more about fintech in Latin America and the work of Prometeo.
This week we learned that Norway-based Finovate alum Signicat has teamed up with a German software company Cryptshare to market a new B2B identity verification solution. The technology combines email encryption and secure file transfer with trusted sender and recipient identities to make business communications safer and more accountable.
In other fintech news from the Nordics, Santander Consumer Bank in Norway went live with a new PFM app that leverages open banking solutions from Nordic API Gateway. Founded in 2017 and headquartered in Copenhagen, Denmark, Nordic API Gateway made its Finovate debut last month at our all-digital fintech conference, FinovateEurope.
At the event, co-founder and CTO Gudmundur Hreidarsson demonstrated how the company’s platform simplified open banking payments and access to financial data, offering powerful account-to-account payment services through a single API. More than 40 financial institutions in Europe – including Lunar, Danske Bank, OP Financial Group, and Checkout Finland – rely on Nordic API Gateway’s open banking services.
“Current payment rails such as cards are very expensive for businesses and and increasingly inconvenient for consumers,” Hreidarsson said during his presentation last month. “Open banking changes that. It enables payments with low fixed fees per transaction rather than the high percentage fees of cards which can mean very significant cost savings for businesses – and is very convenient for consumers.”
“But getting into open banking and using open banking is hard,” he added. “It’s really hard. The APIs of the banks are slow to mature and there is still quite some way to go. Businesses are just starting to realize what kind of use cases can be solved with open banking. And consumers are only now discovering the convenience of paying with their accounts. That’s why we built Aiia, to offer an open banking platform that simply works.”
Companies from the Nordics (Denmark, Norway, Finland, Sweden, Iceland, and Greenland) have been well represented at FinovateEurope of late. This year alone featured – in addition to Nordic API Gateway – two companies from Sweden: Stockholm’s Dreams and Gothenburg’s Econans. Our most recent in-person FinovateEurope conference – held in Berlin, Germany – featured three companies from the region, as well: ReceiptHero and NordCheck of Finland, and Subaio of Denmark. Other Nordic fintechs that have demonstrated their technologies live on the FinovateEurope stage over the years include BehavioSec, Tink, and Klarna (Sweden); Encap Security, EVRY, Monobank, and Spiff (Norway); Meniga and Trustev (Iceland/U.K. and Iceland); and Mistral Mobile (Finland).
“It certainly seems that Schumpeterian destruction, where creating new markets is preceded by old ones being challenged or even destroyed, applies in the Nordics,” the team of Frida Jonsdottir, Olli Toivonen, Visa Jaatinen, Arttu Utti, and Richard Lindqvist wrote in the introduction to their FinTech in the Nordics: A Deloitte Review. “The Nordic FinTech market is rapidly growing and diversifying, with more companies and new technologies being created. This is happening regardless of the fact that the incumbent financial institutions are challenged by the lagging economic growth rates and ever changing regulatory burden, both of which afflict those who are looking to enter the market.”
Read the rest of the Deloitte report on fintech in the Nordics. For more about fintech in the region, check out:
Four Influential FinTech Companies Disrupting Norway’s Financial Space – IBS Intelligence
Top 5 FinTech Companies Leading the Swedish Market — IBS Intelligence
The Africa Report profiled Indicina, a Nigeria-based startup that offers automated tools to assess creditworthiness, as it nears completion of a million dollar investment.
Last week, we leveraged the occasion of French alum Ledger’snew, cryptocurrency-focused, business division to bring readers up to speed on the latest in French fintech. This week, news from Fabrick, a financial services company based in Milan (and a sponsor of the just-concluded FinovateEurope Digital) offers us a similar opportunity to catch up with innovations in fintech in Italy.
Fabrick announced this week that it had forged a partnership with Microsoft Italia. The collaboration will enable the open banking financial services provider to leverage cloud computing and other new technologies to develop solutions that help accelerate digital transformation in financial services. As part of the alliance, Fabrick’s offering will become a part of the Microsoft Commercial Marketplace and enable the company to better market its technology to the enterprise sector. Fabrick’s personal financial management solution is already available on Microsoft’s marketplace.
