Stripe goes crypto 🤯; Klarna jumps into B2B Buy Now, Pay Later front 👀; SumUp Snags Fivestars to go head-to-head against PayPal & Square 🥊
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Hey Everyone,
And happy Sunday! Hope your week was great & productive, and you are having a well-earned rest on Sunday. To make it even better, I invite you to take a look at three stories that were moving the headlines this week in the financial technology world. You can uncover other stories, keep the FinTech pulse daily and get at least X5 more by becoming a subscriber. Join the community here:
And here’s a mix of 3 great stories from this week:
Stripe goes crypto 🤯
Job postings 👥 Payments giant Stripe has begun assembling a crypto engineering team to lead its future in digital assets.
The team – described in LinkedIn posts and job listings – will be run by Guillaume Poncin, Stripe’s former head of engineering for banking and financial products. He is looking to hire at least four staffers to help plot Stripe’s crypto strategy.
The roles 👉 Those engineers “will design and build the core components that we need to support crypto use cases,” the job posts said. “Crypto is a brand new team at Stripe.”
The engineering team will “lay the foundation to support and inform Stripe’s crypto strategy,” according to the job post, and will affect everything from Stripe’s user interface to its backend operations and even its payment and identity systems.
The positions are limited to engineers based in the United States, who must also have a background developing in the crypto space in addition to more than 10 years of experience as an engineer.
✈️ THE TAKEAWAY
The calculated switch. One must note that the hiring move by $100B FinTech giant comes 2 years after Stripe’s CEO Patrick Collison said he was “very skeptical” of cryptocurrency. More importantly, one must remind you that Stripe initially started accepting Bitcoin back in 2014, but withdrew support four years later due to its slow transaction times and rising fees. In a blog post from Jan. 23, 2018, Stripe stated that it may return to the sector once crypto payments are “viable,” pointing to the development of the Lightning Network and “high-potential” projects emerging on the Ethereum blockchain. Looks like the time has come, especially given that pressure from the competition is rising. Square, PayPal, Mastercard, and Square have all entered the crypto sector. Square launched BTC trading via its Cash App in 2018, PayPal launched crypto support for U.S. customers in October 2020, while Mastercard announced in February this year that it would support multiple crypto assets on its network.
Klarna jumps into B2B Buy Now, Pay Later front 👀
The partnership 🤝 Swedish Buy now, pay later (BNPL) giant Klarna has partnered with Germany-based Billie, which offers BNPL services for business payments.
The integration will effectively let Klarna’s merchants with business customers offer Billie’s services. It will roll out in Germany in Q1 2022, with plans to follow for other European markets.
Details 👉 More than 250,000 eligible merchants will be able to activate Billie’s offering, which will be incorporated into Klarna’s existing processes.
Billie offers shopping limits of up to €100,000 ($114,025) and boasts a 90% conversion rate, making it a compelling option for merchants.
✈️ THE TAKEAWAY
Massive market. Globally, the B2B payments market is worth north of $84 trillion (considerably bigger than the retail market), which is exactly what’s pulling providers into the space. Klarna wants to be there too. More importantly, B2B payments are getting more digitized with checks and cash’s share in the market steadily declining. That said and as B2B e-commerce expands, it makes sense for providers like Klarna to integrate BNPL for online transactions. Notably, doing so through a partnership with an established provider can help Klarna scale quickly to beat out new entrants.
SumUp Snags Fivestars to go head-to-head against PayPal & Square 🥊
The scoop 🤝 SumUp, a European-based competitor to Square, PayPal/iZettle, and others that provide mobile-powered card readers and other sales technology to merchants and small businesses, has acquired Fivestars, which provides loyalty, marketing, payments, and other services to small merchants
Numbers 📊 Fivestars is used by some 70 million consumers and 12,000 businesses in the U.S. London-based SumUp said it will be paying $317M in a combination of cash and stock for the San Francisco startup.
The exit 💸 The acquisition is a bump up on the startup’s valuation as a private company. According to PitchBook, Fivestars — which was originally incubated in Y Combinator and later backed by VCs that included Salt Partners, Lightspeed, DCM Ventures, Menlo Ventures, and HarbourVest Partners — was last valued at $285M post-money when it raised a Series D of $52.5M a year ago, in October 2020. Not that bad!
✈️ THE TAKEAWAY
All eyes on the US🇺🇸. At the core, SumUp’s Fivestars acquisition gives it a stronger foothold in the US, where its main competitors including PayPal’s Zettle and Square do a lot of business, and it’s their primary market. Moreover, SumUp can use Fivestars to broaden its POS solutions and attract more merchant businesses. Fivestars’ customer loyalty solutions can hence benefit SumUp, which doesn’t offer these types of small-business services, especially as many US merchants work to rebuild their in-store customer bases post-COVID-19 lockdowns. Finally, SumUp can also use Fivestars’ POS technology to enhance its own suite of POS hardware and potentially give merchants a broader array of payment tools to choose from for in-person transactions. PayPal and Square should definitely be watching this as the new kid is about to enter the town 👀
🔎 What else I’m watching
Neobanks are strong in Brazil🇧🇷 Finder surveyed nearly 42,000 people across 30 countries to get a sense of how many use app-only banks (i.e. those available only via a smartphone app). Brazil came in first place with just over 32% of adults using an app-only bank, while Ireland came third, with nearly a quarter (24.8%) of adults having an app-only banking account. We probably have to thank Nubank for that, right? 👀
Massive IPO in India🇮🇳 Merchant commerce platform Pine Labs is eyeing an initial public offering (IPO) on Nasdaq and is looking to raise as much as $1B with primary and secondary stake sales, Mint reported citing unnamed sources. Morgan Stanley was hired by Pine Labs to manage the proposed initial share sale and is pushing to file IPO paperwork before October closes, the sources said.
SWIFT Go goes 100 👀 Since launching the offering in July, SWIFT has signed 100 banks to use its SWIFT Go money transfer product. 10 financial institutions have already gone live, the company said. SWIFT launched SWIFT Go to bring smaller businesses and individuals fast, secure, low-value cross-border payments from their bank accounts. Deutsche Bank, JPMorgan Chase, and China Minsheng Bank most recently signed on, representing 41M low-value cross-border payments annually. Is this a threat for FinTechs? 👀
💸 Following the Money
FinTech Now has received $29M in financing from a new credit facility and an additional equity investment led by Brigade Capital Management and Virgo Investment Group.
Mobile bank N26 has reportedly closed a €700M raise, bumping up its valuation to the €8B mark.
Mondu, a new FinTech player set up by the founders of LatAm e-commerce startup Dafiti, has tapped $14M in seed funding led by FinTech Collective and Cherry Ventures.
Digital business banking startup Open raised $100M in a funding round led by Temasek, with participation by existing investors Tiger Global and 3one4 Capital and new backers Google, Visa, and SBI Investment.
👋 That’s it for today! Thank you for reading and have a productive upcoming week! And if you enjoyed this newsletter, invite your friends and colleagues to sign up:
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