Funding

BNPL Giant Klarna Raises $639M Funding Round Led By SoftBank

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Swedish fintech giant Klarna has raised $639 million in a funding round led by SoftBank’s Vision Fund 2, valuing the startup at ~45.6 billion. The round also witnessed participation from existing investors Adit Ventures, Honeycomb Ventures, WestCap Group and Raison Asset Management. The company intends to use the funds for international expansion and global retail growth. This round brings the total funding raised by the Buy-Now, Pay-Later (BNPL) startup to over $3.7 billion.

Founded in 2005 by Sebastian Siemiatkowski, Niklas Adalberth and Victor Jacobsson, Klarna enables consumers to shop, pay and bank via smart tools including a consumer shopping app, used by consumers and retailers globally.

European WelathTech Scalable Capital Raises $180M In Series E Funding Round Led By Tencent

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Germany’s largest digital asset management company Scalable Capital raised $180 million in Series E funding round at a valuation of ~1.4 billion led by Tencent, making it the latest entrant in the fintech unicorn camp, which now hosts six German startups including wefox, Trade Republic, Deposit Solutions, Mambu and N26.

The funding round also witnessed participation from existing investors BlackRock, HV Holtzbrinck Ventures and Tengelmann Ventures, making the total amount of equity funding raised by the startup to more than $320 million.

Founded in 2014, Munich based Scalable Capital is a digital investment service that employs proprietary software to offer portfolios that are dynamically optimized with a primary focus on risk management. 

Capchase Raises $125M In Series A Funding Led By QED

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New York based Capchase secured a $125 million Series A investment led by QED Investors. The funding round also witnessed participation from existing investors Bling Capital, Scifi VC and Caffeinated Capital, along with several angels.

Founded in 2020 by Ignacio Moreno, Luis Basagoiti, Miguel Fernandez and Przemek Gotfry, Capchase provides non-dilutive capital to help SaaS companies finance the growth of their operations with cash tied up in future monthly payments. 

Canadian Bench Raises $60M in Series C Funding Led By Contour Venture Partners

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Vancouver based digital financial solutions startup for small businesses Bench raised $60 million in a Series C funding round led by Contour Venture Partners, along with with Sage Group and Shopify. The round also witnessed participation from existing investors Altos Ventures, Inovia Capital, and Bank of Montreal, bringing the total funds raised by the fintech startup to over $109 million.

Founded in 2012 by Adam Saint, Ian Crosby, Jordan Menashy and Pavel Rodionov, Bench offers an integrated digital financial solutions platform for small businesses spanning banking, cards, payroll, bookkeeping, taxation and advisory services.

Irish Fintech Wayflyer Raises $76M In Series A Funding Led By Left Lane Capital

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Dublin based fintech Wayflyer has raised $76 million in Series A funding led by US based Left Lane Capital, just seven months after the irish startup raised a $10 million seed round from QED investors, FinTech Growth Fund Europe, Studio VC, Speedinvest and Middlegame Ventures. The current funding round also witnessed participation from partners of DST Global, QED Investors, Speedinvest and Zinal Growth.

Founded in 2019 by Aidan Corbett and Jack Pierse, Wayflyer is a revenue-based financing platform for eCommerce brands.

Cologne Based German Fintech nextmarkets secures €24.9 million in Series B funding round

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Today nextmarkets, the Cologne-based fintech startup, has announced closing a Series B funding round of approximately €24.9 million. The additional capital is intended to further accelerate the European expansion of the fintech company.

Founded in 2014, nextmarkets bills itself as ‘Europe’s commission-free neobroker’. In addition to truly commission-free trading of shares and ETFs for €0 via the stock exchange, the fintech company boasts an advanced, highly flexible proprietary technology platform, as well as an extensive set of hard-to-get licenses and regulatory approvals. The platform also hosts professional investors, so-called ‘coaches’, who generate up to 300 curated investment ideas for users every month – free of charge and in real time.