“For us, the partnership with Microsoft represents an extraordinary opportunity to grow and strengthen our positioning in the market,” Fabrick CEO Paolo Zaccardi said. “We have found a valuable ally who, like us, has seen in technological evolution and Open Finance a new way to innovate the delivery of corporate services for the end user.”
Founded in 2017, Fabrick is an open banking ecosystem and a regulated TPP. Within digital payments, channel innovation, and open banking, Fabrick helps enrich the offerings of banks, processors, and fintechs. With customers including Bankart, HDI Assicurazioni, and illimity, Fabrick made fintech headlines earlier this year via collaborations with DizmeID Foundation for a hackathon based on innovations in digital identity, and with Banca Progetto and Faire to help the Italian challenger bank offer an instant lending service for small and medium-sized businesses.
“We are particularly enthusiastic about this collaboration because it testifies to the validity of the ecosystem proposed by Fabrick,” Zaccardi said when the partnership was announced last month. “On the one hand (we have) the capacity of our platform, through which the service will be implemented, and on the other the important synergies that arise within our community Fintech District, of which Faire is part and through which we have begun to collaborate with them.”
Like France, which we looked at last week, Italy has a fintech industry that is often overlooked in the broader conversation on European financial technology. To this end, this week’s Finovate Global Reports turns to the Fintech District and its The Italian Fintech Guide 2020 for a peek into “the most promising fintech companies operating in Italy.”
According to Fintech District, Italy had 345 fintech startups as of the end of 2019. It is a young industry – with most startups at an intermediate stage of growth and with less than one million in capital raised. Additionally, these fintech teams have members who are, on average, less than 32 years old. As with most regions, fintechs in Italy have increasingly been looking to enhance the digital capabilities of incumbent banks and insurance companies – as well as developing B2C solutions for Italian consumers. Open banking has helped accelerate this trend, and companies like Fabrick have been among those helping banks and third party solution providers connect and innovate together.
In recent years, our FinovateEurope conferences have featured a number of alums headquartered in Italy, as well. Ten of these companies, along with the year of their most recent Finovate appearance and their home city, are listed below.
Jeff App, loan brokerage platform the the underbanked, received a $1 million investment that will help the Latvia-based company continue its expansion in Vietnam, its first market.
Kona, an Uruguayan company that leverages AI to enhance the customer experience, has been acquired by Miami-based fintech Technisys to bolster its digital banking offering.
Asia-Pacific
Gimo, a fintech startup that serves underbanked workers in Vietnam, received seed funding from ThinkZone Ventures, BK Fund, and others strategic investors.
Still looking for evidence that cryptocurrencies have arrived? The $170 million raised this week by Austrian digital asset neobroker Bitpanda is a testament to both the surging interest in cryptocurrencies as well as the vitality of fintech innovation in the CEE countries.
Bitpanda’s Series B round earned the company a valuation of $1.2 billion, giving Austria its first fintech unicorn. The Vienna-based company, founded in 2014 by co-CEOs Eric Demuth and Paul Klanschek, along with CTO Christian Trummer, plans to use the capital to add to the types of investments available on its platform, as well as expand to more markets in Europe.
This latest funding round was led by Valar Ventures and featured participation from partners of DST Global. The round is more than triple the amount raised by Bitpanda in its Series A financing back in September, which was also led by Valar Ventures (SpeedInvest of Vienna was an investor in the round, as well). The capital arrives the same week that Bitpanda announced that it had reached a new milestone of more than two million registered users on its Bitpanda and Bitpanda Pro platforms.
Bitpanda enables cryptocurrency investors and traders to buy, sell, save, and send more than 50 digital assets including Bitcoin and Ethereum. The neobroker also offers the world’s first real crypto index and a Bitpanda Card that enables Bitpanda accountholders to spend their digital assets as easily as they spend their cash.
With FinovateEurope right around the corner, we’ve got more than a little continental fintech on the mind these days. This week we take a quick look at fintech news from France, a country whose fintech industry is often overlooked in the broader conversation on European fintech.
