Amazon + Barclays = BNPL in the UK🇬🇧; Crypto funding in 2021 was bigger than all of the previous years. Combined 🤯; Women-led Anthemis is bullish on anything embedded finance🔥
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Good morning Everyone,
I hope you had a wonderful Christmas Eve and a fabulous Christmas celebration🎄If you’re on a holiday or still working, it’s a good time to catch up on the three stories that were moving the headlines last 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 really interesting FinTech stories from last week:
Amazon + Barclays = BNPL in the UK🇬🇧
The partnership 🤝 E-commerce giant Amazon has teamed up with Barclays to make its foray into the booming UK buy now, pay later sector.
Instead of calling it Buy Now, Pay Later aka BNPL, Amazon has called the new venture Instalments.
The USP 🥊 The new payment method can be used on purchases of £100 or more on Amazon.co.uk. Customers can hence spread the cost over several instalments between 3 and 48 months after purchase. Amazon will charge interest over the instalment period, with an annual rate of 10.9%.
The reusable credit account can be used on millions of products, including those from thousands of small and medium businesses selling on Amazon, Amazon said. It must be noted that customers need to meet certain eligibility requirements to apply for an instalment account—for example, they need to be over 18 years of age and have been a UK resident for at least 3 years.
The product is already launched in Germany last year.
✈️ THE TAKEAWAY
Following the money. With the recent partnership, both Amazon & Barclays are following the money. And the money - both from consumers & VCs - is currently going towards BNPL. It’s especially hot in the UK where upstarts like Zilch have managed to achieve massive growth in a super short period of time. But there’s a small catch when it comes to Amazon. The key point of difference to existing BNPL providers like Klarna is that Barclays will charge interest over the instalment period, with an annual rate of 10.9%. That’s a lot. On the other hand, Amazon has a huge network & merchant base to advertise this solution to, and if it manages to do it seamlessly, it might be quite a massive cash cow. Because at the end of the day, credit is all about data. And Amazon has tons of it.
Crypto funding in 2021 was bigger than all of the previous years. Combined 🤯
Flooding the space with 💸💸💸 According to available data from PitchBook, as of December 15, VCs have invested around $30 billion into the crypto industry in this year alone.
Massive surge 🚀 For the perspective, ATH of crypto investments was in 2018 when investors poured $8 billion into the space. This means that investors have invested almost 4-times of what they did in 2018 into the space. Let that sink in… 🤯
Top investors 💼 Data from PicthBook reveals that the top venture capital investors in the crypto industry include Coinbase Ventures which has closed around 68 deals this year, Digital Currency Group with 58 deals, and Polychain Capital with 44 deals. Other VCs that make up the top 5 include Pantera Capital and Andreessen Horowitz with 43 and 40 deals respectively.
These investors participated in some notable funding rounds like that of FTX, a crypto derivatives exchange that raised $1 billion in its Series B funding round in July, and New York Digital Investment Group who also raised $1 billion recently.
✈️ THE TAKEAWAY
FOMO & New trends. The surge in crypto investments is obviously tied to several new innovations that can now be found in the crypto space. Most notably, it’s the growth of NFTs, DeFi, Web 3.0, metaverse, among others. Zooming out, it must also be noted that investors are funding almost anything and everything these days, primarily because they think that they don’t have enough exposure to the industry and simply fear missing out. On a general level, we’re still early, and the next couple of years should be even more exciting as the crypto space grows to 1 billion users globally.
Women-led Anthemis is bullish on anything embedded finance🔥
The news 🗞 The UK/US-based, female-led investment platform Anthemis Group raised more than $700M, bringing the firm’s total AUM to $1.2B.
It will continue to invest in pre-seed through Series B embedded finance startups and also fund early-stage FinTehcs.
The USP 🥊 The investment firm heavily promotes its progressive values of diversity and inclusivity. Its vision statement includes building “one of the world’s leading diversified financial services companies, with a commitment to diversity, equity, and inclusion as a blueprint for the economy.”
To that end, the company is working to improve gender imbalances in financial services.
The backings 👉 Anthemis has made more than 150 investments in FinTechs including Betterment, eToro, Currency Cloud, The Climate Corporation, Carta, and Happy Money.
✈️ THE TAKEAWAY
Diversity & booming industry. There are 2 things to take away from this story. First and foremost, diverse thinking is critical to how FinTechs understand unmet needs in under-leveraged markets and how they innovate. There’s strong evidence of the value women bring to businesses. The Credit Suisse Research Institute reports that companies with at least one woman on the board perform 26% better than those with male-only boards, while Forbes found female entrepreneurs generate 20% more revenues than their male counterparts, despite receiving 50% less venture capital funding. Second, embedded finance is one of the hottest FinTech verticals right now continuing to attract both attention and capital. And there’s a clear rationale here as embedded payments services alone are expected to generate €277.46B of revenue in Europe alone over the next 5 years. Not too shabby!
🔎 What else I’m watching
Credit builder for SMEs 👉 SME credit lender Cashplus is launching a credit builder tool for small and medium-sized businesses aimed at helping the 65% of UK startups that are refused credit. Called the Business Creditbuilder, the tool aims to help firms build their credit score while paying their standard account fees. The tool, which is free to Cashplus business account holders, has been developed with credit reporting company Equifax.
Tracking BTC 👉 Austrian FinTech giant Bitpanda launched an exchange-traded note (ETN) that tracks the price of BTC and is fully collateralized by BTC that is held in cold storage with a regulated custodian. The ETN is listed on Deutsche Boerse's electronic exchange XETRA, one of Germany's most popular platforms for exchange-traded profits.
Beating Google 👀 Short-form video-sharing service TikTok was the most popular internet site in 2021, passing even Google, online infrastructure-provider Cloudflare Inc. reported. Following behind TikTok in Cloudflare’s list of top internet sites in 2021 is Google, Facebook, Microsoft, Apple, Amazon, Netflix, YouTube, Twitter, and WhatsApp. Notably, Instagram is no longer in the top 10, losing its previous ninth-place position.
💸 Following the Money
Tiger Global Management has jumped into the booming Pakistan startup market with an investment in small business-focused digital bookkeeping platform CreditBook. Tiger Global and Firstminute Capital led the CreditBook fundraising round, which totaled $11M.
Vietnam-based e-wallet MoMo has raised another $170M in its latest Series E funding round led by Japanese bank Mizuho.
DeFi and NFT marketplace Arcade raised $15M in a Series A funding round. The platform recently drew media attention with the facilitation of an $800,000 NFT-collateralized loan.
👋 That’s it for today! Thank you for reading and have a productive week! And if you enjoyed this newsletter, invite your friends and colleagues to sign up:
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