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Issue #130: eToro Acquires Spaceship, Adyen Adds Klarna At Checkout, And Alan Hits $4.5B Valuation
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eToro expanding in Australia with $55 million acquisition of investment app Spaceship, CTech
🏃♂️ The Rundown: eToro is acquiring Australian investing app Spaceship for approximately $55m, enhancing its presence in Australia and expanding its long-term savings offerings.
🥡 Takeaway: For the uninitiated, Australia has a mandatory retirement savings system called superannuation (referred to as simply “super” locally). Similar in intent to a 401(k) in the US but very different in execution, the system requires employers to contribute a percentage of an employee’s earnings to their super account. This has led to a massive pool of funds—$3.9 trillion as of March 2024—managed across various super funds.
Spaceship was once a prominent new entrant, but like many others that followed, it faced challenges as the superannuation market in Australia has proven tough to disrupt. The reality is many fintech startups looking to gain a foothold in the super industry have struggled to unseat the entrenched industry super funds.
Besides the giant pot of gold at the end of the superannuation rainbow, I wonder what eToro sees here. More broadly, it’ll be fascinating to see what eToro does with Spaceship to make the sticker price on the deal (although small) make sense.
Adyen to Include Klarna BNPL Offering on In-Store Terminals, Pymnts
🏃♂️ The Rundown: Klarna is partnering with Adyen to integrate its BNPL option into Adyen’s physical payment terminals across North America, Europe, and Australia. Starting with a pilot programme, this initiative aims to make flexible payment options more accessible at physical checkouts.
🥡 Takeaway: For those who remember, this is how many BNPL players first gained traction. Afterpay’s original go-to-market strategy involved working directly with retailers at the point of sale, and Square’s acquisition of Afterpay aimed to supercharge that kind of distribution magic to expand its reach. Similarly, Klarna has long been focused on the point of sale, so this isn’t breaking new ground in the BNPL world.
What’s more interesting here is Adyen stepping up its in-person payments game—likely to take on the growing ranks of PoS players in Europe and beyond. If you’ve been following funding news, you’ve probably noticed the steady influx of capital into this space.
Alongside the Klarna announcement, Adyen unveiled a new, flashy (drum roll, please) non-all-white PoS terminal. It seems innovation is happening in PoS—at least when it comes to terminal colour.
Bunq moves into stock trading, targeting digital nomads, Tech.eu
🏃♂️ The Rundown: Bunq, the Amsterdam-based challenger bank, is launching a stock trading feature called Stocks, aimed at digital nomads in Europe, starting with the Netherlands and France. The service will offer free trades for the first three months and access to popular US and EU stocks, with plans to expand to the UK pending regulatory approval.
🥡 Takeaway: It’s hard to imagine the EU retail stock trading space getting any more crowded. There must be some serious pent-up demand for trading stocks in the EU, but the sheer number of competitors is getting a bit ridiculous. Just last week, Revolut announced they’d be spinning out their stock product into a stand-alone offering called Revolut Invest. And don’t forget, Robinhood also recently set up shop in the UK.
I’m sure many of these players plan to ‘land’ with a stock trading product and then ‘expand’ into a more comprehensive investing platform. It’ll be interesting to see who can stick around long enough to reach that promised land.
PNC and Plaid ink data sharing agreement, Finextra
🏃♂️ The Rundown: PNC Financial Services Group and Plaid have formed a data-sharing agreement that allows PNC customers to securely connect and share financial data with third-party applications via Plaid.
🥡 Takeaway: In the world of open banking, players have tended to either play on the ‘compete’ or ‘comply’ side of the ledger. We tend to think of Plaid, MX, Truelayer et al. as being all that exists in the world of open banking, but there are also all the consultants and integrators who sit on the ‘comply’ side and work with banks in regulated open banking markets.
As all you fintech nerds know, the US is slowly (and I imagine it will be very slowly) working toward a regulated open banking market. As that day approaches, banks will need to shift into overdrive to comply. Like many others, Plaid is positioning itself as a key player in helping banks open up their data once Dodd-Frank Section 1033 is finalised.