Earlier this week, we learned that Finovate alum Ledger was launching a new business division dedicated to taking advantage of growing institutional interest in cryptocurrencies. Headquartered in Paris and founded in 2013, the company announced that its Ledger Enterprise Solutions unit will support enterprise adoption of the company’s core custody technology, Ledger Vault, as well as advise institutional clients with regards to technology implementation, security, and governance of digital asset portfolios.
On the French fintech funding beat, PayFit, a payroll and HR platform launched in France in 2016, announced that it has secured $107 million (EUR 90 million) in Series D funding. The investment was led by Eurzeo Growth, Large Venture, and BPI France, and featured participation from the company’s existing investors Accel, Frst, and individual investor Xavier Niel.
The company said that the capital will help support its comprehensive HR solution for SMEs and enable the company – which also operates in Spain, Germany, the U.K., and Italy – to “increase headcount from 550 to 800” by the end of 2021.
PayFit serves more than 5,000 small businesses, and includes Revolut, Starling Bank, and Treatwell among its customers. The company experienced growth of 40% in 2020 – a pace PayFit anticipates doubling this year – and credited much of this “hypergrowth” to the digital imperative brought on by the COVID-19 crisis.
“As a result of the pandemic, HR professionals have faced a much higher workload and unfamiliar challenges,” PayFit co-founder and CEO Firmin Zocchetto said. “They have had to deal with various issues, including supporting the company’s management with the implementation of remote work policies and ensuring employee wellbeing through new initiatives.”
Zocchetto said that there are “tens of millions of SMEs” that are ready for digital transformation. “The market is huge, and our ambition remains the same: to become the point of reference for payroll and HR management for all SMEs,” he said.
Striking another note in the funding beat, French fintech Silvr announced a EUR 3 million seed investment this week. The company, launched last year by Nima Karimi and Gregory Tappero, provides financing for digital businesses that cannot access traditional bank financing and want to raise equity capital.
Silvr offers a revenue-based financing model based on the performance of the financed company, an approach that contrasts with both traditional asset-based lending and fundraising models. Karimi has said that Silvr’s strategy offers a new option for SMEs in France, calling it simpler and more transparent.
Here is our look at fintech innovation around the world.
SEON, a Hungarian startup helps companies weed out false accounts and prevent fraudulent transactions, secured $12 million (EUR 10 million) in funding. The round is Hungary’s largest Series A funding to date.
Lithuanian fintech FINCI has gone live with Temenos’ Payments and Transact core banking solutions.
Estonian financial services company LVH invested GBP 4.45 million in U.K.-based B-North, which is building a SME lending bank.
This week for our Finovate Global Lists feature we congratulate the graduates of Startupbootcamp FinTech Dubai. Eleven startups successfully completed the MENA-based accelerator program in late February, wrapping up the three-month experience with a pitch opportunity before an audience of investors, corporate partners, mentors, and industry analysts.
“As the Demo Day has passed and the 11 startups of our third cohort continue their growth journeys – we are incredibly proud to welcome the 23 amazing founders of these startups as part of our global @sbcFinTech family!” Startupboootcamp Dubai announced via Twitter.
The graduates are:
Finllect: a UAE-based financial wellness app for Gen Zs.
Flaist: a digital transformation platform for banks.
Singular Capital: a digital asset mobile wallet based in Malaysia.
Open CBS: a Hong Kong-based, open and scalable, cloud-based core banking system for smaller FIs.
Absolute Collateral: a digital B2B capital markets trading platform based in the U.K.
Tajjir: a Jordanian startup that offers a stock trading software solution for retail investors.
Aura Technologies: an insurtech firm that enables non-insurance businesses to sell insurance to their customers.
CaaS (Compliance-as-a-Service): a regulatory reporting platform based in the U.K.
Stornest: a UAE-based digital legacy planner to support end of life planning.
Raseed: an investment platform that enables users in the UAE and Saudi Arabia to buy and sell U.S. stocks.
Kilde: a global private debt marketplace headquartered in Singapore.
