The FinTech space continues to grow with no sign of slowing down and the 29 rounds raised last week prove that cryptocurrency companies and InsurTechs are the leading subsectors.
As more venture capital firms open up their wallets to pump in the dosh towards promising tech startups, the sector continues to witness a smattering of new startups being launched aiming to solve financial and regulatory pain points for consumers across the world.
Before we delve into individual subsectors, let’s look at the biggest round from the last seven days. London-based Smart bagged $230m in a Series D funding round to further strengthen its global retirement technology platform offering and expansion into the world’s largest retirement markets.
Chrysalis Investments joined Legal & General, JP Morgan, the Link Group, Barclays and Natixis Investment Managers as strategic investors in Smart. The investment from Chrysalis, whose portfolio includes Klarna, Wise (formerly TransferWise), Starling Bank, The Hut Group, and Graphcore, as well as InsurTech unicorn WeFox, will see Smart further grow its retirement technology platform offering in the UK, the US, Australia and the Middle East, with additional territories to follow including the Netherlands where the entire retirement system is moving to Defined Contribution (DC) – a retirement plan in which employees contribute part of their paychecks to an account intended to fund their retirements.
With mounting financial challenges, debt weighs heavily on retirees. The Government Accountability Office reported that 71% of older Americans now have debt compared to just 58% in 1989. This clearly indicates that the retirement savings system is in need of startups such as Smart to help people weather the financial effects – economic and otherwise – of the ongoing pandemic. DC assets are estimated to represent almost 53% of total pension assets.
Impact investing is indeed becoming increasingly alluring as last week Bethnal Green Ventures was acquired by socially conscious asset manager Connected Asset Management in a deal that will allow pension funds to take advantage of the high-growth opportunity to invest in British tech startups with clear and measurable social and environmental impact.
One of the sectors that grabbed the headlines last week for achieving cash injections was the InsurTech industry. Companies like INSHUR, EIS, Pathpoint, Hyperexponential and Bolttech – which also earned its horn – raised millions of dollars. As we have reported in the past, several market stakeholders have said that Covid-19 has highlighted the limitations of insurers’ old systems. As a result, they could be more prone to invest and partner with InsurTech startups, meaning these ventures could prove to be among the big winners of the pandemic.
The investment trends over the past year seem to give that idea some credence, with the sector having attracted a record $7bn level last year despite the coronavirus-caused economic uncertainty. In addition, the sector kicked off a strong start to 2021 with nearly $2.3bn invested across 126 deals in the first quarter. The top ten InsurTech deals in the first three months of the year collectively raised just under $1.2bn, making up 52.2% of the overall investment in the sector during the quarter. The total is much higher than the levels recorded in Q1 2020 when the ten largest transactions raised just over $500m proving that it continues to go from strength to strength.
All in all, it seems as if the InsurTech industry has continued to enjoy growth despite the pandemic.
Moving on, Mercado Bitcoin reeled in $200m in a fundraise which it touted as the largest Series B round in Latin America’s history and SoftBank’s largest investment in a Latin America crypto company. The investment round grants 2TM Group – the parent company of Mercado – a $2.1bn valuation ranking it among the top ten unicorns in LatAm. It signed about 700,000 new users up between January and May 2021 and now has a client base of 2.8 million overall. Mercado Bitcoin’s trade volume also increased to $5bn, surpassing the total for its first seven years combined.
Apart from Mercado Bitcoin, Nansen – an analytics platform for blockchain that unifies on-chain data with disparate market signals – too bagged a $12m round last week. It’s therefore easy to see how the market size for cryptocurrency is expected to reach $1087.7m by 2026, according to Statista.
It’s important to note that the cryptocurrency sector has been attracting much investment and interest from retail and institutional investors despite the global regulatory crackdown on digital assets, especially in China, Britain, and Japan. In fact, Binance, one of the world’s leading cryptocurrency exchanges, has been banned from operating in the UK by finance watchdog FCA. While the ban only covers regulated tokens which consist of Security Tokens and E-money tokens and cryptocurrency assets such as futures, options or leveraged trading, it’s proof that more crypto exchanges might come under fire.
And now, let’s look at the different rounds raised last week in more detail.
