BlackFin Tech weekly — January 22nd, 2024
Every Monday, we publish a short digest which sums up last week’s Fintech activity
Greetings, Fintech Aficionados!
Happy Monday vibes to all as we bid adieu to the weekend.
Let's plunge headfirst into the captivating world of fintech updates and revelations:
In the past week, Europe witnessed the orchestration of 9 deals, raking in a total of €153.6 million. The financial ballet unfolded with five performances in the UK, two acts in France, and one each in Germany and Italy.
A standing ovation is for Flowdesk, the French virtuoso in prop trading & market-making for digital assets. Bravo to them for orchestrating a loud €45.8 million in a Series B funding round, with Cathay Innovation taking the lead baton. A round of applause also for 10X for raising €40.6 million, with BlackRock leading the applause.
Last but not least, a tip of the hat to Vertice, the platform that enables organizations to enhance their oversight and management of software and cloud expenses. Cheers to their triumphant €22.9 million raise, conducted by Bessemer and 83North
Let’s dive in
Flowdesk, a Paris-based full-service digital asset trading technology company, raised $50m in Series B funding. The round was led by Cathay Innovation with participation from Eurazeo, ISAI, Speedinvest, BPI and Ripple. The company intends to use the funds to consolidate its position as a service provider, as well as to expand its OTC offering, and its regulatory coverage in Singapore and in the US, opening offices in financial hubs and making key hires. Led by Guilhem Chaumont, CEO, and Co-Founder, Flowdesk is a full-service digital asset trading technology firm that offers market-making, OTC, and treasury management solutions to crypto projects, exchanges, and institutions. Its Market Making as a Service (MMaaS) is a product that lets token issuers utilize the company’s low-latency trading infrastructure and global team for liquidity provision while keeping full control of their treasury. Founded in 2020, Flowdesk is based in Paris with offices in Singapore and North America.
Banking tech provider 10x Banking has raised £35m from its existing investors BlackRock and JPMorgan Chase in its first funding round since 2021. 10x Banking said the funding would help it capitalize on the momentum in the core banking market, which it has been serving since 2016 when the business was founded by former Barclays group CEO Antony Jenkins and it is also used to expand to the Asia Pacific (APAC) region. The company’s technology platform was used by JP Morgan to launch its Chase challenger bank in the UK, and 10x Banking expanded into Australia and New Zealand in 2023 with “more strategic expansions on the horizon” teased by the company today. 10x Banking last raised funding in June 2021 when it closed a $187m Series C round, led by BlackRock and Canada Pension Plan Investment Board, with Nationwide, Westpac and China’s Ping An Group participating. Along with the funding 10x Banking also announced the appointment of new chief revenue officer Matt Mills, who joins the fintech from fraud and financial crime tech provider Featurespace.
Vertice, a London, UK-based provider of a SaaS and cloud spend management platform, raised $25M in Series B funding. The round was led by 83North and Bessemer Venture Partners. The company intends to use the funds to further accelerate its pace of product innovation and its worldwide expansion. Founded by brothers Roy and Eldar Tuvey, Vertice is an integrated SaaS and cloud spend management platform that, built for finance and procurement leaders, gives businesses control and visibility of their SaaS and cloud spending. Today, the company manages over $1.1 billion in contract spending for hundreds of customers in over 30 countries. To support its growth plans and growing customer base, Vertice will create over 150 new positions in 2024 across the US, EMEA, and APAC, and will also be investing in its platform to solve more of its customers’ needs, including expanding functionality to help customers better optimize their clouds and radically streamline their technology stack. The company is headquartered in London with offices in New York, Sydney, and Brno.