So far, the fintech startup has offices in Cologne, Lisbon and Malta, currently employs a team of 39 and is backed by leading venture capitalists such as Peter Thiel, Christian Angermayer, Founders Fund, Axel Springer, Falk Strascheg, DEWB and the publicly listed FinLab AG. In 2020, the startup its presence from Germany and Austria, to six further countries – the UK, Portugal, the Netherlands, France, Spain and Italy.

Investment In Fintech More Than Doubles Despite Pandemic: KPMG Report

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According to KPMG’s latest Pulse of Fintech report, fintech investments rose from $33.4billion in the first half of 2020 to $71.9billion in the second six months of the year. In total, there were 2,861 fintech funding deals in 2020, worth a total of $105billion.

Despite the uncertainties of the global pandemic and the US presidential election, strong venture capitalist investment throughout the year helped boost overall fintech investment. Global fintech-focused VC investment reached $42billion in 2020, including $20.5billion in H2.

Anton Ruddenklau, global fintech co-leader at KPMG, said: “A number of sectors floundered given the challenges of doing business in a pandemic environment . Fintech, for the most part, was not one of them. Covid-19 has been a catalyst for many fintech business models – a real proving ground given the accelerated demand for digital offerings coming from consumers and businesses alike. Payments and e-commerce platforms were particularly hot areas of investment, in addition to cybersecurity, given the increasing use of digital platforms.”

VC investments in fintech globally rose year-over-year – from $40 billion over 2,834 deals to over $42billion investment across 2,375 deals. Both the Americas ($23billion) and EMEA ($9.2billion) regions saw record highs of annual fintech-focused VC investment. However, fintech investment in the Asia-Pacific region dropped to the lowest level since 2014 at $11.6billion.

US-based wealthtech Robinhood raised the most VC funding in H2’20: $1.3billion across two rounds ($600million and $668million). A number of digital brands raised funding rounds above $500million, including Sweden-based digital bank Klarna ($650million), UK-based Revolut ($580million), and US-based Chime ($533million).

Although M&A deal value dropped in the first half of 2020 ($10.9billion), it rebounded to more than $50billion in H2’20, led by the $22billion acquisition of TD Ameritrade by Charles Schwab and the $7.1billion acquisition of Credit Karma by Intuit.

Corporate-participated venture investment in fintech flourished in 2020 at $21billion, with both the Americas ($9.7billion) and EMEA ($4.8billion) seeing record annual levels of CVC investment. Meanwhile, global investment in cybersecurity quadrupled – from $500million in 2019 to more than $2billion in 2020.

Payments firms and challenger banks drove the largest deals in Europe, including $500million+ raises by three companies: Klarna, Polskie ePlatnosci and Revolut.

In Asia-Pacific, where overall fintech investment dropped, the payments space showed the most regional resilience. In H2’20, Australia-based eNett was acquired by US-based WEX for $577million, Australia-based Judo Bank raised $209million, South Korea-based Toss raised $177million, and India-based Razorpay raised $100million.

According to KPMG’s latest report, given the increase in demand for digital payments, contactless payments and e-commerce platforms, fintech investment is expected to remain robust well into 2021. Corporate investment is expected to be particularly buoyant as incumbent businesses continue to work to accelerate their digital transformation efforts.

Blockchain is also expected to gain traction as blockchain-based solutions and digital asset offerings become more mainstream. The study also suggests resurgence in M&A activity across the board as smaller fintechs consolidate, incumbents look to acquire capabilities to crank up their digital transformation efforts and larger fintechs plump for M&A as a mechanism for growth.

“Given the strong valuations that tech companies are getting in the public markets, exit activity is going to increase significantly in 2021, particularly in terms of IPOs,” said Ian Pollari, global fintech co-leader at KPMG. “Already in H1’21, we’ve seen a number of unicorn fintechs looking to go public – whether through traditional IPOs or through SPACs – and we’re likely to see more.”