Smart secures $230m to revolutionise retirement savings
Smart, the global retirement savings technology platform provider that powers the Smart Pension Master Trust, secured a $230m Series D funding round. Chrysalis Investments led Smart’s Series D funding round with a £75m equity investment. The overall round will comprise £110m of primary and £55m of secondary equity.
Smart saw enormous growth in 2020 with assets on the platform growing by more than 160% to £1.8bn and the successful rollouts of the Smart platform with Bank of Ireland’s insurance arm, New Ireland Assurance and with global insurance giant Zurich and the Dubai International Financial Centre in the Middle East. The company is poised for further growth as a huge wave of regulatory change is sweeping the globe, with governments shifting responsibility for retirement liabilities from their own balance sheet onto the mass market, via the workplace.
Mercado Bitcoin adds $200m to its coffers
2TM Group, the parent company of Mercado Bitcoin, a Latin American cryptocurrency exchange, raised $200m in funding led by SoftBank Latin America Fund.
The company intends to use the funds to grow the team to 700 by the end of 2021, accelerate growth across its portfolio, which will also include digital wallet provider MeuBank, subject to regulatory approvals. In 2021, 2TM Group will also launch Bitrust, a digital custodian, subject to regulatory approval.
Led by Roberto Dagnoni and Gustavo Chamati, 2TM Group is a Brazilian holding company managing a range of digital asset services and solutions. Mercado Bitcoin is a cryptocurrency exchange, which processed transactions totalling almost $5bn in volume in the first five months of 2021.
Bolttech bags $180m, gains unicorn status
Singapore-based insurance startup bolttech raised $180m in series A funding round, which valued it at more than $1bn. Led by Activant Capital Group, the round was also joined by investors including Tony Fadell – Principal at Future Shape, Alpha Leonis Partners, Dowling Capital Partners, B. Riley Venture Capital, and Tarsadia Investments.
The proceeds will be used by the company to accelerate its growth and bolster its presence in the US. Funds will also be used to enhance technological and digital capabilities.
bolttech leverages its digital and data-driven capabilities to connect insurers, distributors, and customers.
EIS nets $100m
Digital platform provider for insurers EIS secured a growth investment of more than $100m from global alternative asset firm TPG, which invested out of TPG Tech Adjacencies (TTAD), its fund focused on the technology industry.
EIS will use the new funding to accelerate product development in risk, health and wealth, as well as to support its geographic expansion. Founded in 2008, EIS provides insurance software to enable insurers to operate in faster, more secure ways. With thousands of open APIs, the EIS platform gives insurers across all lines of business the freedom to connect to—or serve as a hub for—a vast ecosystem of emerging technologies.
Voyager wins $167m round
Voyager Innovations reportedly raised $167mn in an investor funding round managed by the World Bank’s International Finance Corporation for its Manila-based FinTech PayMaya.
Current shareholders, which include the Chinese technology giant Tencent, PLDT and KKR a US-based private equity firm, all took part in the latest funding drive that will see the FinTech embark on a mammoth growth plan, it said.
Founded in 2013, Voyager provides mobile payments and remittances to consumers, while enabling businesses to receive digital and credit card payments. The raised capital will be used to speed up its expansion plans which include obtaining a digital banking license from the Philippines Central Bank.
Incorta inks $120m
California-based direct data platform provider Incorta raised $120m in Series D funding.
The round was led by Prysm Capital, with participation from existing investors GV (formerly Google Ventures), Kleiner Perkins, M12 (formerly Microsoft Ventures), Sorenson Capital, Telstra Ventures and Ron Wohl, as well as a credit facility from Silicon Valley Bank with participation from new investor and strategic partner National Grid Ventures.
The company, which has raised $195m in total funding since its founding in 2014, intends to use the funds to expand go-to-market operations and meet global demand for its unified data analytics platform.
Tomo collects $70m
Real estate startup led by former Zillow executives Greg Schwartz and Carey Armstrong officially launched in Seattle, Dallas, and Houston with a giant $70m seed round — one of the largest ever for a real estate company.
Tomo aims to speed up the mortgage approval process and move it entirely online — like a PayPal for the mortgage industry. Its offers both a verified pre-approval, which does not require a “hard credit inquiry” and can be completed in three hours, and an underwritten pre-approval, which takes about a day and includes a “Closing Guarantee.”
