Published:
Aug 14, 2021
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Pack your bags, checkbooks, and fill out your passenger locator forms folks, it's time to take a trip to the emerging markets. Fintech investment is growing in emerging markets. Incubators are alive and thriving and public markets have grown fond of emerging market listings.
In particular, the African continent has seen an influx of capital into local fintech startups. In the first half of 2021, African fintech companies have secured $330m of funding, which is 2x the funding received in all of 2020. While geopolitics and FX issues deterred VCs in the past, recent headliner financings including Moove, Yoco and FairMoney highlight the ongoing opportunity in the region.
Other emerging markets have also seen major recent successes. Brazilian neo-bank Nubank hired investment banks to advise on a $2b raise on the Nasdaq following a fundraise in June that cemented the company’s valuation north of $30b. Adding to this was news that Mexican fintech Credijusto is in talks with Tidjane Thiam’s SPAC, which could lead to a merger at a valuation of $1.5b. Furthermore, SoftBank revealed that it’s commitments in Latin America have paid off handsomely with assets valued at $6.9b, after investing about $3.5b in the region.
With rapidly growing populations, rampant mobile adoption, and the potential for technological leapfrogging, the amount of actionable opportunities have become palpable to most. Fintech currently resembles Pitbull in the early 2000’s, ready to take on the world one country at a time…DALE!
API links fintech companies to fed payment rails - If done right, the expansion into high value, real-time B2B payments will be a “huge game changer,” Reserve Trust CEO Dave Wright told PYMNTS, pointing to the multi-trillion dollar opportunity that exists to digitize, modernize and democratize this largely untapped slice of the market. Read more
A ‘neobank for influencers’: Why the $15b creator economy is fintechs’ next battleground - Posting pictures on social media is no longer a fringe side-hustle, yet there’s one big problem that takes the glamour out of influencing: getting paid. That’s where a new wave of ‘fintechs for influencers’ come in. In the past 12 months, US startups like Willa, Archie and Karat Finance have popped up to streamline freelancers’ payments, backed by big investors like EQT. Read more
MassMutual doubles down by partnering with NYDIG to grant institutions access to bitcoin - The insurance broker has entered into a “placement agent agreement” with NYDIG. Through its broker-dealer, MML Investors Services (MMLIS), MassMutual will offer qualified customers access to a Bitcoin fund, providing “an alternative and efficient way to invest” in the primary cryptocurrency. Read more
Fintechs: Geru and Rebel want 5% of the Brazilian personal credit market - Portfolio company OpenCo was featured in a top Brazilian media outlet, highlighting that its credit origination for 2021 is expected to reach approximately $1b BRL. Read more
Courtney McColgan - Personal confidence and chasing gigantic opportunities - Portfolio company Runa HR's CEO & founder - Courtney McColgan - was featured in the Cracks Podcast, by Oso Trava and presented by Amazon Music Unlimited. Read more
Fintech Goes Global
Buffett-backed Nubank hires investment banks to lead IPO - Nubank, the Brazilian digital bank backed by Warren Buffett's Berkshire Hathaway, has hired Morgan Stanley, Goldman Sachs and Citigroup to help lead its U.S. initial public offering, a source familiar with the matter said on Monday. Read more
Is Africa fintech's next frontier? - Despite a large youthful, digitally savvy population and growing mobile usage, Africa has lagged behind even its emerging market peers, like Latin America, when it comes to venture capital activity. But the African fintech market has been accelerating, with startups securing around $330.5m in H1 2021, more than double the amount raised the entire year before, according to a report from Disrupt Africa, a tech-focused research and news organization based in the region. Read more
Kavak announces four global tech centers in Mexico, Brazil, Argentina. - Mexican startup Kavak, Mexico's first unicorn, announced on Tuesday four new global tech development centers with headquarters in Mexico, Brazil, and Argentina. The company plans to hire more than 500 software developers engineers in Latin America. Read more
Mexican SMB fintech Credijusto could be listed on NYSE this year - Mexican fintech, Credijusto announced that it is in talks to go public via a SPAC merger with Tidjane Thiam’s Freedom Acquisition I. The deal is reported to be valued at $1.5b and follows Credijusto's acquisition of Banco Finterra. Read more.
