BlackFin Tech weekly — November 20th 2023
Every Monday, we publish a short digest which sums up last week’s Fintech activity
Good afternoon, fintech aficionados! 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:
In the past week, we saw 11 deals in Europe for a total amount of €265.1m raised officially with four deals in the UK, three in The Netherlands, three in France and one in Spain.
Congratulations to Blockchain.com, the UK crypto exchange and wallet platform, on its €101.7m Series E with existing and new investors including Kingsway Capital, Lakestar, Lightspeed Venture Partners and Coinbase Ventures. Well done as well to Fnality, the provider of blockchain-based solutions for financial institutions, for raising a €89.8m Series B round, led by BNP Paribas and Goldman Sachs.
Finally, Madrid-based fintech Lynx, an AI developer for fraud-detection and AML, raised a €17.3m Series A round led by Forgepoint and Santander.
Let’s dive in
Blockchain.com recently closed a Series E funding round, raising $110 million, with a valuation less than half its previous valuation of $14 billion of March 2022 as reported by bloomberg.
The funding round was led by Kingsway Capital, a UK-based investment management firm. Other participants included Baillie Gifford, Lakestar, Lightspeed Venture Partners, Coinbase Ventures, and more.
Manny Stotz, the founder and CEO of Kingsway Capital, and Nicolas Brand, a partner at Lakestar, have joined Blockchain.com's board of investors following the funding round.
Blockchain.com faced challenges, including a $270 million loss due to the collapse of the crypto lender Three Arrows Capital in 2021. As a result, the company had to lay off 25% of its staff, close its Argentinian office, and reduce CEO compensation in July 2022.
In January, the exchange had laid off more than 28% of its workforce.
It's worth noting that Bitcoin's price has shown significant fluctuations, going from under $20,000 in October 2022 to above $35,000 at the time of this funding.
Fnality, a FinTech specializing in blockchain-based solutions for financial institutions, has successfully raised £77.7 million in a Series B funding round.
The funding round was led by prominent financial institutions, including Goldman Sachs and BNP Paribas. Notable participants also included DTCC, Euroclear, Nomura, WisdomTree, and Series A investors such as Banco Santander, BNY Mellon, Barclays, CIBC, Commerzbank, ING, Lloyds Banking Group, Nasdaq Ventures, State Street, Sumitomo Mitsui Banking Corporation, and UBS.
This latest funding round brings Fnality's total capital raised to £132.7 million, as the company prepares for the launch of its initial Sterling Fnality Payment System (£FnPS) operations in the end of 2023, pending regulatory approval.
Fnality intends to utilize the fresh funding to continue its efforts in establishing a world-first global liquidity management ecosystem. This ecosystem aims to empower new digital payment models in both wholesale financial markets and emerging tokenized asset markets.
Key milestones for Fnality include launching FnPS in major currencies like USD, fostering ecosystem and network growth, and providing a suite of use cases that will transform payments, settlement, and collateral management in global markets.
The successful execution of Fnality's solutions is expected to streamline processes, reduce costs, ensure regulatory compliance, and offer access to new markets while bridging the gap between traditional and decentralized finance in wholesale markets.
Lynx, a fintech firm specializing in fraud and financial crime prevention, has successfully raised £15 million in a Series A funding round.
The Series A round was led by Forgepoint Capital, and it included participation from Banco Santander, a current stakeholder in Lynx.
Lynx, founded 20 years ago by Carlos Santa Cruz, a computer scientist and AI specialist who now serves as the company's CTO, utilizes AI and machine learning to detect and prevent financial crime and fraud across various sectors, including cards, digital banking, e-commerce, telephony, branches, and ATMs. This is achieved by analyzing behavioral patterns and assigning real-time risk scores.
Lynx claims to serve financial institutions in Europe, the UK, the US, and Latin America. Notable clients include Banco Santander and Cielo, the largest credit and debit card operator in Brazil. Lynx's solution processes a staggering 58 billion transactions and safeguards 300 million bank customers annually.
With the newly acquired funds, Lynx intends to support its global expansion initiatives and enhance its fraud and anti-money laundering (AML) platform. The goal is to provide comprehensive risk visibility and improve operational efficiencies.
The company has appointed Dan Dica as its new CEO. With over two decades of experience in fraud prevention, AML, and digital identity sectors, Dica is expected to play a pivotal role in scaling up the firm. He previously served as Senior Vice President of Global Sales at OneSpan and has worked with companies such as Vasco Data Security, WhiteStone, and UniSoft.
Congrats also to Silverflow, defacto, solvimon, levenue, Airfund and Qevlar AI for their fundraisings!
In addition to this week’s fundraising activity, here is the European M&A activity of the week:
Advent International has signed a deal to buy payments firm myPOS as part of the buyout group's latest push into digital payments. The fund will acquire the UK-based provider of payments services for small merchants through a new vehicle called Circle, a payments platform, that it plans to expand through further acquisitions. The transaction is expected to close by the end of the year, bringing the value of myPOS to around €500 million. Advent International is a global private equity firm ($92 billion AuM) with a diverse investment portfolio, focused on the financial services sector, along with healthcare, IT, and consumer industries. It operates across North America, Latin America, Europe, and Asia. myPOS was established in 2012 and works with 170,000 small businesses across transport, retail and hospitality in continental Europe, providing payments processing tools. It also provides merchants with a business account and card. With 500 employees across Europe, it is one of a small group of fast-growing companies, including PayPal Zettle and SumUp
Crastorehill, a company owned by Finch Capital, has successfully acquired two prominent open banking players as part of their buy-and-build strategy. Crastorehill is a Warsaw based financial technology provider that builds data analytics products for the financial sector. Terms of the deal were not disclosed, however Crastorehill has strategically acquired Qwist and ndgit, aiming to leverage their combined strengths and reinforce their position in the burgeoning market. The company aims to acquire other Open Banking providers to help enhance its product suite, geographical coverage and big data and artificial intelligence capabilities. Qwist develops a digital finance platform aimed at simplifying the fragmented open banking landscape. Their cloud-based system uses machine learning to analyse financial data, helping clients enhance customer engagement and streamline financial integration, all while cutting costs and complexity. ndgit developed an open banking platform connecting financial service providers with their digital partners to facilitate the new era of embedded finance.
And finally, here are the news that caught our eye last week:
PensionBee, an online pension provider, moved into sustainable profitability in October 2023 with assets totaling nearly £4 billion. The company's growth is fueled by a growing customer base, strong net inflows, scalable technology, and cost discipline, positioning it for future profitability in 2024.
Metro Bank has been added to the Financial Conduct Authority's financial crime watchlist due to concerns over its financial crime controls and risk management. The bank's rescue deal, including a substantial capital raise and debt refinancing, aims to address these issues, with the stake of a major shareholder set to increase significantly.
Moody's has issued a bleak assessment of the buy now, pay later (BNPL) industry, citing fierce competition, regulatory hurdles, economic difficulties, and sustained losses. The report suggests that many BNPL companies may deplete their equity if losses continue and new investments are not secured, with only a few expected to remain independent, while others face acquisition or closure.
Revolut is increasing monthly fees for its premium plans in the UK, offering additional benefits such as lifestyle app subscriptions. The price adjustments, the first since the fintech's UK launch five years ago, aim to provide more value to subscribing customers while allowing existing customers to lock in their current plan pricing for a year.
Have a great week & see you soon!