Out of the 33 FinTech funding rounds we reported on last week, cybersecurity companies and cryptocurrency-based enterprises were the clear winners.
Risk information detection company Dataminr, cybersecurity firm Orca Security and cryptocurrency service provider Blockchain.com raised the biggest rounds last week in the FinTech sector. Here’s a closer look at each of these segments of the industry.
Starting with the cybersecurity and fraud detection sector; alongside Dataminr’s $475m round and Orca Security’s $210m cash influx, businesses like Morphisec, Jumio, Feedzai and Ranked Right too topped up their coffers. Notably, Feedzai and Orca Security became the new entries in the evergrowing list of unicorns. It should hardly come as a surprise that the sector has seemingly fared well compared to others, continuing the growth from the previous week.
To begin with, New York-based real-time information discovery platform Dataminr closed a ginormous $475m funding round, boosting its valuation to $4.1bn. Talking about the importance of risk management and the firm’s upward graph, founder and CEO Ted Bailey said, “Whether it’s for physical safety, reputation risk or crisis management, or business intelligence or cybersecurity, we’re providing critical insights on a daily basis. All of the events of the recent year have created a sense of urgency, and demand has really surged.”
Bailey added, “We live in an increasingly unpredictable world, where Dataminr’s unparalleled ability to detect breaking events and critical information far in advance of other sources is more relevant than ever for the world’s public and private sector organisations.”
Indeed, the Covid-19-induced lockdown forced a significant number of employees to work from their homes. As a result, cybercriminals leveraged the health crisis to launch more ransomware, phishing, financial frauds and other scams causing the cost of security breaches to surge. With the proliferation of bad actors in the online space, companies and governments have had to rethink their cybersecurity strategies.
Last week’s rounds come after FinTech Global’s data revealed the sector witnessed another record year in 2020 in terms of investment raised, despite the pandemic causing turmoil across markets worldwide. Given how the number of hack attacks, phishing schemes and other financial crimes have skyrocketed, it’s easy to see how investment into the CyberTech space set a new record last year and continues to do so this year.
Additionally, ID verification has become a priority for financial institutions as a measure to avoid identity theft and fraud. In fact, the total combined fraud losses climbed to $56bn in 2020 with identity fraud scams accounting for $43bn of that cost, according to Javelin Strategy & Research.
With investors pouring money into companies battling cyber attacks and data leaks in financial services, the total funding in the sector grew at a CAGR of 91.6% from nearly $4.7bn in 2019 t0 $6.2bn at the end of last year, according to research by FinTech Global. That is up considerably from 2016 when the global CyberTech sector raised $0.7bn across 106 rounds in total.
Clearly, as the global cybersecurity market is estimated to reach a value of $199.98bn by 2025, more startups are expected to mushroom in the sector globally.
Now, let’s delve into the digital asset industry where Blockchain.com snagged a £300m mega round last week.
Given that the cryptocurrency market is estimated to surpass $1.5bn by 2026, growing at a CAGR of around 5.7%, according to a report from ResearchandMarkets, the sector is expected to continually attract investment. It is therefore hardly surprising that just in the last week Avanti and Vega cashed in with $37m and $5m respectively.
Another reason behind the sector’s constant popularity is bitcoin’s volatile price which has now settled above the $55,000 line after setting an all-time high of $61,701 more than two weeks ago.
Blockchain.com’s raise came after interest in the cryptocurrency industry has seemingly spiked over the past few months with multi-asset investing and trading platform eToro planning to go public after a $10.4bn merger with Betsy Cohen-backed SPAC. More recently, digital currency exchange Coinbase filed for a direct listing which might value it at circa $100bn.
The last week also saw a healthy influx of capital into the PayTech industry with Afriex, Airwallex, Zaver, Hopper and TryNow raising significant multi-million rounds last week. Covid-19 can be partly attributed as a cause behind the success of the payments industry. Today with the ubiquity of payment apps and digital wallets, cash is no longer king.
During the last year, more consumers have become acclimated to online shopping, proven by Amazon’s market capitalisation growing by $716bn in the last year, according to markets tracker Y Charts. Consequently, companies in the buy-now-pay-later sector as well as those launching cardless payments have seen an upward graph.
Another sector that witnessed a smattering of startups raising capital was lending platforms and credit scoring firms. For instance, Kreditbee, True Balance, Jeff App, IndiaLends were among a few startups which scored investments last week proving that the competition in the space is only going to get tougher.