Startupbootcamp FinTech is conducted in partnership with Dubai International Financial Centre (DIFC), Visa, HSBC, and Mashreq Bank. The program is open to fintech startups throughout the MENA region, as well as around the world, and offers expert-led Master Classes, tailored mentorships, as well as coworking space and living expense support for the duration of the program. Participants also benefit from access to corporate partners and an alumni growth program that helps startups remain networked after the program ends.
Since its launch in 2018, more than 30 fintech startups innovating in payments, lending, and Islamic digital banking count themselves as alumni of the accelerator. Startupbootcamp FinTech Dubai is part of an international network with more than 20 industry-focused programs for technology startups. The network boasts 950 startups accelerated – 41% of which were female-led – that have raised a combined $869 million (€ 727 million) in total funding.
Here is our look at fintech innovation around the world.
As our recent conversation featuring Boss Insights founder and CEO Keren Moynihan, reminds us, the fintechs (and “TechFins”) of the Great White North are engaged in some of the most forward-looking innovation on the continent.
This week brings an above average volume of news from Canada’s ambitious real-time payments industry. For one, the Vancouver Bullion & Currency Exchange (VBCE) announced a partnership with EMQ to bring “near real-time” cross-border payments to businesses and consumers across Canada. A PSP as well as a foreign currency exchange, VBCE hopes that its partnership with the global financial settlement network will give its customers the ability to move money faster and more efficiently. The firm also anticipates being able to use EMQ’s network to bring new services to market and scale existing ones.
“The speed and reach of EMQ’s global network allows us to pilot new services in one market and scale them rapidly across others to meet the evolving customer needs,” VBCE VP of Business Development Kevin Ma said. “This is especially important for our business with a diverse product portfolio.”
Elsewhere on the Canadian real-time payments beat, Payments Canada announced a collaboration with debit network Interac to support real-time payments in the country. Interac will serve as the exchange solution provider for Real-Time Rail, the real-time payments systems operated by Payments Canada and regulated by the Bank of Canada. RTR, scheduled to go live in 2022, will enable Canadians to initiate payments and receive funds in seconds.
Payments Canada President and CEO Tracey Black said that RTR will be the “foundation for faster, data-rich payments” and will serve as a “platform for innovation.” Black also praised Interac as a “well-suited partner” with the requisite infrastructure and connectivity to support “the rapid adoption of real-time payments in Canada.”
Last, some developments on the Canadian neobank front. Toronto, Ontario-based challenger bank KOHO added a no-fee savings account to its offerings this week. KOHO Save gives account holders 1.2% interest on their entire balance. There are no teaser rates and no minimum balance is required to acquire an account, which is available on the KOHO app.
“We’re excited to add KOHO Save to our product line as a simple and valuable money earning tool for Canadians,” KOHO CEO and founder Daniel Eberhard said. “We’ve been able to build a savings tool that doesn’t follow the same restrictions of most other savings products on the market. People just want to access their money freely and earn a great interest rate. We think Save is a wonderful step in that direction.”
KOHO also offers a savings and checking account and gives users a minimum of 0.5% (up to 10%) cash back on all purchases. KOHO Premium account holders get an additional 2% cash back on three major spending categories. The company, founded in 2014 and headquartered in Toronto, Ontario, has raised $57.5 million in funding from investors including Drive Capital and Portag3 Ventures.
Here is our look at fintech innovation around the world.
Israel-based Rewire, a cross-border digital banking firm that serves migrant workers, announced $20 million Series B round led by Finovate alum OurCrowd.
Zelf, a messenger-based challenger bank based in Latvia and focused on Generation Z customers, announced earlier this week that it has secured $2 million in pre-seed funding. The round was led by Austrian venture capital firm 3VC, and featured participation by Seed X, Hard Yaka, Goldfinger, and angel investor Chris Adelsbach.
The company, founded by CEO Elliot Goykhman, will use the capital to fuel growth and expansion throughout Europe, particularly in Spain, Germany, Poland, and Italy. Zelf also sees the funding as an opportunity to establish itself in the U.K. and the U.S., as well. Most recently, the company launched operations in France and said it has 13,000 people currently using its Zelf Cards there.
