News Briefing - Crowdfunding, SME And Alternative Finance

two small test tubes

1. UK – FinTech 

 

Altfi looks at a potential replacement for credit cards: 

 

“Consumers are flocking towards BNPL with over half (54 per cent) saying that BNPL will replace their use of credit cards, according to research from Marqueta, which also found more than one in three (35 per cent) saying they had tried BNPL for the first time during the pandemic. 

The listed card issuing platform surveyed 1,000 UK consumers and found that despite recent warnings from the likes of Citizen’s Advice that BNPL can provide a slippery slope towards debt for some users, seven out of 10 consumers prefer BNPL options to credit cards due to affordability and ease of management. 

Growth in the use of BNPL has been well documented, not least owing to the explosion of M&A, VC investment and launches in the BNPL space.  

Perhaps unsurprisingly, this has occurred during the twin pandemic-driven trends of booming e-commerce and greater demand for credit. In the survey just under 3-in-5 (59 per cent) respondents say they have relied on credit to make ends meet during the pandemic. 

Seven out of 10 consumers reported that they prefer BNPL options to credit cards, citing affordability and ease of management as key reasons. 

Nonetheless, more than half (53 per cent) worry that it’s easier to fall into debt with BNPL compared with credit cards. Almost a quarter (23 per cent) of consumers said they have struggled to keep up with minimum monthly card payments during the pandemic.” 

 

2. UK – FinTech 

 

Finextra looks at the fortunes of contemporary UK FinTechs: 


“After a whirlwind decade that has seen more than 1000 startups launched and go on to raise over £11 billion between them, the UK fintech scene is starting to mature, with investment in early-stage rounds slowing and the number of companies founded declining as investors focus their bets on established players that are expected to make it big, suggests new analysis. 

Claurus Investments has researched all of the 1100-plus fintech companies founded in the UK since 2009 that had received at least one round of funding by the end of 2020.

These firms have raised £11.4 billion between them and have a current total valuation of £86 billion, employing 57,000 people.

Clarus estimates that just 150 of the total 1100 venture capital backed companies scrutinised will create any meaningful value. States the report: "We should not be surprised if the others disappear."

Digging deeper, pre-season A funding peaked in 2018 at £265 million, while the annual number of new companies founded in 2019 and 2020 was less than half that of in the years 2015 to 2018.

Claurus suggests that this indicates that the rate of new innovation has slowed with the focus of investors shifting to players seen as long-term winners, which are now attracting huge later-stage rounds, such as Revolut's recent £580 million raise.

Meanwhile, UK fintech startups are showing good staying power: For the companies at least three years old, 60% are continuing and have received funding in the last three years. Another 18% are operating but have not received funding in the last three years. Just 15% have closed, with the rest having seen a exit of some kind.” 

 

 

3. UK – FinTech 

 

Crowdfundinsider reports: 

 

“Specialist lender Assetz Capital has appointed Mehwish Mirza to the new position of senior relationship manager to its bridging team. Mirza moves over from Glenhawk, where she spent almost two years operating as a business development manager following spells with Together and Gatehouse Bank. She began her career with a seven-year tenure at Al Rayan Bank, becoming the first woman to be promoted as a business development manager in the bank’s history. 

In July Assetz Capital added Laleta Buctkuar and Colin Mottram to its bridging team to grow its short-term loan book. Following 12 years at Together, Buctkuar brought experience in the intermediary market, while Mottram was promoted from senior relationship manager after two years at Assetz Capital and previous stints at Lloyds Banking Group and the Royal Bank of Scotland.” 

 

4. US – FinTech 

 

Cryptocurrency wealth management platform Abra has raised $55 million in a Series C funding round led by Ignia and Blockchain Capital, according to Finextra. 


“Kingsway Capital, Tiga Investments, the Stellar Development Foundation, Lerer Hippeau Ventures, Amex Ventures, Arbor Ventures, RRE Ventures, CMT Digital Ventures, and Kenetic Advisors joined the round.

Founded in 2014 by Bill Barhydt, Abra’s hundreds of thousands of users earn high yield on their crypto assets, trade over 100 different crypto currencies and borrow dollars against crypto holdings.

The firm has processed over one billion dollars in crypto backed loans and in the last year has seen revenues increase ten-fold.

The new financing will be used to beef up the Abra product team into new offerings for wealth management, trading, and payments; scale the marketing team; and develop high net worth and institutional sales offerings.” 

 

 

5. US - FinTech 

 

Altfi reports: 


“Just 12 months after a swathe of Tier 1 UK banks took equity stakes in Form3, the payments infrastructure group has raised a new $160m funding round led by Goldman Sachs Asset Management. 

The round is prepping Form3 for international expansion, primarily focusing on the US, where Form3 says it is already in “advanced conversations” with several American banks. 

“It’s probably the biggest opportunity for us that is out there,” CEO Michael Mueller told AltFi. “The market in the US is very attractive given the state of affairs with real-time payments taking off, and with respect to the technology that the banks are using.” 

“But it’s not only the US. We’re identifying a number of markets we'd like to enter.” 

Form3 is also understood to be considering expansion options in Europe and Southeast Asia, harnessing its existing relationship with partners and its shareholder Mastercard. 

Other existing investors in this latest round included Mastercard, Lloyds, Nationwide, Barclays, 83 North and Draper Esprit—who were all involved in Form3’s last $33m raise in 2020.”