While the pandemic continues to benefit the FinTech sector in many ways, here’s a quick look at all of last week’s investment rounds.
Dataminr’s mammoth $475m round
The real-time data-processing company Dataminr’s valuation jumped from $1.6bn to $4.1bn after its $475m Series F funding round. Aiming to boost its corporate business line, international sales and AI platform, the company is also gearing up for a potential IPO in 2023. The funding will also allow the company to extend its reach across data sources such as social media platforms, blogs, web forums, audio and radio transmissions, the deep web, cybersignals and public IoT sensors.
It claims it was one of the earliest firms to deliver a digital warning on Covid-19 in late 2019 and released different indicators as the pandemic continued.
Blockchain.com topped its coffers with $300m at $5.2bn valuation
London-based Blockchain.com, which enables users to buy, sell and transact with cryptocurrencies, raised $300m in a Series C round.
DST Global, Lightspeed Venture Partners and VY Capital led the financing. With interest in bitcoin soaring on the back of a heady bull run, Blockchain.com claimed it has over 31 million verified users in over 200 countries and has tripled the number of active users over the past 12 months. This round comes just over a month after the firm raised $120m from a slew of investors including Google Ventures.
Orca Security bags $210m to combat digital criminals
The CA-based cloud security solution company raised $210m in Series C funding, gaining unicorn status.
The round was led by CapitalG, Alphabet’s independent growth fund, and Redpoint Ventures with participation from existing investors GGV Capital and ICONIQ Growth. The company, which has raised nearly $300m in combined funds at a $1.2bn valuation since its founding two years ago, intends to use the funds to continue to expand operations and its business reach.
The company’s SideScanning technology reads cloud configuration and workloads’ runtime block storage out-of-band, detecting vulnerabilities, malware, misconfigurations, lateral movement risk, weak and leaked passwords.
Feedzai raises $200m to fight fraud
Feedzai, a developer of risk management tools to prevent fraud and money laundering in transactions, raised $200m in a Series D funding round reaching a valuation above $1bn. KKR led the round, which also includes participation from existing investors Sapphire Ventures and Citi Ventures.
The firm which primarily offers a financial crime prevention and risk management solution, intends to use the funds to accelerate global expansion, further develop its product offerings and boost its partner strategy.
Hopper secures $170m to ease travel payments
Hopper, the app known for monitoring flight prices and suggesting when to book travel, raised $170m in a Series F round led by Capital One. The company also ventured into a partnership with Capital One to launch Capital One Travel, a booking service for cardholders.
The new funding comes after a difficult year for the travel industry but ahead of an expected resurgence in leisure travel, it said.
Identity verification firm Jumio lands $150m
Palo Alto-based Jumio closed a $150m investment from private equity firm Great Hill Partners. The identity security company plans to use these funds to develop its software by automating its identity verification tools. In addition, it plans to expand the reach of its KYX Platform and AML compliance services.
Founded back in 2010, its main offering is an AI-based digital ID verification service that can digitally authenticate documents such as passports and driving licenses. The company claims to have pioneered the selfie ID with the aim to establish people’s credentials quickly. In addition, its platform offers transaction monitoring and anti-money-laundering services to help businesses ensure they stay in compliance and protect against fraud.
Airwallex snags $100m in a Series D round
The Australia-based global FinTech payment platform raised $100m in a further Series D extension at a valuation of $2.6bn.
The round, which brought total funding raised to date to $500m, was led by Greenoaks with participation from Grok Ventures, Skip Capital and ANZi Ventures. It intends to use the funds to further accelerate global expansion, explore new partnerships and continue with product and engineering innovation.
Kreditbee cashes in $70m to become the leading lending solution
India-based Kreditbee raised $70m in follow-on funding just a month after its $75m Series C fundraise.
The investment was led by NewQuest Capital Partners, a TPG-backed Asia-Pacific-focused secondaries private equity platform and Motilal Oswal Private Equity.
With the new capital influx, the entity looks to scale up its lending portfolio beyond personal loans into other lending products, value-added services, deeper channel integrations and partnerships.
Freetrade plans Irish expansion with $69m funding
UK-based investment platform Freetrade has raised $69m in a Series B funding round led by growth equity firm Left Lane Capital.
The news follows a period of significant growth with user numbers hitting 600,000 and trade volumes in the first quarter of the year exceeding £1bn.
