BlackFin Tech Weekly — March 18th, 2024
Every Monday, we publish a short digest which sums up last week’s Fintech activity
Hello FinTech Enthusiasts,
Welcome back to our newsletter! It's always a pleasure to have you join us as we explore the vibrant world of European FinTech. In this edition, we're excited to bring you a curated selection of the latest updates, trends, and deals that are shaping the industry. So, without further ado, let’s jump in!
Last week we saw 11 official fintech deals in Europe for a total amount of 194m€ raised with 4 deals in the UK, 3 in Germany, 2 in the Netherlands, 1 in France, and 1 in Sweden.
Congratulations to PPRO, the E-commerce payments firm, who has successfully raised €85 million in their most recent funding round by investors including Eurazeo, HPE Growth, Sprints, PayPal Ventures, JPMorgan, Citi Ventures, and funds managed by BlackRock. Well done also to Eye Security, a Netherlands-based cybersecurity company, for having raised a €36 million funding round. The round was led by J.P. Morgan Growth Equity Partners with participation from existing investors Bessemer Venture Partners and TIN Capital. Lastly, we want to extend our congratulations to Griffin, a London-based banking-as-a-service (BaaS) firm for having raised $24 million co-led by MassMutual Ventures, Nordic Ninja, and Breega and also featured participation from previous investors Notion Capital and EQT Ventures.
Let’s dive in
E-commerce payments firm PPRO has completed a dual-tranche funding round totaling €85 million. The funding is provided by new and existing investors, including Eurazeo, HPE Growth, Sprints, PayPal Ventures, JPMorgan, Citi Ventures, and funds managed by BlackRock. The firm will use the fresh capital to pursue growth in key markets and further enhance its global network of local payment methods. PPRO enables businesses and banks to scale their local payment services through one connection. It helps these companies accelerate their roadmaps, boost conversions, and simplify local payments.
Eye Security, a The Hague, Netherlands-based cybersecurity company, raised €36M in Series B funding. The round was led by J.P. Morgan Growth Equity Partners with participation from existing investors Bessemer Venture Partners and TIN Capital. The company intends to use the funds to expand its presence in existing markets, such as the Netherlands, Germany, and Belgium, while also expanding across select European countries in 2024. The Dutch company protects small and medium-sized European enterprises from cyber threats and the high costs that follow after a successful attack. Eye Security says its goal is to unburden SMEs with an affordable all-in-one service that safeguards them against threats targeted to their industry. The company’s service combines endpoint monitoring with awareness campaigns, a 24/7 incident response strategy, and cyber insurance. Eye Security is well-positioned to benefit from the NIS2 Directive by the EU. The NIS2 Directive is the EU-wide legislation on cybersecurity. It provides legal measures to boost the overall level of cybersecurity in the EU. EU members must incorporate NIS2 into their national cybersecurity laws by 10/17/2024, which mandates strict breach reporting timelines. Non-compliance may result in fines of €10M or 2% of worldwide sales. The company’s solution is used by hundreds of customers in sectors including automotive, manufacturing, healthcare, financial services, and information technology.
Griffin, a London-based banking-as-a-service (BaaS) fintech, has raised $24m as it prepares to launch as a fully licensed bank, having secured a banking license in the UK. The round was co-led by MassMutual Ventures, Nordic Ninja, and Breega and also featured participation from previous investors Notion Capital and EQT Ventures. Founder David Jarvis says that the round increases the company’s previous $83m valuation but declined to share exact figures. Founded in 2017, Griffin provides technology for fintechs to create banking services — payments, savings, and deposits — without having to build them in-house. Griffin charges clients for these services on a subscription basis. As well as providing these products, the fintechs Griffin serves can also bank directly with the company through business accounts and credit options. Griffin's ability to offer these services with a banking license is notable, given that big-name fintechs such as Revolut have yet to obtain one. Other BaaS providers such as Railsr and Modulr also continue to operate on e-money licences.
In addition to this week’s fundraising activity, here is the European M&A activity of the week:
Open has announced the acquisition of So-Sure. Open is an Australian insurance company that specialized in embedded insurance products. It was founded in 2016 and is working with leading brands such as Bupa and Polestar to offer a range of embedded insurance products. So-Sure is an MGA with a focus on phone and content insurance. It has developed a proprietary model and an anti-fraud technology, which allows for an easy claim experience for customers and an improved loss ratio for insurance companies. Open aims to grow in the UK and in the European market with the acquisition of So-Sure as well as expanding its offerings.
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Malakoff Humanis has taken a majority stake in Betakorn, the holding company of KaribU and Gedeon. Malakoff Humanis is a French health insurance company with over €6bn in turnover and over 10,000 employees. KaribU Gestion is an Insurtech startup that was founded in 2020. It focuses on the management of retirement savings contracts on behalf of insurers. Gedeon is a digital broker specializing in B2B retirement savings products that was founded in 2022. With the acquisition, Malakoff Humanis wants to consolidate its position in the retirement savings market and exploit synergies with the two Insurtechs to drive forward its digital transformation.
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And finally, here are the news that caught our eye last week:
Klarna has launched open banking-powered settlements in the UK, allowing customers to make payments directly from their bank accounts rather than relying on debit cards. This development reflects the company's strong commitment to building a forward-thinking payments network. By implementing open banking settlements, Klarna aims to streamline and enhance transaction processes for consumers, offering increased security and providing valuable insights into spending patterns.
GoCardless has been approved as a supplier for Crown Commercial Service's Open Banking Dynamics Purchasing System framework. This approval allows GoCardless to bid for account information services (AIS) and payment initiation services (PIS) Requests for Tenders issued by any UK public sector entity utilizing the DPS. These entities include central government departments, local authorities, educational institutions, and charitable organizations.
Stripe's co-founders, John and Patrick Collison, have stated that the company is in "no rush" to go public, despite the anticipation surrounding its potential initial public offering (IPO). They emphasize that as a profitable business, Stripe has various options available and will wait for market conditions to stabilize before considering an IPO. Instead of going public, Stripe is exploring alternative ways for employees and early investors to cash out their stock, such as arranging private stock sales or tender offers.
A year on from Credit Suisse's rescue, banks remain vulnerable. There's now a regulatory debate in Switzerland on how to make emergency loans more widely available, especially considering the challenges faced by Credit Suisse in providing collateral to the Swiss National Bank. UBS's imposing balance sheet has prompted a review of too-big-to-fail rules, with concerns raised about the bank's systemic importance and potential risks to financial stability. Amidst these concerns, there's a call for regulatory reforms and enhanced monitoring, including monitoring social networks for early signs of bank runs.
Have a great week & see you soon!