How payment companies struck gold among the 51 rounds raised last week

Our weekly roundup of the big FinTech trends from the past seven days is all you need to keep yourself updated on what’s happening in the FinTech industry.

The past week has given FinTech, InsurTech, challenger bank, cybersecurity and cryptocurrency aficionados many reasons to perk up their ears.

Investors and consumers in the financial sector are undoubtedly familiar with the many ways FinTech startups have changed payments. But while the ubiquity of digital payment firms may suggest there is little room for budding entrepreneurs to make a splash in the sector, a new Brazilian project has demonstrated that there’s still ample room for more players to squeeze in.

EBANX bagged the biggest round worth $430m last week – touting it as one of the largest investment rounds ever raised by a Brazilian FinTech company. The cross-border commerce project is a testament to the strength of the PayTech industry. The company, which has helped companies such as Amazon, Alibaba, Shopee, Spotify and Uber conduct commerce with over 70 million Latin American consumers across 15 countries through its proprietary platform, competes with payment behemoths such as PayPal, Stripe Connect, Payoneer, GoCardless and Apple Pay for merchants, among others.

The round comes on the back of several other Payment juggernauts having enjoyed much traction and growth in recent months. Stripe and Plaid nearly tripled their valuations in a year, reaching $95bn and $13.4bn, respectively. Marqeta is preparing to go public at a valuation rumoured to be north of $10bn, up from $4bn a year ago.

That being said, the global pandemic has clearly affected the payment sector. For instance, global revenues declined by an estimated 22% in the first six months of 2020 compared to the same period in 2019, the McKinsey Global Payments report found. Furthermore, investors’ spirit to pump money into the sector too dampened. PayTech companies raised over $11.8bn in 2020, a decline of 13.19% year-on-year compared to 2019, according to FinTech Global. The fall, which is the sharpest decline in recent history, is largely due to a fall in the wages and employment of migrant workers, who tend to be more vulnerable to loss of employment and wages during an economic crisis in a host country.

The public health crisis and its many repercussions — among them, government measures to protect citizens and rapid changes in consumer behaviour — were the reasons which changed the operating environment for payment businesses, large and small, worldwide. But with funding rounds such as EBANX along with other payment startups including Clair, Upflow, PayCargo, DNA Payments, Airbase and Volt which got funding last week, the downward graph might turn around.

EBANX could also be a good sign for the Brazilian FinTech landscape as the Latin American FinTech space has gone from strength to strength. Companies in the region raised $5.5bn across 328 transactions since 2015, according to FinTech Global’s research. In specific, the sector raised more than $2.8bn last year, a growth of 4.65% year-on-year compared to 2019. The momentum in funding and deal activity was maintained by the increased demand for digital services especially in the WealthTech and payments and remittances sectors amid a surge for contactless payments and digital banking services due to the pandemic. To add on, startups in LatAm added circa $1.1bn to their coffers in the first quarter of 2021. With companies like Loft and Nubank bagging massive rounds, it’s unsurprising that Brazilian companies took five spots on the list including the three largest deals in the region during the opening quarter.

Another interesting trend to pay attention to in the week that passed is that several PropTech ventures raised capital.

That is particularly interesting given the massive drop in investment recorded in this segment of the FinTech industry over the first six months of 2020. Between 2015 and 2019, the global investment into the real estate segment of the FinTech industry jumped from $1.3bn to $13.9bn, according to FinTech Global’s research. However, that figure dropped to $4.0bn in the first six months of 2020. That being said, it’s still more money raised in six months than in the entirety of 2018 when the industry was injected with $2.9bn by investors in total. Nevertheless, the sector did see some investment in the last week with PropTech firms such as Lofti, nesto and Handdii scoring funding, as reported by FinTech Global.

Apart from that, we noticed the regular smattering of cybersecurity startups raising capital that we have gotten accustomed to in these roundups since the outbreak of Covid-19 emboldened many cybercriminals. In response, enterprises around the world have upped their investment into their digital defences as IT professionals have pushed cybersecurity to the top of their priorities, which could explain why many cybersecurity companies have enjoyed reasonably big funding rounds. In the past week, Darktrace rival Immersive Labs, nSure, OCR Labs, Elisity, Threat X, Threatray, Claroty and Advens topped their accounts to fuel growth and business reach.

For one thing, FinTech Global unveiled the 100 most innovative companies in the sector around the world by announcing the ventures named on this year’s CyberTech100 list. You can find the full third annual list here.

With that all in mind, let’s take a closer look at the deals, shall we?

EBANX’s $430m round from Advent International 

The cross-border commerce platform in Latin America connecting global merchants with local consumers secured an investment of $430m from Advent International. The firm joins FTV Capital as a minority investor in EBANX.

