Adyen, the FinTech giant that is somewhat ignored 😳; Crypto Winter takes another victim - a crypto exchange turned neobank 💀; The hottest FinTech vertical is now cool? 🤯
You're missing out big time... Weekly Recap 🔁
👋 Hey, Linas here! Welcome back to a 🔓 weekly free edition 🔓 of my daily newsletter. Each day I focus on 3 stories that are making a difference in the financial technology space. Coupled with things worth watching & most important money movements, it’s the only newsletter you need for all things when Finance meets Tech.
If you’re not a subscriber, here’s what you missed this week:
Welcome to Apple Bank - your everyday Banking from Apple, NOT a Bank 🍎🏦
How much is Bitpanda really worth? 🐼
and more!
As for today, here are the 3 FinTech stories that were making a massive difference this week. It certainly was the most fascinating week in the FinTech space this year so far, so definitely check out all the above stories.
Adyen, the FinTech giant that is somewhat ignored 😳
The launch 🚀 Amsterdam-based FinTech giant Adyen is launching its unified commerce solution in Mexico.
More on this 👉 FinTech has recently enabled full acquiring capabilities in Mexico, allowing it to offer the platform thanks to direct payment connections to local and global card and banking networks
Merchants that opt for the Adyen payments platform will be able to tap the company’s technology to accept Mexican consumers’ favorite digital payment method — digital wallets, which account for 19% of all payments. Adyen also supports card payments which make up 47% of all transactions in the country.
✈️ THE TAKEAWAY
Why this is worth talking about? 🤔 We must first remember that Adyen is a European company, and while Europe continues to be a core market for this FinTech, over the years it has grown to become a global payment platform with a strong foothold in North America, as well as other parts of the world. Their most recent move does not only further cement its presence in the region but also proves its global ambitions. Zooming out, it’s important to understand that Adyen has been steadily moving towards becoming the ultimate and global FinTech Platform that wants to centralize its users’ financial needs in a single ecosystem. They have been executing well on this strategy yet have been somewhat ignored. That should change, especially in the current environment, where valuations are collapsing and fundamentals are becoming the lifeblood of many firms. That’s where Adyen should thrive even more. More below:
Adyen + Tink, or why the future of payments is open 💸
Adyen is an underrated FinTech Giant. But that might change soon 👀
Crypto Winter takes another victim - a crypto exchange turned neobank 💀
Another one… 🥲 Berlin-based Nuri (previously Bitwala) is shutting down its business as the digital bank failed to raise funds or find an acquirer. It cited the “tough economical & political environment of the past months” behind the drastic decision.
I covered this earlier and being a client, was still hopeful until I received this:
More on this 👉 Originally known as Bitwala, the company was established in 2015 as a crypto exchange and later entered into other digital banking spaces with the rebranding. Nuri raised €42.3M in funding over the years, as per Crunchbase. It closed the last extended Series B funding round in mid-2021, raising €9M.
We can remember that Nuri filed for insolvency in August this year after letting go of 20% of its workforce as the firm struggled with the rout in cryptocurrency prices. Now it told its 500,000 users to withdraw funds from their accounts as the firm prepares to shut down and liquidate the business, marking it as another victim of the 2022 bear market.
✈️ THE TAKEAWAY
What can we learn? 🤔 Ultimately, it’s all about risk management. While Nuri didn’t specifically name its insolvent business partner which was one of the key drivers that led to insolvency, Celsius appears to be the prime candidate as it had partnered with Nuri to offer Bitcoin interest accounts to its customers. These accounts were halted when Celsius went into bankruptcy. The fact they were so reliant on Celsius should be a good lesson for everyone in FinTech - risk management and due diligence should be your key priorities, not the other way around. Because sooner or later they will strike back. Furthermore, major cryptocurrency sell-offs, small scale (let’s be honest, 500k customers over 7 years isn’t a lot), and limited product offerings meant that they could operate only for so long without outside funding. On top of that, the fact that nobody wanted to acquire even their user base, just strengthens the abovesaid hypothesis. Zooming out, it’s a huge warning sign for every other FinTech/crypto firm that has similar operations. If they don’t reach profitability, bankruptcies and M&As are inevitable.