“We started building ZELF in 2018 with a vision of a cashless and contactless society of the future,” the Zelf Team noted on its blog in a look back at 2020. “and the shockwave of COVID-19 in 2020 proved that it was the right path not only businesswise, but also sadly healthwise.”
Zelf accountholders get a digital Mastercard and an IBAN account which can be used to send and receive money on instant messaging apps like Facebook Messenger, WhatsApp, Telegram, and Viber. Zelf also features an AI-powered voice interface that can be used to perform basic PFM functions like requesting money, sending invoices, and checking account balances.
“We are confident that our business model of eliminating cumbersome banking apps, as well as physical plastic cards, will prove to be the winning strategy,” Goykhman said.
This week’s Finovate Global Lists takes a look at the fintech industry in the Philippines. IBS Intelligence recently leveraged the Startup Genome’s Global Startup Ecosystem Report to analyze the adoption of digital financial services in the country and pick five companies to keep an eye on this year.
The Philippines, as the article noted, is an interesting case study insofar as the country’s capital of Manila has signficant English-speaking population and what IBS Intelligence called “a more western inclined culture” that is a “natural fit for the growth of fintech.”
Compared to larger neighbor Indonesia and smaller neighbor Malaysia, the Philippines is younger and has a faster growing population. The Philippines also has a marginally higher literacy rate, as well as higher real GDP growth and greater per capita mobile phone penetration (based on subscriptions).
Looking specifically at the country’s fintech industry, Startup Genome noted that fintechs comprise 15% of the startups in Manila, the Philippine capital. The report gave the country’s fintech market a transaction value of $10 billion in 2019 and anticipated a growth of 24% in 2020. Among the fintechs highlighted in the report are digital wallet and exchange Coins.ph (recently acquired by Indonesia mobility company Go-Jek for $72 million) and online financing platform for SMEs, First Circle.
After 20 years as a player in the retail banking market of the Czech Republic, ING is calling it quits. The firm announced this week that it plans to withdraw from the country’s retail banking scene and is encouraging its customers to consider Raiffeisenbank Czech Republic as their alternative bank going forward.
ING expects to end its operations in the Czech Republic by the end of this year. The company has approximately 375,000 retail banking customers in the country and has worked with Raiffeisenbank to ensure the smoothest possible transition for ING customers to take advantage of the opportunity to transfer their savings and investments. This agreement is pending regulatory approval.
ING Group said that the decision in part reflects an assessment of whether or not operations “are likely to achieve the preferred scale in their market within a reasonable time frame. ING has more than 39 million retail and wholesale customers in 40 markets around the world.
We will stay in the CEE for this week’s Finovate Global Profile, which features payever, a German platform-as-a-service commerce solution for banks and insurance companies. Founded in 2013 and led by CEO Artur Schlaht, payever made its Finovate return last fall at our all-digital FinovateWest event. At the conference, the Hamburg, Germany-based company demonstrated its Commerce Infrastructure that enables banks and insurance companies to connect to hundreds of thousands of businesses – as well as million of consumers – online as well as at the point of sale.
Payever offers a variety of Business Apps that cover the entire sales cycle. The company’s Checkout solution gives customers wide access to a range of payment options without requiring the merchant to undergo complex integrations. With Shop, merchants can build their own online store in without needing any coding experience. The solution features design template as well as cloud hosting and support.
Payever’s PoS technology enables its partners to offer cashless payment acceptance using QR codes instead of expensive hardware. Other solutions offered by payever include a Studio to help merchants better display their wares digitally and Mail, an e-mail marketing solution for building newsletters, sending personalized offers and more – all without needing to code.
Check out payever’s demo from FinovateWest last year.
Here is our look at fintech innovation around the world.
Central and Eastern Europe
Tinkoffcollaborates with oneFactor to put AI-powered predictive analytics to work in enhancing credit scoring.
South Africa embarks on the second trial of both a wholesale central bank digital currency (CBDC) and a wholesale settlement token for interbank use. For more on the rise of CBDCs, check out our Finovate List Series Feature, Five Things to Know about CBDCs.
