The Buy Now, Pay Later (BNPL) sector has become increasingly visible in the last few years with companies like Klarna and Afterpay offering consumers forms of credit to expedite their purchases and break up payments over an extended period of time.
Along with customers, BNPL startups have also won over private investors.$5.2B was raised by BNPL startups in 2021, 2.7x the previous year's total. There have been more megarounds in 2022 for the likes ofAlma,Akulaku and Klarna is reportedly looking at a$60B valuation with their next round. Yet like many tech stocks, shares of listed BNPL players have taken a hit in recent months.
One of the top earners in the BNPL market, Affirm, lost another 23% after an early earnings announcement which signalled increased losses, was released by mistake. Compared to its peak in November, Affirm is down 72%. Fintech expert, Jason Mikula, proposed in Fintech Business Weekly's newsletter whether Goldman Sachs should snap up Affirm to acquire its huge consumer and merchant base, as well as better BNPL functionalities.
Affirm is not the only business facing losses this quarter. Other noteworthy BNPL companies are struggling through a downward turn with Zip down 78%, Sezzle down more than 80%, and more.
Will other BNPLs match mega-earners like Klarna, or are Affirm's losses a warning of what could be an ongoing trend for the sector? Stay up to date on the latest BNPL startups and companies by tracking the ever-evolving BNPL market landscape.👇
👀 Forbes receives funding from crypto exchange Binance - Forbes.
👎 FCA orders investment platform Freetrade to remove social media posts - FT.
📈 Klarna valued up to $60B in new funding - PYMTS.com.
🚀 Coinbase went from 186th place to 2nd on the App Store after its Super Bowl ad - AppAnnie. This year's Super Bowl was flooded with crypto ads including FTX, eToro, Crypto.com and Coinbase
Latest fintech deals:
Thelargest this week
🇬🇧 FNZ, the global wealth management platform, raised $1.4B in new equity funding from Canada Pension Plan Investment Board and Motive Partners, reaching a $20B valuation. FNZ works with 650 financial institutions to empower over 20 million people from all wealth segments, including savings and retirement, affluent, and high-net-worth, to create wealth through long-term investment.
🇧🇷 BBVA to invest $300 million in Brazilian digital bank Neon. The leading Spanish banking group now owns almost 30% of the company.
🇵🇭 Tonik Financial, the first Digital Bank in the Philippines, closed a $131M Series B led by Mizuho Bank, which is one of the largest Japanese banking groups and a Top 10 bank by assets in the Asia Pacific region.
🇫🇷 Alma, which is trying to build a new BNPL giant in Europe, has closed a €115 million Series C and a €95M debt financing. Alma processes more than €1 billion annually with its current run rate and doesn’t charge late payment fees, as the company believes it doesn't align with consumers’ interests.
Other notable deals from around the globe: 🇿🇦 South African API fintech Stitch raised $21M in Series A funding. It enables businesses to build, optimize, and scale financial products. Stitch is looking to go beyond Open Banking to create a “financial graph” ecosystem across African-connected bank accounts, merchants, fintechs, and end-users. Fintech continues to dominate VC funding in Africa, with over $2.4B since last year.
🇬🇧 Parametric insurance startup Floodflash raised a $15M Series A led by Buoyant Ventures and featuring Munich Re Ventures. FloodFlash is planning to expand to the US, Germany, Australia and Japan in its mission to close the $58B flood protection gap.
🇺🇸 Sardine raised a $19.5M Series A from Andreessen Horowitz and NYCA to set a new standard in Fraud Prevention. The startup offers AML to neobanks, crypto exchanges and NFT platforms.
🇺🇸Happy Moneyjoined the fintech unicorn club with a $50M Series D-1 at a $1.1B valuation led by Anthemis Group and CMFG Ventures. Happy Money develops financial tools with members' best interests at heart, including its Payoff Loan, which helps members consolidate, pay off credit card debt and experience less financial stress.
🇺🇸 Financial technology leaderFIS has acquired Payrix to enhance its embedded payments and finance experiences for SMBs in any industry, accelerating the company’s fast-growing e-commerce business. Payrix specializes in providing embedded payments solutions to SaaS-based platforms to serve SMB e-commerce merchants.
Tip of the week
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