Two of the biggest news items in international fintech this week also reflect two of the biggest trends in the industry in recent years: interest-free retail financing and the rise of digital assets.
With regard to the first, Stockholm, Sweden-based Klarna announced this week that it hauled in a whopping $639 million in new funding in a round led by SoftBank. The investment gives the company a valuation of $46 billion and makes it the most highly-valued fintech company in Europe.
“Consumers continue to reject interest- and fee-laden revolving credit and are moving toward debit while simultaneously seeking retail experiences that better meet their needs,” Klarna founder and CEO Sebastian Siemiatkowski said. “More transparent and convenient alternatives align with evolving global consumer preferences and drive worldwide growth.”
Read our coverage of Klarna’s big fundraising news.
The other major trend in fintech relates to the boom in cryptocurrencies. El Salvador, a small nation in the middle of Central America, announced earlier this week that it will recognize bitcoin as legal tender – the first country in the world to do so.
The move came as the result of a 62-22 vote in the Salvadoran Congress, which overwhelmingly backed the initiative proposed by President Nayib Bukele – whose party controls the legislature. After the vote, Bukele tweeted that the move would be a boon for the country “bring(ing) financial inclusion, investment, tourism, innovation, and economic development.” The law would require companies to accept bitcoin as payment for goods and services, as well as enable citizens to pay their taxes using bitcoin. Bukele further directed the country’s state-owned geothermal power company LaGeo to develop a strategy to leverage the power of El Salvador’s volcanoes to power bitcoin mining.
Skeptics of the move range from those who point to the country’s economic assistance program with the International Money Fund as a potential complication, to others who simply have no idea what bitcoin is and can’t imagine using it. “How am I going to agree with this? I haven’t seen it even in photos.” Reuters quoted one El Salvadoran shopper speaking in response to the news. “I know nothing about it. You need to understand your currency.”
Here is our look at fintech innovation around the world.
Central and Southern Asia
- Indian personal finance startup Index agreed to be acquired by digital banking company Niyo.
- BharatPe made its first acquisition, purchasing loyalty program Payback India from American Express and ICICI Investments Strategic Fund.
- Nikkei Asia looked at how India’s fintech unicorns are looking at opportunities to expand into southeast Asian markets.
Latin America and the Caribbean
- Brazilian fintech Nubank announced a $750 million extension to its Series G round. The round’s total now stands at $1.15 billlion.
- Mexican digital payments platform Clip raised $250 million in new funding at a unicorn valuation of nearly $2 billion.
- Challenger bank IRIS launched in Colombia this week.
- Visa introduced a new program for Bangladeshi-based startups and fintechs.
- MSME-focused Indonesian fintech BukuWarung raised $60 million in Series A funding.
- MatchMove Pay, an embedded finance company based in Singapore, secured $100 million in funding from Nityo Infotech Corp to fuel international expansion.
- Technext Singapore reviewed the most popular fintech apps in Africa.
- TechCrunch featured African liquidity provider for SMEs Float.
- A partnership between Ukheshe, Mastercard, Nedbank, and Telkom has produced Africa’s first virtual card for making transactions on WhatsApp.
Central and Eastern Europe
- German financial app for Gen Z youth, wajve, secured $6 million (€5 million) in seed funding.
- Latvian fintech Nordigen topped 1,000 bank integrations this week.
- UKRSIBBABNK launched a new digital banking solution in the Ukraine courtesy of a partnership with Finovate Best of Show winner Dreams.
Middle East and Northern Africa
- Abu Dhabi Islamic Bank (ADIB) announced plans to launch an e-commerce-focused biometric authentication solution in partnership with Visa.
- Egyptian fintech startup MoneyHash secured a six-figure investment to develop its payments API.
- Egyptian agri-fintech startup Monzare3 announced a seven-figure pre-seed investment to help provide financing for smallholder farmers.