Softbank Group's commitment to Latin America is paying off - In its quarterly report, Softbank showed that investments in Latin America returned JPNY219b (about US $1.98b) in profit in the three months to the end of June 2021. Highlighted in the report was a shift to focus on Latin America and away from investments in China. Read more
Industry News
The blockbuster Lionel Messi deal is triggering an unlikely rally—in crypto - Created in January 2020, the Paris Saint-Germain Fan Token was conceived as a high-tech way to build a new fan community. The holders of the tokens can interact regularly with the club through instruments like online polls that gamify the fan experience. It was never designed to be an investment vehicle. The crypto community, apparently, didn’t get the memo -- when this week a bidding war broke out for the PSG tokens, sending the value up more than twofold at one point. Read more
Robinhood stock gains on $140m Say Technologies takeover deal - The all-cash deal will bring Say into the Robinhood architecture, the company said, allowing the pair to "find new ways to expand what it means to be an investor through new products and experiences that democratize shareholder access." Read more
Poly Network hacker returns nearly all of the $611m in stolen funds - The funds were stolen in the largest DeFi hack to date on August 10. They were hijacked from Poly Network, which is a cross-chain protocol that lets crypto users swap tokens among blockchains. At this point, the only funds the hacker hasn't returned are the $33m in USDT that were frozen by Tether following the exploit. These can't be moved until Tether authorizes it but the company is working on it. Read more
U.S. Bank to acquire small business payments software company, Bento Technologies - The acquisition is part of the vision at U.S. Bank to bring payments and banking services together to simplify cash flow and money management for small businesses. Read more
Circle announces plans to become a national digital currency bank - In a blog post on the company’s website, CEO Jeremy Allaire says Circle intends to become a “full-reserve national commercial bank, operating under the supervision and risk management requirements of the Federal Reserve, US Treasury, OCC, and the FDIC”. Read more
Ether trading volumes surpass bitcoin on Coinbase for the first time as DeFi and staking hype grows - Coinbase said the growth in ether trading was driven by interest in decentralized finance (DeFi) and non-fungible tokens (NFTs), two crypto applications that commonly use the ethereum blockchain. Coinbase said the launch of its ethereum staking product also spurred ether trading on the platform. Read more
Venmo to allow credit card holders to automatically buy cryptocurrency with their cash back - Unlike when buying cryptocurrency directly, these automated purchases will have no transaction fees associated with them — a feature Venmo says is not a promotion, but how the system will work long term. Instead, a cryptocurrency conversion spread is built into each monthly transaction. Read more
Brian Brooks quits as CEO of crypto exchange Binance.US - The resignation is the latest blow for Binance, which has come under scrutiny from regulators in several countries this summer. Mr. Brooks had been an acting head of the Office of the Comptroller of the Currency under the Trump administration, where he had been dubbed the CryptoComptroller for his friendly attitude toward the sector. His hiring was seen in the industry as a win for Binance.US, the U.S. affiliate of Binance. Read more
A millennial-focused asset manager backed by Will Smith and Kevin Durant just launched an actively managed crypto fund - Titan, the fintech startup pitching mobile-first active management to millennials and Gen Z, launched a crypto fund on Wednesday as mainstream interest in the asset class builds. Read more
Select Financings
Canopy Servicing - Hawaii based loan software startup raised $15m in Series A funding led by Canaan. Read more
CoinDCX - India based crypto exchange raised $90m in Series C funding led by B Capital. Read more
Divvy Homes - San Francisco based proptech startup raised $200 million in Series D funding led by Tiger Global Management and Caffeinated Capital. Read more
FalconX - San Francisco based digital assets and cryptocurrency trading platform raised $210m in Series C funding led by Altimeter Capital, Sapphire Ventures, B Capital Group and Tiger Global. Read more
FreshBooks - Canada based cloud-based accounting software company raised $80.75m in Series E funding led by Accomplice. Read more
Gusto - San Francisco based benefits, payroll, and HR software provider raised $175m in Series E funding led by T. Rowe Price. Read more
Jerry - San Francisco based car-ownership super app and insurance comparison site raised $75m in Series C funding led by Goodwater Capital. Read more
Kroo - London based provider of banking services with social features raised $24.5m in Series A funding led by Rudy Karsan. Read more
Liquality - New York based crypto wallet raised $7m in new funding led by Hashed and Galaxy Digital. Read more
Moove - Nigeria based mobility fintech company raised $23m in Series A funding led by Speedinvest and Left Lane Capital. Read more
Pave - San Francisco based compensation platform for companies to manage wages raised $46m in Series B funding led by YC Continuity. Read more
Pintu - Indonesia based crypto exchange raised $35m in extended Series A funding led by Lightspeed Ventures. Read more
TaxBit - Utah based crypto tax and accounting software provider raised $130m in Series B funding led by IVP and Insight Partners. Read more
Trust - Los Angeles based corporate card startup to help small businesses with marketing investments raised $9m in Seed funding from Lerer Hippeau, Lightspeed Venture Partners, Upfront Ventures, and Upper90. Read more
Upgrade - San Francisco based fintech company that offers affordable credit to consumers raised $105m in Series E funding led by Koch Disruptive Technologies. Read more
XpertSea - Canada based company focused on developing efficient technology and financial solutions for the seafood industry raised $20m in Series B funding led by QED Investors and Atlantico. Read more
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