Fintech venture investing needs fresh data!

Welcome to the first Dealroom weekly fintech newsletter! Subscribe here for updates. Tell a friend!

I’m Lorenzo, fintech specialist at Dealroom and I’ll be writing weekly about key news and events from the startups reshaping the global financial system, taking a deep dive each week into Dealroom rich data on the sector to identify important and sometimes counterintuitive trends. If you’d like to help us surface the freshest fintech data and insights, we’d love to hear from you.

Buy Now, Worry Later?

The idea behind Buy Now Pay Later (BNPL) - allowing consumers at the point of sale to split the payments into smaller, more “affordable” instalments - isn’t really a new one. So why all the buzz?

Well, BNPL is now revolutionizing the customer journey by being seamlessly integrated into e-commerce as a checkout option. Basically, it’s making it really easy. Adoption is booming, particularly among Gen Z and Millennials. 

Beyond competing with credit cards, BNPL is actually taking on payments as a whole, credit and debit. Companies like Klarna run the full checkout facility for their partners, not just a credit plugin. With online retail growing as a proportion of basically every vertical, payments and easy credit look like a lucrative combo. 

At least VCs seem to think so. Funding in BNPL has grown from just €150M in 2016 to €3.5B in 2021 YTD. There are now 170+ startups competing in the BNPL space, with new players being born every month. But what are the social and regulatory impacts for such easy credit access? And are we in a BNPL bubble that's set to burst?

Read our full report on BNPL

In other news

💹 “Payments for order flow is undoubtedly an amazingly good thing for retail investors and they are not going to ban it?” - Robinhood chief legal officer, interview for CNN discussing SEC future actions

👎 “Why the recent headlines on Alipay get it tragically wrong?” - Richard Turrin, China Fintech expert, via Linkedin

🛑 “How China Evergrande's debt troubles pose a systemic risk” - Reuters deep dive on the massive scale of Chinese shadow banking

⛓ “Google Takes Giant Step Towards Powering Blockchain-Based Web 3.0” - Forbes

🤝“India and Singapore to link their payments systems to enable ‘instant and low-cost’ cross-border transactions” - Techcrunch.

Latest fintech deals:

The largest this week:

🇬🇧 Prodigy finance, a cross-border lending platform for talented international students, raised $750M to expand into India, China, South Korea and Singapore. Its founders started the company after meeting at Insead’s MBA in 2006. Explore all Insead alumni founded companies such as Nubank.

🇺🇸 SpotOn, a provider of mobile payment technology and management system for restaurants and small businesses, raised a $300M Series E at a $3.15B valuation led by Andreessen Horowitz. The funding will finance the acquisition of Appetize for $415M.

🇺🇸 🇮🇱 Papaya Global raised $250M at a $3.7B valuation, 4x in just 5 months. It provides a cloud-based HR and payroll platform for managing and paying all types of global workers in full compliance, from onboarding to payments, in over 140 countries.

🇺🇸 🇮🇱 Melio raised $250M at a $4B valuation, 3x in just 8 months. The SME B2B payments company thrived thanks to the digitalization of vendor payment operations and cash flow management.

Other promising fintech deals from around the globe:

🇮🇩 Xendit raised a $160M Series C becoming Southeast Asia's 37th Unicorn. It provides an API-based technology to process payments, run marketplaces, disburse payroll, and detect fraud.

🇺🇸 SellersFunding, a payment technology company for e-commerce sellers, raised a $166.5M Series A mix of debt and equity.

🇬🇧 Envelop Risk, provider of data-driven underwriting and risk analytics for cyber insurance, raised $130M Series B. Discover more on cyber insurance.

🇨🇦 Neo Financial raised a $64M Series B, bringing its total fundraising to $114M in just over a year. Calgary-based Neo has grown its consumer banking focusing on partnership with retailers and merchants for discounts and loyalty programs and it’s now eyeing mortgages. Discover 240 challenger banks globally.

🇳🇱 Ohpen, cloud-based core banking software, raised $30M from Deutsche Bank.

🇺🇸 Self financial raised a $50M Series E, this is the third raise for the company this year, for a total of $110M. The company mission is to make building credit accessible for the 100+ million Americans that have no credit or low credit scores.

🇺🇸 Keeping with the BNPL space this week. Ascend raised a $5.5M Seed round to provide a BNPL option for commercial insurance. Watch out for the B2B BNPL space.

Read up on all the latest fintech deals in Dealroom.co 

Notable exits:

🇺🇸 Intuit acquired leading email infrastructure company Mailchimp for $12B, to become a one-stop shop for small businesses from marketing and financial data to inventory spending and campaign planning. Mailchimp becomes the most valuable exit of a bootstrapped company ever.

🇺🇸 Goldman Sachs is buying consumer fintech lender Greensky for $2.2B. The acquisition will strengthen its digital initiative Marcus, which aims to become the leading consumer banking platform of the future.

🇺🇸 🇮🇱 Pagaya Technologies, an artificial intelligence network that helps lenders make better decisions, is going public through SPAC at a $9B valuation. Pagaya joins several other lenders going public through SPAC such as Sofi and Better Mortgage.

Read up on all the latest fintech exits in Dealroom.co 

Tip of the week

Discover 450+ exceptional fintech founders turned angel investors, including Affirm CEO Max Levchin, Wise founder Taavet Hinrikus and many others. If you are looking for someone with real experience in the field to raise early capital from, or co-invest with, check them out!

Jobs

Revolut is hiring a Head of Lending in Paris, along with other 283 roles

Explore 2794 jobs at European fintech unicorns.

Dive in

🔎 Fintech curated content

🦄 379 fintech unicorns and $1B exits

Lorenzo Chiavarini

Innovation Analyst
Dealroom

About this newsletter

This is Dealroom's weekly fintech newsletter.  You can subscribe here to get more industry-specific intelligence on the evolving world of fintech, emerging trends, and game-changing startups. Delivered on Wednesdays.