Asia Pacific pulled $11.6 billion in fintech investments

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Fintech companies in Asia Pacific pulled in USD11.6 billion across 565 deals from venture capital, private value and M&A in 2020, compared to USD 16.8 billion in 2019, reaching a six-year low, as the pandemic saw a decline in investment into emerging markets like Southeast Asia, particularly in the second half of the year. Global fintech funding was USD105 billion in 2020, the third highest fintech investment on record despite a significant drop compared to USD165 billion in 2019, as per KPMG’s Pulse of Fintech H2’20 report.

Total fintech investment in China was soft in 2020, at USD1.6 billion, a decline from USD4.8 billion in 2019. It reflects the significant maturity of China’s fintech sector, especially in the payments space which is dominated by a small number of tech giants.

After Gojek raised USD3 billion in Q1’20, the increasing uncertainty created by the pandemic drove a large amount of investment away from emerging markets like Southeast Asia, especially in the second half of the year. Nevertheless, the payments space showed the most regional resilience. After the worldwide pandemic brought many deals to a halt in H1’20, H2’20 reversed the trend as investors and fintechs learned to do business in a new environment. In H2’20, Australia-based eNett was acquired by US-based WEX for USD577 million, Australia-based Judo Bank raised USD209 million, South Korea-based Toss raised USD177 million, and India-based Razorpay raised USD 100 million.

Andrew Huang, Partner and Fintech Leader, KPMG China says: “In China, we are seeing growth in a number of emerging fintech sectors, including blockchain, regtech and wealth management. One major change we have seen in 2020 has been the focus of these fintechs, with many now focusing their efforts on empowering traditional financial institutions rather than providing direct to consumer products.”

Insurtech continued to gain traction among investors in China. In H2’20, Shuidi, a crowdfunding platform which focuses on medical expenses, raised two rounds of funding totaling USD380 million. Digital transformation of the insurance industry is being driven by the PRC government, insurance companies and technology companies alike. As a result, insurance service providers are likely to see structural reform continue, with more emphasis placed on innovative ways to prevent risks.

As mainland China moved forward with real-world testing of its central bank digital currency, other countries began to evaluate their options, including the Federal Reserve, the European Central Bank, the Bank of England, that together set out a structure and necessities for offering central bank digital currencies.

Barnaby Robson, Partner, Deal Advisory, KPMG China says: “Pandemic-era accelerated growth and loose monetary policy has driven up stock-market valuations for tech companies. Shareholders of privately owned fintech groups perceive there is a window to list at excellent valuations, and we expect significant IPO activity in 2021/22.”

Incumbent banks in Mainland China made significant investments internally in 2020 in order to transform their digital capabilities. Several also continued to set up subsidiaries in order to build their capabilities and provide B2B computerized banking services to smaller organizations.

In Hong Kong, a majority of the eight digital banks authorized in the city launched services over the course of 2020; while their impact will take time to understand, they have already driven occupant banks in Hong Kong to up their game in terms of apps, user interface, products and services. The technology IPO market was also robust in 2020, while unicorn fintechs are progressively considering IPOs given the recent successes and valuations achieved by unicorn companies.

Petal Takes In $126.6M Debt Facility To Provide Access To Credit

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Fintech and credit card company Petal closed on more than $126.6 million in debt facility backed by Silicon Valley Bank and Trinity Capital that will enable it to expand its credit card programs.

Founded in 2016, New York-based Petal aims to make financial services more accessible, allowing people to build credit and spend responsibly. The company uses machine learning to expand credit access, particularly to those who are new to credit and overlooked by big banks.

The startup is growing quickly, and accelerated during the global pandemic as big banks were pulling back, Petal’s Jason Gross, co-founder and CEO, told Crunchbase News.

“We recently reached a milestone of 100,000 approved cardholders,” he added. “Ths funding allows us to continue that growth, but more significantly, this is the first depository financial institution for Petal cards. We are not just providing a typical credit card, but pioneering a whole new way of looking at credit risk.”