The investment will be used to continue funding EBANX’s aggressive expansion across Latin America. Its CEO João Del Valle said, “Our goal has always been to develop the highest-performing digital payments solutions, recruit the best technology talent and business minds, and deliver a superior value proposition that makes it easier and more cost-effective for global companies to access and grow their businesses across Latin America.”

Guideline gains $200m 

Retirement plan solutions provider for SMBs Guideline raised $200m in funding.

The round was led by General Atlantic with participation from existing investors Generation Investment Management, Greyhound Capital, Felicis Ventures, Propel Ventures and others. The company plans to use the funds to further scale its offering of full-service 401(k) plans, as well as introduce new retirement plan solution products.

Former Barclays chief-founded 10x Future Technologies nets $187m 

10x Future technologies, the banking technology firm set up by former Barclays chief Antony Jenkins, sealed an oversubscribed $187m Series C financing round, co-led by funds managed by BlackRock and Canada Pension Plan Investment Board and supported by existing investors JPMorgan Chase, Nationwide, Ping An and Westpac.

The London-based technology company will use the funding to support its expansion plans into new markets, including North America, as well as further investment into the development of its cloud-native 10x SuperCore platform. Jenkins said, “With our microservices architecture and [application programming interface (API)]-first design, our platform has been purposefully designed to enable the world’s largest banks to transform their customer experience and economics.”

ThinCats collects £160m 

Alternative lender to UK SMEs ThinCats secured a £160m strategic investment from Wafra Capital Partners (WCP).

ThinCats, which has already lent nearly £1bn to SMEs, says the investment, alongside two bank funding agreements, will enable it to lend another £2bn.

Its CEO Amany Attia said, “This is an important next step for us as a lender and allows us to bring the benefits of non-bank lending to a wider universe of mid-sized businesses.”

WealthTech Addepar adds $150m to its coffers

California-based technology platform for wealth management Addepar raised $150m in Series F funding. D1 Capital Partners made the investment at a pre-money valuation of $2bn.

The company intends to use the funds to further accelerate growth, accelerating expansion of the business and workforce into new geographies and driving continued development of its platform. The company’s platform aggregates portfolio, market and client data all in one place and provides asset owners and advisors a financial picture at every level, allowing them to manage investments and make more informed decisions.

Claroty cashes in $140m

Developer of cybersecurity technology focused on the industrial side of the business Claroty closed a new round of funding before looking at an IPO. With the new Series D round of funding, the New York-based company now has amassed a total of $235m.

Leading this round were Bessemer Venture Partners’ Century II fund and 40 North, the investment arm of New York-based global industrial company Standard Industries. Another strategic investor, Korea-based LG, also joined this round. The firm works across industrial verticals including automotive, life sciences, food and beverage and critical infrastructure to protect IoT and industrial IoT, or IIoT, as well as secure remote access.

PayCargo raises $125m from Insight Partners

Freight payment platform PayCargo secured a $125m Series B investment from global venture capital and private equity firm Insight Partners.

The Covid-19 pandemic has rapidly accelerated the pace of digitalisation and adoption of electronic payment mechanisms in the cargo market where vendors and payers are forced to move away from paper-based processes to faster and easy-to-use digital payment tools. PayCargo is on track to process $10bn of freight-related payments in 2021 – a 250% increase from 2020. PayCargo is a freight payments network with over 67,000 active users remitting and receiving payments on the platform.

DNA Payments inks £100m

UK-based payments company DNA Payments raised £100m to accelerate the company’s growth and make new acquisitions.

The firm, which is authorised and regulated by the Financial Conduct Authority, under the Payment Services Regulations 2017 for the provision of payment services, signed a deal with the UK-based private equity firm Alchemy Partners for the latest investment. DNA Payments has fully cloud-based omnichannel payment processing capabilities. The company provides services to more than 45,000 merchants through 70,000 terminals.

nesto nabs $76m for its digital mortgage solution

Mortgage tech firm nesto closed its latest round of funding that will help accelerate its growth and offer more refined services for Canadians.

The $76m Series B financing round was led by Michael Rowell and Michael Paulus of Assurance IQ. Also involved in this funding round were Portage Ventures, Diagram Ventures, Breyer Capital, Marc Alloul, and other strategic investors. These funds will be used to grow nesto’s team and accelerate investments in new technology.

Immersive Labs reels in $75m 

Cybersecurity company that provides organisations with a platform to measure and improve cybersecurity skills across technical and non-technical teams Immersive Labs closed a $75m Series C funding round.

The round was led by new investors Insight Partners alongside Menlo Ventures, Citi Ventures and existing investor Goldman Sachs Asset Management. The company intends to use the funds to expand its international presence, tripling global headcount to 600 over the next two years and establishing operations in new regions throughout APAC and Europe.

