Turkish FinTechs are shopping in Europe ๐๏ธ๐ช๐บ; The worst possible time for a financial technology firm to go public might be nowโฆ ๐๐; European FinTechs are scouting for AI talent ๐ค๐ฉโ๐
FinTech is Eating the World, 24 August
Hey Everyone,
Happy Thursday! Todayโs issue is especially interesting as weโre looking at Turkish FinTechs that are shopping in Europe (what itโs all about & the Big Picture view + priceless M&A resources), why now is the worst possible time for a FinTech to go public (what Better.com teaches us?), and European FinTechs that are scouting for AI talent (itโs a very lucrative space right now + more dives into AI & Finance). Letโs jump straight into the cool stuff ๐ถ
Turkish FinTechs are shopping in Europe ๐๏ธ๐ช๐บ
The news ๐๏ธ Embedded finance provider Param, one of Turkey's largest FinTechs, has recently acquired Czech Buy Now, Pay Later (BNPL) firm Twisto.
This isnโt the first time Turkish FinTechs are shopping around in Europe, so letโs take a look.
More on this ๐ Founded in 2013, Twisto is one of the leading BNPL platforms in Central Europe that calls itself the Klarna of the East. We can remember that it was acquired byย Zip Co in 2021.
Param was reportedly the first e-money institution in Turkey. The FinTech primarily focuses on SMEs & corporations and provides both online and offline payment offerings, open banking, customer loyalty, wallet services, prepaid cards, and collections, as well as a BNPL service and an SME lending business.ย Also, itโs currently the only financial institution in Turkey to issue cards under four different card schemes โ Mastercard MA 0.00%โ, Visa V 0.00%โ, Discover, and Troy.
Param has a valuation of $217M, according to its last funding round in 2022, making it one of the largest Turkish fintech investments.
The news comes just over a month after Turkish neobank Papara acquired Spanish neobanking rival Rebellion Pay for an undisclosed sum.
โ๏ธ THE TAKEAWAY
What does this mean? ๐ค First and foremost, this is all about the expansion. Like Papara, Param plans, via Twistoโs European licenses to offer its embedded finance services, aimed at SMEs and large companies,ย initially in the UK, Germany, Netherlands, Czech Republic, and Poland. Whether they can make it in a crowded and increasingly competitive FinTech space in Europe - thatโs another question. But going at it via M&A vs. trying to do it themselves is definitely a smart move. Second, we also have to talk about product expansion with a key focus on embedded finance. Paramโs primary focus lies in its B2B2X offering, hence, itโs keen to expand its solutions throughout Europe. Given the B2B2X sector is growing rapidly right now and is anticipated to drive the next phase of the FinTech (r)evolution (with embedded finance & financial infra being the key catalysts), it would be foolish not to double down on this right now. Finally, thereโs the BNPL element. This deal is further evidence of the need for more consolidation in the crowded and largely unprofitable BNPL sector. We can remember that earlier this month, US-headquartered neobank Upgrade agreed on a deal to acquire BNPL outfit Uplift while Afterpay, now part ofย Block SQ 0.00%โ,ย contributes only 7% of revenue (it has also closed in Spain, Italy and France). So more M&As in this space are definitely under way. Watch out!
P.S. if you want to do the M&A right, read this:
Also, ICYMI: Embedded finance is a $242B opportunity in APAC by 2025 ๐ณ