In addition to this week’s fundraising activity, here is the European M&A activity of the week:
Getsafe, Europe’s leading neo-insurer based in Germany with over 550,000 customers, has acquired deineStudienfinanzierung, Germany’s number 1 digital platform for student loans. This acquisition is a testament to Getsafe’s direct-to-consumer approach and the company’s focus on guiding young people as they plan for their futures. Getsafe differentiates itself from most traditional insurers and insurtechs alike by adopting a direct acquisition model that bypasses the need for brokers. Recognizing the associated costs, Getsafe focuses on building proprietary customer access and developing a customer relationship before they consider their first insurance product. Since launching in 2018, deineStudienfinanzierung has been a pioneer and market leader for digital student loans, having assisted over 200,000 students to receive over €1 billion in study financing. It will continue to operate as a standalone business within the Getsafe ecosystem. The acquisition of deineStudienfinanzierung marks another milestone in Getsafe’s journey, solidifying its position as a forward-thinking insurtech dedicated to enhancing the financial well-being of individuals. This acquisition follows Getsafe’s recent acquisition of the German business of the French insurtech Luko.
Encompass Corporation, the global provider of real-time digital Know Your Customer (KYC) profiles, has acquired CoorpID and Blacksmith KYC from ING to develop a market-leading platform that solves the critical challenge of identification and verification of corporate and institutional clients. In 2018, CoorpID was founded by ING Labs in response to complex KYC challenges that ING and the wider market faced. CoorpID allows global banks to automate outreach and gather private KYC data directly from corporate banking customers, providing a repository that allows any business to manage all their banking relationships. For large multinationals, the platform makes it easy to store and structure KYC company documents and enables sharing with banks and business partners. CoorpID today services over 500 multinationals across Europe, helping them to collate, manage, and share relevant corporate data. CoorpID enables Encompass to build a complete KYC profile, combining authoritative public information with private information directly from customers. This, for the first time, presents financial institutions with a full Corporate Digital Identity (CDI) - providing a unified source of truth and unrivaled visibility into risk. It crucially enhances Encompass' efforts to solve the key issue of customer outreach for financial institutions. Through this complete customer profile, the need for unnecessary outreach is eliminated. The result is a faster, slicker experience without compromising on robust compliance. This is complemented by another acquisition from ING, which sees Blacksmith KYC also join Encompass.
And finally, here are the news that caught our eye last week:
French insurance company Luko is undergoing judicial proceedings due to financial difficulties. Five companies, including Allianz Direct, submitted acquisition offers before the January 8 deadline. Allianz Direct's €4.3 million offer has been chosen as the preferred bid. The official confirmation is expected on January 24. The offer includes acquiring about 100 employees and approximately 250,000 multirisk home insurance contracts. Allianz Direct's successful bid may lead to concerns among Allianz France's general agents, who previously questioned potential pricing strategies and their impact on their business dynamics.
German bank N26 is launching a new stock and ETF trading feature, starting in Austria, as part of its renewed focus on core markets, including Germany, France, Spain, and Italy. The move to add stock trading is aimed at increasing the average revenue per user, with N26 partnering with Upvest for the feature. The company is targeting premium subscriptions by offering a limited number of free trades to premium customers. While it significantly increased revenue in 2023, it still reported a €100 million loss for the year, with plans to achieve monthly profitability by the second half of the current year.
ECB President Christine Lagarde stated that the European Central Bank might begin reducing interest rates this summer, contingent on the latest economic data. The ECB, which had initiated an unprecedented cycle of interest rate hikes to counter inflation, paused in October after ten consecutive increases. While inflation is deemed to be "on the right track," Lagarde emphasized that interest rates have peaked. The ECB will maintain a restrictive policy for as long as necessary to ensure that inflation does not exceed 2% in the medium term.
US Construction-focused startup Briq has secured $8 million in an extension round at a $150 million valuation. The company uses AI, including generative automation bots, to automate financial workflows. Briq has seen 40% annual recurring revenue growth in 2023 and implemented a cost-reduction strategy, reducing its workforce by 45%. The funding will be used to enhance its technology, expand into new geographies, and explore conversational AI in financial transactions. Briq, with nearly 400 customers, plans to focus on non-English-speaking emerging markets in Europe, the Middle East, and Asia as part of its expansion strategy.
Have a great week & see you soon!