News Briefing - Crowdfunding, SME And Alternative Finance

London's financial district, pulsing with money and technology, photographed from the air

1. UK – FinTech

Just over six months after its last funding roundFronted has added another £1m to its coffers raised from a host of backers—many of whom are ex-Monzo employees, according To AltFi.

 

“Angel investors including Paul Rippon, Monzo’s former co-CEO, Gary Dolman, the digital bank’s first CFO, and Baroness Kingsmill, the former chair of the bank, participated in the round, which takes Fronted’s total funding to over £2m raised. 

“We are delighted to get the backing of over 20 remarkable investors, to grow the business. This investment is the result of a year of huge effort from the whole team,” said Fronted co-founder Jamie Campbell. 

“We will use the money to create greater access to Fronted; partnering with platforms that will offer Fronted as a deposit payment option.”  

Dolman, now a venture investor at Antler VC, has also joined Fronted’s advisory board as part of the investment. 

Fronted’s offering is highly differentiated and equally attractive to their customers and to me as an investor,” he said. 

Other named investors in the round include Ville Vesterinen, co-founder of Slush, and Ling Lin, co-founder at Grip.” 

 

2. UK – FinTech 

 

AltFi opines on trust in FinTech. 


“The question of consumer trust in financial services came into sharp focus last week with news that Lanistar, a fintech start-up aiming to be the next digital bank success story was re-launching its plans via a deal with Modulr Finance after a shaky start.   

If you’ve not heard of Lanistar, it’s less than a year old and hasn’t yet launched. But, it has attracted huge attention owing to a colourful social media campaign encompassing 3,000 ‘influencers’ offered equity in the business in return for promotion of its services.  

Not long after Lanistar last year trumpeted its ambition to be the next fintech unicorn (recently upgraded to a ‘deca-corn’ goal) through an attention-grabbing social media campaign the FCA put out a statement warning that it may be a scam only to change its mind a few days later and remove the warning. 

What is the average consumer to make of the events? Will consumers trust Lanistar with their cash? Do they even care about a messy start to a fintech brand’s life?  

Fintech, and all digital finance, has faced an uphill struggle over the last decade to build trust, not helped by a number of moderate scandals such as the collapse of several mini-bond issuers, Wirecard’s demise and Lendy’s administration to name but a few. Not to mention the churlish warnings of many sceptical onlookers. 

All have knocked consumer confidence and trust in fintech, highlighted regulatory weaknesses, as well as provided fuel for naysayers who wince at the fast-paced growth and bold ambitions of fintech entrepreneurship.” 

3. International – FinTech 


The latest on the SPAC frenzy, from Finextra via Bloomberg. 

 

“Former London Stock Exchange CEO Xavier Rolet is planning to get in on the fintech Spac frenzy by launching his own $300 million blank cheque company, according to Bloomberg. 

The US-listed special purpose acquisition company that would target investments in fintech and quantum computing firms could be unveiled within days, say Bloomberg, citing sources.

In recent months, Spac deals have become the go-to method for fintech players in America looking to go public, with MoneyLion, eToro, Payoneer and SoFi among those to have gone down the route. In the first three months of 2021 alone, 143 Spacs raised c$43bn in the US, according to data from Refinitiv.

In February, Rolet - who left the LSE in 2017 - signalled his support for the still-controversial strategy, calling on his former employer to get in on the boom in a paper urging the UK to revisit its Spac rules.

"The UK needs to promptly consider the Spac revolution," wrote Rolet. "Whilst there are significant differences between our markets and those in the US, the appetite for permanent listed capital on the part of ambitious UK and European entrepreneurs and innovators is no less than that of their American counterparts: ask the management teams at Spotify or Markit.” 

 

4. International – FinTech 


China is leading the race to propagate Central Bank Digital Currencies. Crowdfundinisder has the latest: 


“Chinese banking institutions have introduced central bank digital currency (CBDC) hardware prototypes for several different use cases. 

The People’s Bank of China (PBoC), the nation’s central bank, and the Industrial and Commercial Bank of China (ICBC) have introduced prototype hardware devices that aim to offer support for the use of the virtual renminbi across multiple applications. 

The PBoC and ICBC showcased the devices at the 4th Digital China Construction Summit held in the city of Fuzhou, where digital commerce firm JD.com confirmed that it had started paying staff members in the virtual yuan. At the event, Chinese Fintech giants Ant Group and Tencent also showcased their contributions to ongoing CBDC research and development (R&D) initiatives.” 

 

5. International – FinTech 


Finextra reports: 


“Canadian payments firm Nuvei has agreed a $250 million cash deal to acquire Simplex, a fintech startup providing fiat infrastructure to the cryptocurrency industry. 

Founded in 2014, Simplex provides a fiat-cryptocurrency gateway connecting market participants including exchanges, brokers, wallet and liquidity providers.

The firm's infrastructure enables users to buy and sell crypto with credit and debit cards, while the firm's proprietary fraud and risk management tools ensure a zero-chargeback guarantee to customers.

The acquisition will also provide Nuvei with an electronic money institution (EMI) license to offer IBAN accounts to end users and corporations, and offers future banking and card issuing capabilities.

As a principal member of the Visa network, Simplex has permission to issue cards, giving its consumers access to digital currencies daily. The firm processed approximately $500 million of total volume in 2020 and is expected to process more than $2 billion in 2021.”