Issue #81: Swift Partners with Wise, Insurtech Startups Have A Solid Funding Week, And WhatsApp Launches New Payment Options in India
π Hey, FR Family! I trust you all had a productive week!
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Itβs been another big week for fintech, so without further ado, let's delve into the major happenings from last week.
π£ The News Grab Bag
Last week at SIBOS 2023, Swift announced a partnership with remittance platform Wise to expand cross-border payment options for financial institutions globally. Through this collaboration, financial institutions can now route Swift payment messages directly to the Wise Platform. More specifically, this enables them to keep using Swift's MT or MX messages but have them delivered via Wise. According to the announcement, this should allow banks to offer their customers faster, lower-cost, and more convenient international payments without having to develop their own infrastructure.
This is a win-win for both; Swift retains clients who might have drifted to other platforms, while Wise can serve more customers through Swift's broad distribution. According to most reports, the extension of their partnership received a positive reception. However, you could imagine that some banks would view it as enabling a competitor (Wise) to leverage Swift's network without using its traditional correspondent network, rendering some of them irrelevant in the global money movement game.
Revolut launches Swift challenger RevTag
In other remittance platform news, Revolut announced the launch of RevTag, an instant and free payments ecosystem. With RevTag, Revolut Business users can make transactions in 29 currencies within the Revolut network by entering the RevTag of an individual or business in the app without using IBANs or additional beneficiary details.
The feature allows businesses to pay employees and contractors in over 150 countries and regions worldwide. In addition to RevTags, Revolut Business customers in the UK now have access to payout links, enabling payments to be made using just a URL without needing account details.
In global money transfers, the focus is on two key elements: creating a smooth customer experience and ensuring cost-effectiveness. As Revolut expands its reach into new markets, these benefits compound. This is another clever move by Revolut as it continues to leverage its ever-growing global footprint.
WhatsApp launches new in-app payment options in India
WhatsApp has launched new in-app payment options for its customers in India, including credit card payments and services from rival digital payment providers. These options will be available to any firm or company in India that uses WhatsApp's business platform.
Earlier this year, WhatsApp made strategic moves to diversify its payment options across various markets. You may recall its partnership with Stripe, enabling Singaporean businesses to process payments directly within a WhatsApp chat. Similarly, it rolled out business payments in Brazil, making transactions just a chat away. Now, the chat app is extending its payment capabilities by integrating in-app options, eliminating dependence on external services like Paytm or Google Pay in India. This not only streamlines the user experience but also signals WhatsApp's continued push to become a one-stop shop for commerce.
IKEA offers flexible payments through Afterpay
Last week, IKEA US announced theyβd partnered with Afterpay to launch its first BNPL programme. Afterpay's 'Pay in 4' service is now available in-store and online at IKEA.com for all US customers. The program allows customers to pay in four interest-free payments over six weeks with no credit impact to customers for eligible orders.
While it may not be headline-grabbing fintech news on its own, it does highlight how nascent the BNPL market is in the USβa perspective that's still largely contrarian. Contrast this with Australia, where BNPL has reached saturation; you can literally BNPL anything from pizza to IVF treatments. For a more direct comparison, IKEA Australia, for instance, partnered with Humm in 2019 to offer BNPL services to all its customers. As much as many think weβve hit peak BNPL in the US, I think thereβs a ton more growth to come.
Uber Eats is introducing AI assistant, new payment methods
Scheduled for 2024, Uber Eats plans to accept payments via the U.S. Federal Electronic Benefits Transfer and Supplemental Nutrition Assistance Program (EBT/SNAP), following in the footsteps of competitors like Instacart and DoorDash. The platform is also expanding its payment options to accommodate federal healthcare benefit plans, including Managed Medicaid and Medicare Advantage, by accepting FSA Cards, Flex Cards, and relevant waiver payments.
Although it's a minor update for Uber, itβs always great to see companies looking to tap new payment channels that are win-win outcomes for the platform and the customer. It's genuinely encouraging to see tech companies offering a more comprehensive array of payment options that expand the breadth of customer access and moves beyond just dropping in another BNPL button. For another example of this theme, check out TrueMed, which last week announced its launch.
Notable Funding Announcements
Last week was a solid week for fintech financing, with 44 funding rounds completed and companies collectively securing $848m in investment.