The firm whose proprietary brokerage technology offers retail investors access to global stock markets, intends to scale its products and grow in international markets which includes Ireland where it plans to launch this year.
Axis Security bags $50m
The California–based Zero Trust Network Access company, raised $50m in Series C funding.
The round, which brought the total raised to date to $100m, was led by new investor Spark Capital with participation from existing investors Canaan Partners, Ten Eleven Ventures and Cyberstarts.
The company intends to use the funds to accelerate product development and feature velocity and expand go-to-market initiatives. It will also expand its direct sales teams and partnerships with security information and event management.
Digital banking firm Greenwood lands $40m
The Atlanta-based FinTech closed a $40m Series A funding from a long list of backers including Truist Ventures.
Founded by Civil Rights leader Andrew J. Young, rapper and activist Michael “Killer Mike” Render and Ryan Glover, founder of the Bounce TV Network, Greenwood is a modern digital banking services platform for Black and Latino individuals and businesses.
The company intends to use the funds to continue to expand its business reach and build a range of financial products and services for financial empowerment.
Drip Capital scores $40m in new funding round
Drip Capital, the firm that focuses on providing trade finance to exporters and importers entered into a partnership with California-based East-West Bank following a $40m credit facility. The credit will be used by Drip Capital to offer its trade finance solutions to a wider range of SMBs.
Post this funding, the firm plans to reach 700-1000 SMEs over the next two years and increase its customer base from India by 50%.
Crypto firm Avanti closes a $37m Series A round
The digital assets company secured $37m with the aim to launch a fully-fledged crypto bank. The funding round, which brings Avanti’s total amount of raised capital to $44m, included among its backers Binance.US, Coinbase Ventures, ECMC Group and Morgan Creek Digital.
According to the Wyoming-based company, the funds will also be used for regulatory compliance, engineering services and operational expenses.
Vórtx banks $35m in a Series B
The Brazil-based tech-enabled corporate and trust service provider for fund managers and corporate issuers, raised $35m in Series B funding led by FTV Capital.
The infrastructure platform intends to use the funds to accelerate technology enhancements and market presence in the financial back-office market.
Morphisec nabs $31m to boost its cybersecurity tools
Cybersecurity company Morphisec closed a $31m round led by JVP with participation by other existing investors including Orange and Deutsche Telekom Capital Partners.
The Israel-based company provides endpoint protection for workstations, servers and cloud workloads. Founded in 2014, the company has now raised $50m to date.
The firm aims to focus on equipping SMEs with tools to help secure employee devices and backend applications. Commenting on the round Chief Executive Officer Ronen Yehoshua said, “Midsized enterprises are historically underserved by the cybersecurity market and left behind by cost-prohibitive tools and staff constraints.”
Financial surveillance firm VoxSmart strikes a $25m deal
Led by Toscafund Asset Management, VoxSmart’s $25m funding round aims to support its further development and growth particularly into North America and the emerging markets. The firm also aims to boost its product development in key areas such as instant message capture on emerging channels such as Telegram and Signal.
The surveillance firm supports over 100 blue-chip financial market customers to monitor and reconstruct trade chatter from voice, mobile, email and messaging in order to detect signals of malpractice and market abuse.
Neobank Zopa scores £20m
Zopa raised an additional £20m nine months on from gaining its full bank licence. This represents a significant vote of confidence following the initial success of its bank launch and growth of its latest products, it said.
The digital bank claimed it has already attracted over £250m in deposits. Alongside the continued growth of its personal loans business, Zopa’s focus will be to further fuel growth.
WealthTech startup Pluang bags $20m
Indonesian FinTech startup Pluang raised $20m in its latest round of funding led by Openspace Ventures.
Pluang will use the new funds to launch several new asset classes and offer more proprietary financial products. It will also introduce a way to utilise government bonds as a savings product. In addition, it will implement several automated features which allow users to make saving a routine habit.
E-commerce startup TryNow bags $12m
TryNow, a try-before-you-buy software for Shopify brands, landed $12m in a Series A funding round from Third Kind, Shine Capital, Craft Ventures, SciFi VC and Plaid co-founders William Hockey and Zachary Perret.
The San Francisco-based company is mixing the StitchFix and Affirm business models to bring Shopify Plus brands from the dressing room into your home, enabling users to check out items for free, try them in the comfort of their own home, return unwanted items easily, only paying for what they keep. Additionally, TryNow’s proprietary fraud management suite aims to ensure that brands are able to capture funds at the end of the trial period.
InsurTech Counterpart hauls in $10m led by Valor Equity Partners
The Los Angeles-based InsurTech firm which leverages technology at every touchpoint – application submission, coverage selection, binding, claims management, and loss prevention for SMBs, bagged $10m from Valor Equity Partners, early backers of pioneering ventures like Tesla, SpaceX, Addepar, and GoPuff.
With the aim to help business stakeholders navigate the challenging operating environment of insurance, CEO Tanner Hackett believes that “The insurance industry has an opportunity and obligation to use all available information to help small businesses navigate today’s newfound risks.”
True Balance banks $10m in debt funding
The FinTech organisation, an RBI authorised fintech app operated by Balancehero India Private Limited, the wholly-owned subsidiary of Balancehero Co. Ltd. Korea secured $10m in debt funding from Northern Arc.
The firm that aims at providing good financial products to customers at affordable convenience, plans to expand its portfolio to low-income groups.
Lev lands $10m in seed funding
The commercial real estate financing transaction platform raised $10m in seed funding.
The round was led by Pete Flint from NFX. Other investors included Caanan Partners, and JLL Spark, the strategic investment arm of commercial real estate services firm JLL. Previous lead investors Animo Ventures and Ludlow Ventures also participated in the financing. The company intends to use the funds to continue to expand operations and its business reach.
Meniga pulls in €10m in funding
Meniga closed a €10m investment round led by Velocity Capital Fintech Ventures and Frumtak Ventures.
The funding will be used for continued investment in Meniga’s R&D activities and in particular the development of innovative green banking products. In addition, the new injection of investment will help strengthen Meniga’s sales and service teams to meet growing demand and changing dynamics in the global digital banking market.
Trace inks $8.3m for developing financial workflow
Trace, a San Francisco-based service desk for finance teams, raised $8.3m in seed funding led by Greylock and Uncork Capital. Claiming to b the first service designed specifically for finance teams to interact with the rest of the business, the firm provides tools that involves budgeting, accounting, procurement and other tasks.
It has a dozen employees, mostly in R&D with plans to add to that number as the business grows.
IndiaLends adds $5.1m to its coffers
India-based digital lending platform IndiaLends raised $5.1m in a funding round led by existing investors ACP Partners and DSG Consumer Partners.
The firm will use the funds to expand its technology platform, increase its market footprint and amplify its product offerings to meet the pent-up demand in a post-COVID economic recovery.
IndiaLends uses its transparent and highly advanced automated processing system to offer unsecured credit products to a customer base of over eight million through its 50-plus bank and NBFC partners across the country.
Vega closes $5m funding round
The Gibraltar-based DeFi platform for derivatives trading protocol raised $5m in funding.
The round was led by Arrington Capital and Cumberland DRW, with participation from a slew of investors including Coinbase Ventures, ParaFi Capital, Signum Capital, CMT Digital, among others.
Led by Barney Mannerings, Founder, Vega aims to democratize markets by enabling anyone to create and launch a derivatives market while eliminating centralized gatekeepers and decentralizing governance, allowing for instant settlement, removing the conflict of interest from markets, reducing fees, and enabling high-volume derivatives trading.
Fixico adds €5m to its account
Fixico raised an additional €5m in funding, bringing its Series A round to €12m, therefore preparing the ground for further expansion in Europe.
The Series A round extension led by Autotech Ventures with the input of Finch Capital and all existing shareholders, brought Fixico’s total funding to €19.3m. Despite the pandemic, the company grew by 300% in 2020, it said. It currently works with over 150 partners in the fleet, rental, insurance and leasing industries.
Afriex reels in $1.2m in seed funding
YC-backed Afriex bagged $1.2m in a seed funding round. The startup is looking to scale up its team and expand its presence across other markets.
Founded in 2019 by Tope Alabi and John Obirije, Afriex offers an instant, zero-fee money transfers service to Africans. The platform provides features like allowing users to make cash deposits, transfer money to bank accounts and withdraw money.
Jeff App gets $1m to boost financial inclusion in Asia
The Latvian startup which provides a data-enabled loan brokerage platform for unbanked customers in Asia, closed a $1m financing round led by the Estonian Business Angels Network syndicate.
The funds will be used to launch new products and fuel growth in Vietnam, their first market, before expanding into further countries in Southeast Asia that range from a free credit score and insurance offers to digital discount coupons and mobile wallet cashbacks.
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