Although it’s under-discussed, expect this to be the next wave of activity as open banking in the US as opening banking startups look to partner with the 4,500+ banks that will need to ‘comply’.
MercadoLibre's fintech arm applies for banking license in Mexico, Yahoo Finance
🏃♂️ The Rundown: Mercadolibre's fintech arm, Mercado Pago, has applied for a banking licence in Mexico to expand its financial services and aim to become the largest digital bank in the country. The licence would enable Mercado Pago to offer savings and checking accounts, loans, and mortgages, enhancing its current offerings as the second-largest digital wallet in Mexico.
🥡 Takeaway: In some ways, this move is the equivalent of a fintech Rorschach test—what you see depends on your perspective on the role of banking, who should own that customer relationship and (importantly) where in the world you are. In many markets, that relationship might be with a bank, a telco (e.g., in many parts of Africa), or even an e-commerce-focused company (think Ant Financial in China).
Nik Milanovic's Tweet summarises it well:
For the Americans here - this is as if Amazon or Shopify applied to be a bank. (Which Walmart did 15 years ago)
It may seem odd to Americans, but in many parts of the world, this is actually quite the norm.
Digital debt collector worth $350m after big money raise, Australian Financial Review
🏃♂️ The Rundown: InDebted, the Australian digital debt collection company, announced a $60m funding round, achieving a valuation of $350m. The round was led by Airtree, with participation from the Australian Retirement Trust and Premier Capital Partners.
🥡 Takeaway: It’s fascinating to see a fintech startup thriving in such a challenging macro environment. Many have struggled over the past year and a half as the ZIRP era ended and investors tightened their chequebooks. Meanwhile, consumers have been hit by rising interest rates and increased cost-of-living pressures. This has led to an uptick in business for InDebted. According to the article, the digital debt collector has experienced 110% annual growth since its founding in 2016, with $38m in revenue this year and $48m in ARR.
A solid reminder that, in the world of fintech (and startups in general), timing is everything.
Health insurance startup Alan reaches $4.5B valuation with new $193M funding round, Techcrunch
🏃♂️ The Rundown: French health insurance startup Alan last week announced they’d closed a $193m Series F funding round led by Belgian bank Belfius, raising its valuation to $4.5b. The partnership with Belfius will help Alan expand its customer base in Belgium, adding to its over 650,000 covered individuals and aiming for €450m in annual recurring revenue.
🥡 Takeaway: Consumer insurtech is back! Just as challenger banks have gone from heroes to pariahs and back, consumer-facing insurtech startups are experiencing a similar resurgence. Once dismissed as a failed experiment that highlighted the importance of broker channels, consumer insurtech is now regaining momentum.
Funding is flowing back into the segment—Q2 of this year saw insurtech startups raise $1.27 billion, the highest level since Q1 2023—and companies like Alan are benefiting from this renewed interest. The real question is whether this is just a short-term bounce, driven partly by rising premiums from incumbents, or the beginning of a sustained trend.
Financial Plumbing with Patrick McKenzie and Erik Torenberg, Upstream
If you’re a Patio11 fan and a fintech nerd, this podcast is a must-listen. On this episode of the Upstream Podcast, he chats with Erik Torenberg about the intricacies of the banking system — covering everything from bank customer service (referencing his banger of a piece, Seeing Like a Bank) to the challenges of KYC/AML. Definitely add this one to your podcast playlist for the week.
How Branch Confidently Lends to People Banks Won’t Touch — Matt Flannery (Founder, CEO of Branch), Crafted Podcast
While the discussion is framed around how Branch leverages AI, what stood out to me was Matt Flannery’s story of starting the company and the importance of timing. Launching Branch when financial inclusion was the hot topic in African markets and raising funds during the peak of ZIRP made for a fascinating listen on how it all began for the company. It's another one to add to your podcast rotation this week.
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I am curious why Adyen doesn't see a partnership with Afterpay as empowering its direct competitor - Square?