Tractable earns the horn after $60m round 

Tractable, an AI company that assists insurers with accident and disaster recovery, raised $60m in a Series D investment round led by Insight Partners and Georgian. The round more than doubles the total amount of funding raised by Tractable from $55m to $115m.

Tractable’s AI works by analysing photos of vehicles that have been damaged in accidents to predict factors such as whether a car is repairable, or assessing what repairs should take place. This latest investment is expected to help Tractable focus on its core business of accident recovery, while also funding new AI solutions for assessing the condition of a car to inform sale and purchase decisions.

Betterfly bags $60m

Chile-based Betterfly, a technology company that combines well-being, insurance and social purpose, secured $60m in Series B funding from a group of backers including partners of DST Global as well as QED Investors, Valor Capital, Endeavor Catalyst and the SoftBank Latin America Fund.

The company raised a total of $80m since its inception in 2018. Betterfly, through gamification and behavioural science, tracks and rewards users’ good habits with charitable donations and life insurance coverage that grows daily.

Airbase banks $60m

CA-based spending management platform for small and midsize companies Airbase raised $60m in Series B funding.

The round, which brought total venture funding to $91m, was led Menlo Ventures and includes new investor Craft Ventures. Existing investors Bain Capital Ventures, First Round Capital, Quiet Capital, Webb Investment Network, and BoxGroup also participated. Other new backers included execs from Carta, Uber, Plaid, Coda, OpenGov and Dapper Labs.

The company intends to use the funds to further develop the platform and expand its business reach. Led by Thejo Kote, it provides a spend management platform for small and midsize companies by combining accounts payable automation, software-enabled corporate cards, and employee expense reimbursements.

Credit Sesame cashes in $51m 

Credit Sesame raised $51m in growth capital and acquired rent reporting platform Zingo. The funding round was joined by Healthcare of Ontario Pension Plan, Menlo Ventures, ATW Partners, Globespan Capital, IA Capital Group, Inventus Capital, and more.

It began life as a tool to help Americans access and boost their credit scores, winning over 15 million members. However, it has since diversified, developing a digital debit account, called Sesame Cash, to help customers grow their cash and credit together in one place. Having signed up more than a million users to the account in less than a year, the firm is now preparing to continue its product expansion.

BaaS Unit hauls in $51m 

Israel and NYC-based banking-as-a-service startup that empowers companies to embed financial services into their products Unit raised $51m in Series B funding. The round was led by Accel with participation from existing investors Better Tomorrow Ventures, Aleph, Flourish Ventures, and TLV Partners.

The company intends to use the funds to expand the team, accelerate growth, and fast-track its product offering to enable companies to build banking products in minutes.

Splash Financial collects $44.3m 

Digital lending platform that allows borrowers to shop and compare financial products from a network of lenders Splash Financial secured $44.3m in Series B funding.

The round, which brought total equity funding raised to date to more than $60M, includes partners of DST Global, Citi Ventures, Detroit Venture Partners, Firebolt Ventures, and existing investors CMFG Ventures and Northwestern Mutual Future Ventures. The company intends to use the funds to further accelerate growth within its lender network and automated underwriting platform.

Nebank Novo nabs $40.7m 

Challenger bank for small businesses, startups and freelancers Novo raised $40.7m in a Series A round of funding.

The FinTech raised the capital from Valar Ventures along with Crosslink Capital, Rainfall Ventures, Red Sea Ventures and BoxGroup. The funding will be utilized to expand operations, banking, product and, most importantly, engineering verticals and enhance hiring across key and support roles in India.

India-based FamPay banks $38m 

Bangalore-based FamPay raised $38m in its Series A round led by Elevation Capital. General Catalyst, Rocketship VC, Greenoaks Capital and existing investors Sequoia Capital India, Y Combinator, Global Founders Capital and Venture Highway participated in the new round of funding.

The raised funds will be used to build its leadership team and further fuel growth. FamPay makes it convenient for teenagers to make online and offline payments through the FamPay app and helps kids learn money management.

Hellas Direct scores €32m 

Greece-based technology-driven insurance company Hellas Direct raised a further €32m in funding, bringing the total raised to date to €56m.

Backers included the EBRD, Portag3, the IFC, Endeavor Catalyst and family offices including those of Jon Moulton and Lord O’Neill. Led by Alexis Pantazis and Emilios Markou, Hellas Direct is a digital-first, full-stack insurance company, empowered by technology and the use of advanced analytics.

InsurTech Akur8 reels in $30m

NY-based company automating insurance pricing with proprietary AI Akur8 closed a Series B funding round of $30m. The round – which brought total funding to $42m – saw the participation from BlackFin Capital Partners and MTech Capital.

Led by Samuel Falmagne, CEO, Guillaume Beraud-Sudreau, and Chief Actuary, Akur8 developed an AI-based insurance pricing solution that automates modelling for insurance companies while keeping full transparency and control on the models created, as required by regulators worldwide.