Petal offers two Visa card products: one for consumers who already have a credit history and want to improve their credit, and one to help people to build credit with a no-fee credit card that provides cash back and higher limits.

Approximately 70 percent of Petal’s card users had little to no credit history, Gross said, adding that cardholders with no credit history were able to raise their credit scores to an average of 678 after two months.

The new facility includes $100 million from Silicon Valley Bank and $26.6 million from Trinity Capital. The funding will enable Petal to focus on providing better alternatives to big credit card companies and to expand its user base to millions, Gross said.

“Having a bank endorse our approach is something we have worked at for years,” he added. “We have been able to prove, over the last few years, that using cash flow instead of credit scores is better at predicting creditworthiness.”

The funding complements Petal’s existing $300 million facility led by Jeffries in 2019. In total, the company closed on more than $440 million in debt and raised more than $100 million equity financing, according to Gross. This includes a $55 million Series C round of funding in 2020 led by existing investor Valar Ventures.

“SVB is proud to support the Petal team with this warehouse facility as they strive to enable individuals to access and build credit responsibly,” said Brian Foley, managing director of warehouse lending at Silicon Valley Bank, in a written statement. “Reaching 100,000 cards approved is a significant growth milestone and we look forward to continuing to work with Petal as the company matures to the next phase of growth.”


Petal is not alone in gaining investor attention for helping people build credit. Earlier this month, San Francisco-based SeedFi, a financial health company, announced a $65 million raise led by Andreessen Horowitz that included $15 million Series A funding and $50 million in debt. SeedFi plans to use the funding to build out its platform aimed at Americans who don’t have adequate resources to build credit, save money, access funds and plan for the future.

Bitcoin payments fintech Bottlepay raises £11m seed round

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Investors in the seed round of the Bitcoin-based global payments app Bottlepay include billionaire hedge fund manager Alan Howard.

Bottlepay, a payments app bringing real-time global payments in Bitcoin and other currencies, has closed an £11m ($15m) seed funding round.

The app aims to cash in on the boom in digital payments by giving access to a real-time open payment network. This allows instant payments, including micropayments and cross border transactions.

While Bitcoin has c.65 million owners around the world there is a lack of use of the cryptocurrency for transactions owing to cumbersome and expensive fees.

Crypto bulls, however, believe this can change over time. Micropayments make a potential use case. For example, buying access to a paywalled news article from a global publication for a small amount would currently be prohibitive in terms of the merchant charges on the transaction.  

“The payments ecosystem is undergoing monumental changes as we move towards a cashless society. Today’s consumer wants to be able to transact freely and easily, without the restrictions of a traditional bank. We believe that with this cash injection, we can build a leading company in this rapidly growing space which will allow people to send, spend and receive payments in a way that works best for them,” said Bottlepay’s CEO Mark Webster.

Bottlepay says its new app also enables seamless social payments with a single tweet, message or social media post on platforms such as Twitter, Reddit and Discord.

Built on Bitcoin protocols, Bottlepay users can buy, store, send and withdraw Bitcoin with a single slide, unlike other digital payment platforms, whose users cannot currently spend their Bitcoin.

Bottlepay will use the funding to expand its team, improve functionality and increase the geographical reach of the service over the coming year.  

Investors taking part in the round include British billionaire hedge fund manager Alan Howard, venture capital firm FinTech Collective, and financial services firm NYDIG and tech entrepreneur Phil Doye. 

Sean Lippel, Principal and Head of Digital Assets at FinTech Collective, said: “While nearly 65 million people own Bitcoin globally, only a small fraction of that number actually transact daily, meaning we’ve only just begun to scratch the surface on the broader payment use cases for Bitcoin as an open-source money network. We believe Bottlepay’s elegant and intuitive consumer interface, built strategically on top of the power of the Lightning Network, will unlock social, streaming, and micropayments for digital assets. We were attracted to the team’s unique combination of technical and design talent, bound together with a laser-focus on privacy and regulatory compliance”.

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