Issue #46: Flutterwave Becomes A Unicorn, Beeple Secures The Bag, And SoFi Buys A Bank
👋 Hi, FR fam. I hope you’ve all had a great week.
Welcome to another issue of Fintech Radar! It’s been another week of big funding rounds, M&A and yet another company looking to go public by way of a SPAC. Ok, let’s get into it, starting with this week’s news grab bag.
📣 The News Grab Bag
The most dominant fintech company in Europe is… Paypal ⚬ WolrdRemitt mulls listing at $1.5b via SPAC ⚬ Why screen scrapping still rules the roost ⚬ The race to dominate African fintech ⚬ There’s a new fintech industry group in town ⚬ NatWest scuttles its fintech SME lender, ESME Loans ⚬ Plaid makes more moves in the UK ⚬ Tinkoff joins Clubhouse with Oleg.
📈 Notable Funding Announcements
This week $2.9b in financings were announced across 55 deals globally.
🌍 Flutterwave Raises $170m At A $1b+ Valuation →
Last week African payments company, Flutterwave, announced they’d closed a $170m Series C round of funding. The latest round of funding values the company at north of $1b. The round was led by PE shop, Avenir Growth Capital, and Tiger Global. The round also had participation from DST Global, Greycroft Capital, Insight Partners, Salesforce Ventures, Worldpay FIS and 9yards Capital, to name a few.
🤓 My Take: In the world of fintech, payments are the foundational building block for nearly every product. Whether it’s a P2P wallet, a new PoS product, or a share trading app — all of them need to interface with the payment rails, somehow. In many ways, payments are the basic building block for any product that needs to interface with the financial world.
On the continent, Flutterwave is one of the interface points into the varied world of African payments. As we’ve seen in other markets, payment gateways and PSPs play an important role for those wanting to touch payments in a digitally native way.
In the case of Flutterwave, they go beyond simply doing payment processing across Africa — which would be in of itself is a big lift given how many different methods exist on the continent; USSD, MPesa, Mobile Money, credit cards and the list goes on. What makes Flutterwave so interesting is that it straddles both sides of the payments landscape — acquiring and issuing.
There tends to be a clear delineation between those who work on acquiring vs. issuing in most markets. In part, it’s because these are vastly different businesses. What’s more impressive is that Flutterwave does this across several countries on the continent. As a reference point, Stripe is still only doing issuing in one country, the US. Even beyond working on the full spectrum of payments, they’ve also tried their hand at their own payment app, Barter.1 It’s actually interesting going through their offering; it really feels like a one-stop-shop for payments across the continent — again, which is very different from what you find in other markets.
Flutterwave has been growing like wildfire. According to a recent Techcrunch article, the five-year-old fintech startup has increased revenue by 100% in the last year, with a CAGR of 226% from 2018. As I noted back in issue #41, we’re seeing fintech flourish everywhere, and this is yet another example of the growth we’re seeing in markets outside the US and UK.
👨⚕️ Cedar Payments Lands $200m In Fresh Funding →
Healthcare payment platform Cedar last week announced a $200m series D round of funding. Tiger Global Management led the round with participation from A16Z, Thrive Capital and Concord Health Partners.
🤓 My Take: In previous issues, I’ve discussed highly verticalised payment plays, and this is another great example of that. In fact, it’s surprising how broken the whole payment experience is in many industries (ie. education, construction and healthcare to name a few). Although most in tech think you can slap a Stripe checkout on a website and be done with it, the reality is many industries have complex payment flows that require specialist payments solutions.
In the case of Cedar, they market themselves as a “healthcare financial engagement platform.” In substance, this means they help health care providers with their billing operations. More specifically, they provide self-service check and registration, communicate price estimates and bill resolution, to name a few things from the suite of services they provide.
According to their website, Cedar’s product provides a 30% increase in collections and at the same time has a 88% satisfaction rating amongst patients. Not bad at all.
It’s easy to assume that payments is all about the checkout — enter your card, and you’re done. However, in several industries, that’s just the tip of the iceberg, and all the ‘magic’ is in workflow management.
☝️ Things You Should Know About
💸 Flywire Is Going Public At A $3b Valuation→
If you thought 2020 was a massive year for fintech listing, 2021 offers some serious heat, and we’re only halfway through March!
Flywire is a company you may not have heard of, but they play in the high dollar value payments space. As discussed above, many industries need more than a checkout when accepting payments for their services, and that’s where companies like Flywire step in. They service the health, education, travel industries and, more broadly, B2B companies that need a full-stack payment solution.
The company was founded in 2011 and since then has processed more than $16 billion in transactions. It’ll be interesting to see the filling when it becomes public, and the impact COVID-19 had on its numbers. Regardless this should be a 🔥 IPO.
🧑🎨 Beeple Sold An NFT for $69.3m →
WOW. Just WOW. For context, this sale puts Beeple in the pantheon of living artists. Specifically, this would rank him in the top three in terms of price fetched at an auction.
If you want to see his reaction to the final sale price, check out the video below from Christie’s Youtube channel.
Ok, now let’s zoom out for a second. What does this actually mean for the NFT sector as a whole?
In the short term, it’s clear we’re going to see more crazy prices for artwork (and in most cases “artwork”). More broadly, I think we’re going to see this be a catalyst for more assets being put on a blockchain. It’s actually ironic that a Beeple might be the one who’s going to usher in blockchain provenance, uniquely identifiable tokenised assets on a blockchain and a whole new structure for royalty payments to artists. Actually, properly hilarious.
To be clear, most of the NFT art being put up for sale is likely to be worthless in the coming years. However, that doesn’t mean we aren’t seeing some interesting experiments happening that could well be how we see rare assets treated. Take, for example, the ingenious B20 project.
I’m not here for the fart NFT dude, but I’m here for the new assets that will be made scarce and easily tradable — but the reality is it’ll likely take a few more fart NFTs to get us there.
🏦 SoFi Buying Small California Bank For $22.3 million →
As discussed last week, the race to become a bank is heating up.
As you may recall, back in July 2020, SoFi announced they’d applied for a banking charter (again). It seems post-SPAC announcement, they’ve become tired of waiting and instead decided to buy an existing bank, presumably exclusively for its license. Mechanically, it seems they’ll be changing their current application from a “de novo” application to a “change of control” application. It’ll be interesting to see who goes next in the great bank charter flippening of 2021.
🎧 Podcast Recommendations
When Mobile Payments Become Infrastructural with Hong Shen → This is a fascinating podcast that delves into how mobile payments have become entrenched in Chinese commerce over what is actually a very short period of time. Well worth a listen if you’re China fintech curious or just a payments nerd.
Democratizing Finance, Navigating a Crisis, & Embracing Change → In this podcast, Gretchen Howard, COO at Robinhood, discussed how she went from a senior role at Google to Robinhood, what excites her about Robinhood’s mission and the craziness that was the GameStop debacle — which is well worth listening for. Load this one up for your next run.
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Check this article out for some further information about Barter’s backstory.