FinTech M&A & interesting BNPL play 👀; Global FinTech funding is still on steroids, the UK is doing really well💸🇬🇧; Crypto tax reporting unicorn 🦄

Good Morning FinTech. 22/30

When you find out how much tax you have to pay for your crypto…

Good morning Everyone,

And happy Firday! The week is approaching to an end. I hope you have enjoyed the daily updates. Here’s a final mix of 3 stories for this week:

FinTech M&A & interesting BNPL play 👀

The deal 🤝 UK-based Buy Now, Pay Later aka BNPL provider Zilch has acquired commercial lender NepFin. Terms of the deal were not disclosed.

NepFin, or Neptune Financial Inc. as it’s sometimes known, is a venture-backed commercial lending FinTech that provides debt funding to help entrepreneurs and investors grow small and medium-sized businesses in the US.

US focus🇺🇸 At the core of this deal, it’s Zilch’s American Dream. The company has ambitious plans to hone in on the recent Miami FinTech boom and considerably scale its US team.

One can note that Zilch was able to make the purchase thanks to its latest extension of its $110M Series B funding round.

✈️ THE TAKEAWAY

Another BNPL player, but a bit different… Unlike traditional BNPL players like Klarna or Afterpay, Zilch allows customers to pay in interest-free instalments at any online retailer where Mastercard is accepted, not just the ones supported by its platform.  Through the use of open banking, the FinTech startups ensures that customers can afford to repay their deferred purchases by using real-time insights into a consumer’s financial wellbeing and current expenditure. And that’s where responsible spending kicks in and Zilch can differentiate itself from the competition. More importantly, in November 2020, Zilch became the first UK BNPL firm to gain consumer credit authorisation from the Financial Conduct Authority (FCA), after it took part in the FCA’s regulatory sandbox programme. That’s a strong and solid move, and it looks like the company has some very interesting potential…

Global FinTech funding is still on steroids, the UK is doing really well💸🇬🇧

Records🔔 Global FinTech investment has reached a record $98 billiom in the first half of 2021, which is up from $87.1 billion in the same period in 2020, according to data compiled by KPMG.

UK is strong 💪 The UK saw a huge slice of cash invested into FinTech sector with $24.5B of FinTech investment (including M&A, PE and VC) in the first half of 2021, meaning nearly 1 in every 4 dollars invested went to UK firms.

It must be noted that the investment total was boosted by the $14.8B Refinitiv deal as well as a surge in VC deals. The UK’s total was second only to the US ($42.1B). 

UK FinTechs attracted significantly more funding than their counterparts in the rest of EMEA combined. 

✈️ THE TAKEAWAY

UK continues to be the FinTech hub🇬🇧. As noted earlier, United Kingdom is still very strong when it comes to financial services sector, and investor trust and deal appetite only illustrates that. What’s also important, is that the rest of EMEA is doing well too. $39 billion has been invested in the first 6 months of this year, which is already $14 billion more than the whole of 2020. More importantly, we see a wider mix of countries attracting big investments with $100M+ VC funding rounds in countries like the Netherlands, France, Austria, the Czech Republic and Saudi Arabia. The future is bright! For Europe and for FinTechs.

Crypto tax reporting unicorn 🦄

Another unicorn 🦄 TaxBit, the U.S.-based crypto tax software provider, has raised $130M in a Series B funding round. The round brings TaxBit's valuation to $1.33B, making it the latest unicorn in the crypto space.

Venture firms Insight Partners and IVP co-led TaxBit's Series B round. Insight Partners is an investor in firms such as FTX, ZenGo, and TradingView.

The USP 🥊 TaxBit's software helps automate tax reporting. Its clients include individual crypto users as well as enterprises and governments. FTX.US is the latest crypto exchange to partner with TaxBit. While TaxBit's solution is currently U.S.-focused, the firm is "very shortly" expanding in the U.K., followed by Canada, and Europe in the near future.

✈️ THE TAKEAWAY

Right timing ⏰ TaxBit's funding news comes just two days after the U.S. Senate passed a trillion-dollar infrastructure bill that would subject crypto businesses to more stringent tax-reporting requirements. That said, recent funding and valuation comes right on time and in the right place. More importantly, given the increasing adoption of crypto, it’s clear that TaxBit’s software will become more and more relevant. Even today, almost every company touching crypto needs tax reporting software. Add that to the recent legislation, crypto tax reporting obligations are only getting more rigorous. Looks like this is only the beginning for TaxBit 🚀

🔎 What else I’m watching

• Another crypto ETF 👀 The crypto trading firm Valkyrie Investments filed a proposal with the Securities and Exchange Commission (SEC) on Wednesday for a Bitcoin futures exchange-traded fund (ETF). The "Fund will not directly invest in bitcoin," according to the proposal, but "will seek to purchase a number of bitcoin futures contracts so that the total value of the bitcoin underlying the futures contracts" in it is as close as possible "to 100%" of the fund's net assets.

• Greenlight 🟢 The brokerage arm of Singapore’s DBS Bank has received approval “in principle” from the country’s financial regulator to begin offering crypto services to asset managers and companies. DBS Vickers (DBSV) received the go-ahead from the Monetary Authority of Singapore (MAS) under the country’s Payment Services Act, according to a press release on Thursday.

• Samsung wants those CBDCs 😎 Samsung Electronics is reportedly going to be a part of South Korea’s central bank digital currency (CBDC) pilot project. Samsung will participate in the Bank of Korea's (BOK) pilot program with a focus on remittances, according to a report by The Korea Times on Thursday.

💸 Following the Money

• The listed Schroders UK Public-Private trust (SUPP), formerly Neil Woodford’s Patient Capital Trust, has dipped its toe back in the FinTech waters, investing $13.7M into digital banking service Revolut. Schroders’ investment was a part of Revolut’s blockbuster $800M Series E, which saw the fintech valued at £33B.

• Mango Markets, a decentralized exchange (DEX) on the high-speed Solana blockchain, raised $70M in a token sale. 

• Hong Kong-based cross-border payments company Currenxie has announced that it has closed a $10M Series A funding round led by family office BF Belmont.

• Fleet payment startup Car IQ raised $15M in an oversubscribed Series B funding round led by Forté Ventures.

• Crypto data analytics platform Dune raises $8M in Series A funding.

👋 That’s it for today! Thank you for reading and have a productive Friday! And if you enjoyed this newsletter, invite your friends and colleagues to sign up:

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