BlackFin Tech weekly — January 8th, 2024
Every Monday, we publish a short digest which sums up last week’s Fintech activity
Good afternoon and Happy New Year, fintech friends!
We trust you've had a lovely weekend.
Let's dive straight into the latest insights and updates that the fintech landscape has to offer:
Since our last newsletter on December 12th, we saw 24 deals in Europe for a total amount of €188.2m raised officially with thirteen deals in the UK, five in France, two in Sweden, two in Switzerland, one in Germany, and one in Luxembourg.
Congratulations to Hyperexponential, the London-based fintech specializing in pricing modeling software for specialty and commercial insurance, who has successfully raised €32 million in a Series B funding round. Well done to UK-based Updraft, offering a lending, credit report, and financial planning app for having secured €25,4m. Finally, we want to congratulate Pivot, the French procurement platform, for successfully raising €20m by Visionaries, Emblem, and Anamcara!
Let’s dive in
Hyperexponential raised $35 million in its Series B on January 4, 2024. With its flagship product Renew, the company offers insurers a web-based data pricing software designed to ease the work of underwriters in commercial and specialty insurance by bringing them into a one-stop shop tool. The company's software combines deep, practical actuarial pricing experience with software engineering expertise for the deployment of statistical pricing and analytical models that calculate prices and avoid useless data re-entry. Investors in the round are not yet disclosed.
In its recent financing round, the UK-based fintech firm Updraft successfully obtained a substantial venture round investment of £272 million. The company, which specializes in consumer lending, highlighted that this investment will support its goal "to build on its mission to help UK households move away from expensive credit cards and overdrafts." A key component of this investment is a £250 million forward flow deal with Jefferies Financial Group and Santander Corporate and Investment Banking. Alongside this arrangement, Updraft has also raised an extra £22 million through mezzanine and equity funding. This influx of capital is crucial for the completion of a £200 million balance sheet facility, which is set to significantly propel the company's expansion in 2024. Prominent investors in this round include Quilam Capital, MoreThan Capital, LC Nueva AIF, and Auluk Investments. Updraft, which utilizes superior risk models surpassing conventional credit risk models, has marked another strong year, growing its user base to 500,000. The fintech has been instrumental in helping users take charge of their financial health, assisting in the repayment of more than £225 million in credit card and overdraft debts. This new funding not only bolsters Updraft’s financial standing but also enables the company to enhance user experience: Updraft is gearing up to introduce novel features and expand into new customer demographics.
Founded earlier this year having raised €5m pre-seed in April, Pivot has announced its €20m Series A. Funding has come from its new and existing investors — in particular Visionaries, Emblem, and Anamcara. Pivot offers a modern spend management software solution that integrates with both existing ERPs and financial stacks as far as possible. Following this, admins can modify Pivot’s offerings to better suit their objectives so that it isn’t too complicated to use. This way, purchase order forms are easier to understand for employees as well. With this anticipated funding, Pivot plans to be much more ambitious in its growth and expansion. Co-founder and CEO Romain Libeau stated: We hadn’t planned to raise so quickly, and we still have most of the funds from the initial round. With another €20 million in the bank, we can change the plan and be much more ambitious on recruitment to build the vision of our product and get known faster’. Well done, Pivot!
In addition to this week’s fundraising activity, here is the European M&A activity of the week:
Global insurance group, Howden, has announced the acquisition of VLC & Partners Holding B.V. (VLC), one of the largest independent insurance brokers operating in the Netherlands. Once completed, the acquisition will help enable Howden to scale its existing operations in the strategically important Dutch market, which is hailed as being one of Europe’s major insurance markets. Currently, VLC is under the ownership of Dutch insurer, De Goudse NV, and management. Moreover, this acquisition follows from Howden’s recent entry into the Danish market with the acquisition of NORTH Risk. The completion of this acquisition is subject to regulatory approval and Works Council consultation. As part of the transaction, VLC’s management team will roll part of their equity share into Howden in support of the group’s capital model which places employee ownership at the heart of its culture.
ABN Amro acquires Amsterdam-based neobroker BUX, following its retreat from the UK market and 40 percent staff cuts. The acquisition will help ABN AMRO increase its market presence with younger investors. The acquisition price was not disclosed. ABN Amro Bank is a Dutch bank with retail and commercial banking contributing the bulk of its operating profit. The company said Bux has around 500,000 users in northern Europe. Bux was one of the first so-called "neo brokers" on the Dutch market, featuring a smartphone interface, small-scale stock trading, and zero commission on some orders. It raised $80 million to expand amid the pandemic trading boom from investors including Prosus NV and China's Tencent. According to its most recent annual report filed with the Dutch Chamber of Commerce, in 2022, Bux posted a loss of 16.0 million euros ($17.4 million) on revenue of 2.52 million euros. Dutch business paper FD quoted an ABN Amro executive as saying the bank would discontinue Bux's cryptocurrency offerings as part of the acquisition.
Informatica, which provides a set of tools to enterprises to analyze, manage, and share data across their organizations, is acquiring Privitar, a startup out of the U.K. that focuses on building and providing data access controls that was once valued at $400M to expand its data management stack. The acquisition will sit within Informatica’s larger data stack, which it sells as the “intelligent data management cloud.” Terms of the deal are not being disclosed. Privitar notably had raised over $150 million in funding since first being founded back in 2014, from investors that included Accel and Warburg Pincus as well as strategics like Salesforce, HSBC, and Citigroup. Its last valuation was over $400 million. But that was back in 2020, at the peak of the last tech fundraising and valuation cycle, when Privitar had last raised outside funding, an $80 million Series C led by Warburg Pincus. Valuations have seen a lot of downward pressure in the current market, and companies have found it a lot more challenging to close rounds even at less attractive terms.
And finally, here are the news that caught our eye last week:
HSBC is set to debut an international payments app called Zing, aimed at directly challenging the dominance of FinTechs like Revolut and Wise. Zing will initially be offered in the UK but will be quickly rolled out to the EU market in 2024. With a sign-up time for a new user of 3 minutes, Zing is poised to take on the worldwide retail payments market. The app will be open to non-HSBC customers as well.
Bunq, a major European challenger bank, has launched a Generative AI-driven platform that redefines user-centric banking, called Finn. Finn is aiming to transform how users interact with their banking app. Designed to replace traditional search functions, Finn offers a range of services from financial planning and budgeting to simplified navigation and transaction tracking. This announcement came along with news bunq hit 11 million users across the EU and grew its user deposits by 55% since July 2023, now at 7 billion euros.
Binance is facing over $2 billion in fines. The U.S. District Court has made a significant ruling against global crypto exchange Binance and its former CEO, Changpeng Zhao. The court has ordered Zhao to pay a hefty sum of $150 million. He has been accused of money laundering by the U.S. Commodity Futures Trading Commission Binance faces a dual financial repercussion: a fine of $1.35 billion in illegitimate transaction fees and an equal penalty amount, totaling an unprecedented $2.7 billion.
X (ex-Twitter) moves into payments space: Musk is moving forward with his plans to turn the company formerly known as Twitter, now called X, into an “everything app” that includes its own payments system. X is now authorized to carry out transfers in 12 states. Users can send money to others on the platform and extract their funds to authenticated bank accounts, and perhaps later, a high-yield money market account that would encourage people to keep their cash in accounts with X. This plan would put X into competition with PayPal.
Have a great week & see you soon!