Bonus reads: Monzo’s crypto ambitions & challenger banks’ strategy triangle 📐
Future of neobanks: some will swim & others will sink. Here’s how to survive the wave 🌊
The hottest FinTech vertical is now cool? 🤯
The (sad) news 🥲 Corporate spend management decacorn Brex announced it is cutting 11% of its workforce - 136 people - as it faces up to the "new macro environment".
More on this 👉 In a message to staffers shared on the company's blog, co-CEO Pedro Franceschi says the restructuring will "create more focus and financial discipline for the company, and put us on a path to sustainable profitability over the next few years".
Valued at over $12B in its most recent financing round, Brex launched in 2017 with a corporate card for venture-backed businesses, specifically focusing on startups and SMEs.
✈️ THE TAKEAWAY
The Bad & the Good 👀 After this piece of news, it’s clear that even decacorns have their challengers. What’s even more interesting is that Brex is part of the spend management industry, which just recently was one of the hottest FinTech verticals out there. Hence, it’s clear that even it isn’t immune to the changing macro environment and struggling (Fin)Tech market. On the other hand, when you look a bit closer, it appears that layoffs are to mostly related to Brex’s move earlier this year to no longer work with SMBs and nonprofessionally funded startups (it’s counterintuitive as this is what has given Brex its name). That said, the company is in essence letting go of people who were focused on serving that group (though it’s still strange it wasn’t able to find how to refocus them). But there’s a silver lining here. It seems that Brex is one of those few companies that are doing layoffs the right way. The company reportedly proactively shared news of a layoff with journalist Mary Ann Azevedo, and hence it got away without any gossip or speculation. I presume they treated the staff fairly too, so they definitely deserve some respect.
🔎 What else I’m watching
Not an orange season 🍊 French telecom Orange is reportedly weighing its options for its online banking division in the wake of media reports that the company was considering the sale of Orange Bank. “In a very highly competitive environment in the banking market, Orange is considering all opportunities to develop Orange Bank’s activities and support its growth,” a spokesperson for Orange told Reuters. Earlier the same week, France's Les Echos — citing unnamed sources — said Orange had instructed investment bank Lazard to embark on a new sale or possible alliance. Orange would not confirm those reports, Reuters said. The Reuters report said that Orange had previously shown a willingness to give up control of its banking operations, with BNP Paribas seen as the top candidate among French lenders. Although it’s mostly rumors right now, I’d guess the sale is more likely than not. FinTech is hard, and banking is harder. I think it’s about time to revisit the lessons of yet another failed neobank.
The GS Reorg 👀 Banking giant Goldman Sachs GS 4.52%↑ is reportedly moving forward with one of the most extensive reorganizations in its 153-year history - and the Wall Street bank’s 4th restructuring in 3 years. The bank is planning to streamline its organization into 3 divisions — investment banking and trading, asset and wealth management, and transaction banking — with consumer banking arm Marcus folding into the wealth unit, the Wall Street Journal reported, citing unnamed sources with insider information. Goldman currently has 4 businesses — investment banking, global markets, asset management, and consumer and wealth management. It was inevitable. Read this again: Goldman Sachs' Marcus shows just how difficult FinTech really is 😔
💸 Following the Money
Celestia Foundation raised $55M in a funding round to build infrastructure that will make it easy for anyone with the technical know-how to deploy their own blockchain at minimal expense.
UK open banking and request to pay FinTech Ordo raised £10M in a Series A funding round led by Equinox Systems. Founded in 2018 by the former management team of the Faster Payments scheme, Ordo enables businesses to request payments for single and recurring bills - via call centers, email, text, or any other messaging platform a business uses - by orchestrating open banking over the Faster Payments rails.
Yoloyolo, a new platform connecting NFT owners with brands to sell partnered merchandise, raised $3.5M in a seed round to help build the team and onboard new brands.
👋 That’s it for today! Thank you for reading and have a relaxing Sunday! And if you enjoyed this newsletter, invite your friends and colleagues to sign up: