FinTech companies continue to blaze a trail with CyberTech and InsurTech enterprises in the lead. The 34 ventures in the sector that topped up their accounts last week prove that.
It’s been a busy week for FinTech entrepreneurs around the world. However, while challenger banks like Starling Bank and RazorPay, several buy now pay later (BNPL) companies, payment startups and a smattering of WealthTech enterprises all raised significant sums in the last seven days, two sectors that saw ventures secure additional funding proved particularly interesting.
Businesses in the CyberTech and InsurTech sectors successfully topped up their coffers last week. Each of these industries has seen substantial growth recently with more firms graduating to becoming unicorns, which is why the rounds raised caught our eye.
Let’s start with the InsurTech industry which also witnessed the largest round among all FinTech deals last week. France-based Alan scored $220m led by global investor Coatue achieving the unicorn status. The firm, which has doubled its members over the past 12 months, boasts of 155,000 members, aims to have a million members by 2023 and counts WeWork, Deliveroo, JustEat, Algolia and Swile as customers.
Apart from Alan, Level, InsurQ, Ignatica and Ornikar were among the other InsurTech firms which reeled in cash last week.
The upward trend in the insurance industry is proof that more investors are getting lured to pump in the dosh towards InsurTechs. In fact, the global InsurTech industry is expected to be worth $16.8bn by 2025 growing at a compound annual growth rate of 43% between 2019 and 2025, according to research from million Insights.
In fact, the sector, which enjoyed its best year in yet as it raised $6.2bn across 323 deals last year according to FinTech Global’s research, is poised to surpass that figure this year.
Furthermore, the UK InsurTech market, in particular, is going from strength to strength. Last week, a cohort of InsurTechs signed Tech Nation’s FinTech pledge with the aim to form more partnerships with policymakers. This move will inevitably boost the sector’s weight as a strategic subsector for the UK economy as well as encourage innovation.
Undoubtedly, the industry has been unaffected – rather progressed – after the Covid-19 crisis. Early on in the pandemic, FinTech Global discussed the potential future of the industry with sector stakeholders with many of them saying that InsurTech startups would be the winners emerging of the healthcare calamity. One of the reasons is the sector’s ability for quick adaptation to digitalisation.
InsurTechs continue to up their tech skills and prioritise their digitalisation efforts. “Where insurance companies need to adapt fast InsurTechs are well positioned to allow insurance carriers to adapt rapidly,” Samuel Falmagne, CEO and co-founder of Akur8, the InsurTech company, told FinTech Global at the time.
Over to the cybersecurity sector which continued its upwards graph from the previous weeks. With companies including IceKredit, Druva, HYPR, Perception Point, AppOmni and Sift banking large investment rounds, the sector is set to outrun the others. Digital trust enterprise Sift also earned its horn after its $50m round.
The increasing number of firms announcing cash injections is hardly surprising given that the threat from cybercriminals has risen on the back of the Covid-19 pandemic.
Now that remote working and work from home have become the new way that companies work, bad actors have tried to launch more sophisticated ransomware, phishing and fraud schemes, forcing SMEs to upgrade their cybersecurity strategies. As a result, the costs of security breaches has gone up since the coronavirus outbreak.
It’s unsurprising then that companies around the world have upped their investment into their digital defences as cybersecurity has become the top priority, which could explain why many cybersecurity companies continue to enjoy reasonably big funding rounds.
In the first quarter of 2020, the cybersecurity sector raised $1.5bn, according to FinTech Global’s research which is more than a quarter of the $4.7bn raised through the entirety of 2020.
Just like the CyberTech sector, investments into payment ventures last week can be seen from a similar light. Last week, we reported how startups such as Payhawk, Candex, Dama Financial and Plooto scored millions, therefore, painting a sweet picture for the sector.
Now that we’ve addressed the sectors, where might the action be at you ask? Two of the largest rounds we reported on last week which were RazorPay’s $160m and Chargebee’s $125m round, alongside CoinSwitch Kuber’s $25m investment, were from India proving that the FinTech ecosystem in the region is ripe for more such startups to sprout.
With that in mind, let’s take a look at the rounds raised last week.
Unicorn Alan’s colossal $220m round
French InsurTech Alan raised $220m in a funding round which valued it at $1.67bn.
The company now has over 160,000 people covered and generates around $120,000 in revenue every year. Coatue led the round with Dragoneer, Exor along with existing investors Index Ventures, Ribbit Capital and Temasek also participating.
Like other insurance companies, Alan too has to comply with capital requirements and it will need to raise more investment to insure more people. But the company still has enough in its bank account for another 12 to 18 months.
Razorpay nets $160m to boost its banking and payment services
Razorpay raised $160m in its Series E funding round led by GIC, Sequoia Capital India, Matrix Partners India and Ribbit Capital, raising its valuation to $3bn – triple the amount it was less than six months ago. The company has already raised $206.5m in four investment rounds since its inception in 2014.
The company offers payment, lending and banking solutions for merchants and enterprises. Its neo-banking platform, Razorpay X, helps merchants run current accounts and access credit from partner banks. It will use the newly infused capital to expand in South East Asian markets such as Malaysia, Indonesia and Singapore.
Payroll firm Deel earns the horn after a $156m round
San Francisco-based global payroll and compliance firm Deel secured a $156m series C funding round, giving the company a valuation of $1.25bn. Those taking part in the funding round included Uber CEO Data Khosrowshahi.
Deel said it aims to enable businesses to hire workers in a compliant manner anywhere. It can provide for pay in up to 120 currencies.
Data protection firm Druva banks $147m
Cloud-based data protection and data management technology developer Druva’s new $147m funding round took its valuation to over $2bn.
With the new Series H round, total funding in Druva has reached $475m. The round was led by Caisse de depot et placement du Quebec, a Quebec-based global investment firm. Existing investors Viking Global Investors and Atreides Management also participated in the funding round. It plans to further invest in better innovation and boost its marketing and international expansion.
Chargebee becomes newest FinTech unicorn after $125m round
The subscription billing and revenue management platform raised $125m in series G funding co-led by Sapphire Ventures and existing investors Tiger Global and Insight Venture Partners, along with participation from Steadview Capital. Chargebee is now valued at $1.4bn, which triples its valuation in less than 6 months.
With this fresh round of investments, the company will be increasing its investment in its global expansion and key partnerships alongside boosting its R&D. Founded by Krish Subramanian, Rajaraman Santhanam, KP Saravanan and Thiyagarajan in 2011, Chargebee is used by over 17,000 companies globally including Okta and Freshworks.
InsurTech Ornikar inks $120m
Paris-based Ornikar, an online driving school that also helps in obtaining a driving license, has raised $120m in its Series C round of funding which was led by global investment firm KKR.
With Ornikar’s recent expansion into Spain and launch of its auto insurance offering Ornikar Assurance, the company will use the proceeds from this round to accelerate its international development under the Onroad brand, develop new learning resources, and expand its range of insurance services.
Digital Asset hauls in $120m
Digital Asset, the company behind the Daml multi-party application platform, raised over $120m in Series D funding, allowing the company to expand its team and enhance its product portfolio with a new interoperability protocol that enables data interaction across blockchains and traditional databases.
The funding round was lead by 7RIDGE and Eldridge. The latest round of financing follows a $45m Series C round in 2020, which included participation from technology giants Salesforce, Samsung and VMware, as well as existing investors.
BNPL Zilch lands $80m
Klarna rival Zilch raised $80m in a Series B funding round with backers including Gauss Ventures and M&F Fund.
The company, which has raised over more than $120m over the last 2 years and is now valued at over $500m, intends to use the funds to launch in the USA and continue to grow in the UK by investing further in product innovation and development.
Neobroker BUX collects $80m
BUX raised $80m in a funding round led by Prosus Ventures and Tencent with participation from additional new investors ABN Amro Ventures, Citius, Optiver and Endeit Capital.
The investment will enable BUX to accelerate the expansion of its commission-free investment app BUX Zero. Recently, BUX extended its partnership with enterprise connectivity platform Yapily to France and Austria.
FintechOS reels in $60m
UK-based global technology provider for banks, insurers and other financial services companies FintechOS raised $60m in Series B funding.
The round was led by Draper Esprit, with participation from existing investors Earlybird Digital East, Gapminder Ventures, LAUNCHub Ventures and OTB Ventures, among others. The company intends to use the funds to expand operations and business reach to target financial institutions in Asia-Pacific, Middle East and Africa and North America.
Starling secures £50m
Digital lender Starling Bank has extended its latest funding round with a £50m investment from Goldman Sachs. The funding would be used to support its continued rapid and now profitable growth.
Since launching in 2017 Starling has attracted more than two million customers and is one of the few challenger banks to have turned a profit in the past year, it claimed.
Sift closes $50m round, earns the horn
Digital trust startup Sift Science Inc. raised $50m in new funding to expand its cybercrime fighting techniques to international customers.
The round was led by Insight Partners and included Union Square Ventures and Stripes. Founded in 2011, Sift offers a test and safety suite created to secure businesses at scale and support growth.
Mantl adds $40m to its account
NYC-based digital account opening solution for banks and credit unions Mantl raised $40m in Series B funding, bringing total funding to $60.7m.
The round was led by Alphabet’s independent growth fund, CapitalG, with participation from D1 Capital Partners, BoxGroup and existing investors Point72 Ventures, Clocktower Technology Ventures and OldSlip Group. The company intends to use the funds to hire new talent and expand its product suite.
SaaS-based AppOmni secures $40m
Security management platform provider AppOmni raised $40m in a Series B funding round led by venture capital firm Scale Venture Partners. The venture capital divisions of Salesforce and ServiceNow also participated in the funding round, which brings AppOmni’s total financing raised to over $53m.
The SaaS security solution firm helps organisations protect data in subscription-based cloud applications. With the Series B funding, AppOmni will accelerate its product development.
HYPR gets $35m
NYC-based passwordless multi-factor authentication company HYPR raised $35m in Series C financing.
The round, which doubled the company’s total funding to over $70m, was led by Advent International through Advent Tech. The company will use the capital to accelerate its go-to-market strategy and grow its global support organization doubling the global headcount, with hiring ongoing in every department.
IceKredit scores $35m
China-based AI-powered risk mitigation solution for businesses IceKredit closed a $33m series C1 round of funding.
The round was led by Guoxin Venture Investment with participation from Guohe Capital, Yunqi Partners, and China Creation Ventures. The company intends to use the funds for expanding the development team, investments and acquisitions and improving its business ecosystem.
Perception Point raises $28m
Israel-based email and collaboration security company offering fast interception of content-based attacks as a service Perception Point raised $28m in Series B, bringing the total funding to $48m.
The round was led by Red Dot Capital Partners and joined by global investor NGP Capital. The company intends to use the funds to accelerate growth, expand to new markets, accelerate product innovation and grow the team to support customer demand.
Tiger Global bets on CoinSwitch Kuber with a $25m investment
Bengaluru-headquartered crypto exchange CoinSwitch Kuber has raised $25m from Tiger Global in its Series B round. The platform allows users to trade in cryptos such as Bitcoin, Ethereum, Ripple, Dogecoin, Tether, and Tron among many others.
The company claimed that its user base has grown by 350% since January this year and has more than 4.5 million users with transaction volume in the north of $5bn in March 2021.
The Tifin Group lands $22m from JP Morgan
FinTech platform for wealth management firms The Tifin Group finalised a $22.3m round from JPMorgan, Morningstar and Broadridge.
Tifin‘s products assist with bridging the gap between retail investors, financial advisors, and asset managers. It aims to shape the future of investor experience with “a platform of intelligent products that recognise the uniqueness of each investor,” it said.
Payhawk tops its coffers with $20m round
Payments and expense management provider Payhawk raised $20m in Series A funding.
The round was led by QED Investors, with participation from existing investor Earlybird Digital East. The company intends to use the funds to expand coverage for businesses outside the EU and UK as well as support additional currencies with FX rates; streamline the cash flow from existing bank accounts to Payhawk.
American Express and JP Morgan lead $20m funding for Candex
Enterprise payments firm Candex has raised $20m as part of a Series A funding round led by Altos Ventures and joined by NFX, American Express Ventures and JP Morgan.
Founded in 2011, Candex acts as a master vendor for all small suppliers, allowing enterprises to pay Candex directly, which then remits payment to the suppliers. It aims to expand the Candex proprietary platform.
Cannabis payment and banking solutions provider Dama Financial scores $12.6m
Dama Financial, provider of access to banking and payment solutions through its FDIC-insured banking partners for the legal cannabis industry, closed its $12.6m Series B funding round, bringing Dama’s total funding to approximately $24m to date.
Currently serving over 7% of the legal cannabis businesses in California, operational in 12 states and with over 50,000 consumers with digital wallets in the US, Dama has processed over $2bn in transaction value since inception.
InsurTech Ignatica lands $7m
Insurtech that offers digital self-service and automation solutions for insurers Ignatica closed a $7m pre-series A funding. The investment was led by Lingfeng Capital with participation from SOSV Investment Funds, Australia-based Artesian, HK-Based AFG Partners Fund, as well as other investors.
Ignatica’s platform seeks to enable insurers to quickly build and launch new products at low cost while reducing administration costs and improving the experience for consumers.
Plooto bags $6.3m
Payment platform for SMEs Plooto raised $6.3m in Series A funding, led by FINTOP Capital, which was joined by Luge Capital and Inovia Capital.
For $25 per month, Plooto offers cash flow management tools that enable businesses to automate accounts payable and receivable functions under a single platform. The platform also integrates with popular accounting systems to eliminate data entry, as well as automate the reconciliation of bills and invoices.
The new funding will go toward product development, scaling the business and bringing in more sales and marketing support to serve the growing customer base.
Banking platform for kids Till collects $5m
Financial tool to track kids’ spending Till bagged a $5m funding round.
The round was backed by Elysian Park Ventures, Pivotal Ventures, Afore Capital, Luge Capital, Alpine Meridian Ventures, The Gramercy Fund, SM and Lightspeed Venture Partners. Several unnamed angel investors also contributed to the round.
Till’s platform is aimed at the 50 million pre-banked young people in the US, which represent more than $400bn in buying power.
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