In this week's βNotable Funding Announcementsβ section, we're zoning in on insurtech. After a period of scepticism, the tides seem to be turning for this much-maligned segment. Just last week, consumer-oriented insurtech Kin closed a $33m Series D funding round. And the momentum doesn't stop thereβthis week, both Openly and Bolttech joined the fray with substantial investment rounds of their own. Seems like the insurtech space might be getting its mojo back.
Openly Announces $100M in Series D Funding Led by Eden Global Partners
Openly, a premium homeowners insurance provider, last week announced theyβd raised a $100m Series D funding round led by Eden Global Partners. The funding round also saw participation from other investors, including Gradient Ventures and Clocktower Technology Ventures.
Openly aims to transform the homeownerβs insurance journey by offering a platform for independent insurance agents β providing home insurance coverage and streamlining various processes from underwriting to claims. Founded in 2017, Openly already serves 30,000 independent agents across 21 U.S. states and notes a customer retention rate of over 90%. To date, Openly has raised nearly $240m.
For the most part, direct-to-customer approaches are the dominant way neo-insurers have tried to disrupt incumbent insurance companies. However, Openly is zigging where others like Lemonade and Metromile are zaggingβby selling exclusively through independent agents. Although this approach has fallen out of vogue, it seems to be regaining interest as a sales channel for some players in the insurtech space.
In theory, this approach allows a company (like Openly) to tap into the agents' deep market know-how and broad client networks, boosting its reach. Plus, it frees the platform to zero in on what it does best: product development and underwriting. Forget the customer acquisition headaches; that's the agents' gig. Again, in theory, it should be a win-win strategy that expands their customer base while keeping the focus razor-sharp. Itβll be interesting to see if this is how it plays out for insurtech startups like Openly.
Bolttech Receives $50M Series B Extension from LeapFrog
Singapore-based insurance ecosystem provider Bolttech has received a $50m Series B extension from LeapFrog Investments. This brings Bolttech's Series B funding to $246m.
Bolttech plays in the insurance infrastructure space β offering a platform that provides a suite of solutions, including automated underwriting, efficient claims processing, and integrated CRM tools. Insurance carriers currently use their platform in 30 markets across three continents.
The B2B insurtech infrastructure space continues to gain momentum. Whether itβs offering enhanced claims processing, improved customer insights or more automated underwriting, there is a growing contingent of players entering the space. Beyond these specific functionalities, platforms like Bolttech act as the technological backbone, allowing insurance carriers to innovate more rapidly. Itβs also interesting to note that this isnβt just a trend among established markets; we're also beginning to see it pick up in developing markets across Asia and Africa. This is likely where weβll see the next Duck Creek emerge from β as these growing insurance markets prove to be a great launching pad into more established markets.
π§ Resources & Recommendations
Block ft. Jack Dorsey - A controversial hack week project becomes the #1 financial services app
This episode of Sequoiaβs new podcast, Crucible Moments, discusses the history of Block, how it became a leading provider of financial tools for small businesses, and how they made Cash App happen.
Itβs a great episode that explores their decision to go full stack instead of just selling a hardware device, their failed partnership with Starbucks that ultimately paved the way for the long-term success of their merchant offering, their internal incubation of Cash App, and their recent acquisition of Afterpay. Itβs a fantastic short listen for your next walk.
π Bonus: Check out my previous pieces on Cash Apps growth machine and why I think they acquired Afterpay.
Citi Ventures at FinovateFall 2023 - This yearβs fintech funding trends
In this video from the FinovateFall 2023 conference, Arvind Purushotham, Global Head of Citi Ventures, discusses the current fintech funding landscape and areas seeing the most investment activity. The conversation covers the fintech funding outlook for 2024, key investment trends, and Citi Ventures' fintech funding strategy and focus areas. Itβs well worth a watch to understand what fintech CVCs are thinking about in 2023.
Katie Haun on Where Crypto Goes After a Year of Implosions
In this interview from last weekβs Techcrunch Disrupt 2023, Katie Haun, founder of Haun Ventures, discusses the current state of the crypto industry and her investment strategy. Interviews with VCs still investing in crypto through this yearβs bear market are always interesting, and this is no exception.
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Definitely think the RevTag v SWIFT framing is a tad ambitious of them. I think cross-border CashApp is a bit more accurate π€·