Cybersecurity firm Elisity lands $26m

CA-based provider of a platform for identity and behaviour-based enterprise cybersecurity raised $26m in Series A funding.

The round was co-led by Two Bear Capital and AllegisCyber Capital, with previous seed investor Atlantic Bridge also participating. Co-founded by Burjiz Pithawala, Sundher Narayan, Srinivas Sardar and James Winebrenner, Elisity provides a cloud-delivered cybersecurity platform that can analyse the unique identity and context of people, apps, and devices.

Volt closes $23.5m round 

UK-based payments company, Volt raised $23.5m in a Series A funding round. The capital raised will be used for expansion into new territories and building its international instant payments footprint.

The Series A funding round was led by EQT Ventures. Several high net worth individuals with payments industry experience, including execs from FIS Worldpay Group, Adyen also invested in Volt. There was also participation from existing investors Fuel Ventures and Augmentum Fintech PLC. Founded by Tom Greenwood in 2019, Volt offers access to open banking payments across Europe.

Finleap connect raises €22m

Berlin-based startup Finleap connect has raised €22m in its Series A funding round after its merger in 2019. The round was led by SBI Investment — a Japanese VC firm, along with participation from Ilavska Vuillermoz Capital, a Luxembourg-based fintech investor.

With the proceeds, the startup plans to launch new products for the European markets, which will further include expansion of connectivity across Europe with a special focus on Spain and Portugal. Finleap connect is looking to develop its value-added services, enhancing the use of financial data and targeting new market segments.

Hello Alice scores $21m 

Machine learning platform connecting small business owners to capital, networks and business services Hello Alice raised $21m in Series B funding.

The round was led by QED Investors with participation from Backstage Capital, Blue Ivy, Cathie Reid, BCO Venture Fund, Belle Capital, How Women Invest, Golden Seeds, Signia Venture Partners and Silicon Valley Bank among others. The company intends to use the funds to enhance the predictive capabilities on its platform to further personalised learning paths, scale capital deployed to small business owners and launch a mobile application.

Threat X rakes in $20m

Web application and API protection platform Threat X raised $10m in funding. The round was led by .406 Ventures with participation from existing investors Access Venture Partners and Grotech Ventures.

Led by Gene Fay ThreatX’s platform protects web applications and APIs from all threats, including DDoS attempts, BOT attacks, API abuse, exploitations of known vulnerabilities, and zero-day attacks. Its multi-layered detection capabilities accurately identify malicious actors and dynamically initiate appropriate action.

Refyne reels in $16m 

Bengaluru-based Earned Wage Access solution provider Refyne raised $16m in a Series A round to expand the technology team and scale growth initiatives.

This round was raised from DST Global and  RTP Global. This fundraise comes six months after the fintech startup raised $4.1m in seed funding in December 2020 from QED Investors and Jigsaw VC. Refyne provides employers with a plug and play software that enables employees to access their real-time earned salary. Employees can withdraw this amount using Refyne’s app at any point before their payday.

Clair collects $15m 

New York-based FinTech startup that provides instant pay access as a service for human capital management platforms, raised $15m in Series A funding. The round, which brought total funding to $19.5m, was led by Thirve Capital.

The company intends to use the funds to expand operations and its business reach.

Upflow bags $15m 

France-based company which enables businesses to collect customer payments Upflow raised $15m in Series A funding.

The round included participation from 9yards Capital, and angel investors including Maximilian Tayenthal of N26, Raffael Johnen of auxmoney, and Pierre-Dimitri Gore-Coty of Uber. The company, which attended YCombinator in Winter 2020, intends to use the funds for product development, for the opening of an office in NY to accelerate distribution in the US, and for tripling the size of its team within 12 months.

OCR Labs scores $15m for its ID verification platform 

Sydney-based OCR Labs raised $15m in Series A funding round led by the Turkish Investors, Oyak Group, reports state. The company plans to use the proceeds to expand its services in the UK and Turkish markets, innovate technology, and strengthen its team in London and Istanbul.

Launched in 2018, OCR Labs specializes in the digital ID verification space and solves significant challenges, including identity fraud and regulatory compliance through its proprietary technology.

TRM Labs scores $14m 

Blockchain intelligence company TRM Labs closed a $14m Series A funding round.

The round was led by Bessemer with participation from PayPal Ventures, Initialized Capital, Jump Capital, Salesforce Ventures, Operator Partners, Blockchain Capital and executives from Google. Led by Esteban Castaño, TRM provides blockchain intelligence to help financial institutions, cryptocurrency businesses and public agencies detect, investigate and manage crypto-related fraud and financial crime. Its risk management platform includes solutions for cryptocurrency AML, transaction monitoring and wallet screening.

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