Tomo faces competition from traditional mortgage providers and also more similar tech-fueled startups such as Accept, Lower, Maxwell, Lenda, SoFi and others aiming to digitize real estate processes and give buyers an edge.
Noname Security nabs $60m
Noname Security, an Israel-based enterprise API security company, closed a Series B funding round for $60m.
New investors as places like Next47, Forgepoint, and TSG and existing investors Cyberstarts and Lightspeed Venture Partners participated in the new round. APIs, which connect things like cloud and software applications and let them communicate with one another, have become the target of choice for cyberattacks. Noname’s security platform covers everything involving API security, including discovery, analysis and testing.
Orum hauls in $56m
Orum — a platform for frictionless financial infrastructure — announced it has raised $56m in Series B funding co-led by Accel and Canapi Ventures. And previous investors Bain Capital Ventures, Inspired Capital, Homebrew, Acrew, Primary, Clocktower, and BoxGroup also participated in the funding round. This funding round brings Orum’s total funds raised to over $82m.
Orum builds embeddable financial infrastructure products that enable 24/7/365 money movement. Through bleeding-edge machine learning and technology, Orum is empowering enterprises to move money seamlessly and with less risk—resulting in better experiences for the end consumer. The Orum team is helmed by expert fintech operators from LearnVest, N26, Square, Bread and Stash.
Kikoff gets $42m
California-based provider of a credit building platform Kikoff raised $42m in funding.
The company recently secured a Series B round for $30m led by Portage Ventures. Its Series A was led by Lightspeed Venture Partners and joined by GGV, Coatue and Core Innovation Capital. Kikoff is also backed by investors including basketball star Stephen Curry, Wex CEO Melissa Smith and former CFO of the U.S. Department of the Treasury, Teresa Ressel.
The company intends to use the funds to build out its technology and its team, across all function areas, to bring new products to market.
Stripe investor back London’s Codat in £29m funding
London-based company that’s focused on making financial software integrations simple Codat secured $40m (approx £29m) funding in a Series B round.
The round was led by Tiger Global, whose other investments include Stripe, Brex, and Checkout.com, with existing investors Index Ventures and PayPal Ventures also participating.
The company will use the funding to expand its US presence following the launch of the New York office in January this year, add new data products to its API, accelerate hiring, and onboard new customers. The company also plans to expand its San Francisco office as more startups developing products and services for small businesses, choose to run on Codat.
INSHUR adds $35m to its accounts
Global commercial insurance tech company INSHUR completed an additional Series B funding led by JVP alongside existing investors Viola Fintech, and MTech Capital.
The company intends to use the funds to accelerate global growth plans, enabling it to invest in technology, recruit people, and bring new InsurTech products to market. Inshur provides insurance protection for businesses and their workforces. The company, which is rolling out new commercial insurance products for delivery and courier drivers, currently has a team of over 100 based in New York, Brighton (UK) and Amsterdam.
RoadSync reels in $30m
Digital financial platform for the logistics industry RoadSync raised $30m in Series B funding. The round was led by Tiger Global, with participation from current investors Base10 Partners, Hyde Park Venture Partners, and Gaingels.
The company intends to use the funds to accelerate the development of its product suite and continue recruitment of talent in product, engineering, operations, and sales.
Pathpoint lands $30m
Digital E&S distributor for the insurance industry Pathpoint raised $30m in Series A funding, the third round of financing since the company’s founding. Investors include Caffeinated Capital, who led the round and repeat investors including SciFi VC, Founders Fund, and Chubb. Hiscox and other leading carriers also participated.
Launched in late 2020, Pathpoint offers retail agents P&C and professional lines products through the company’s online platform. Pathpoint combines world-class technology with the service capabilities of a full-service brokerage, a first for the E&S industry. Proceeds from the funding will be used to further invest in software engineering and R&D and invest in growing and scaling distribution.
Karat Financial collects $26m in a star-studded round
Karat Financial has raised $26m to create corporate cards that extend credit for the creator economy. The round was led by Union Square Ventures, with participation from GGV Capital, SignalFire and more than 20 creators including TikTok star-turned-VC Josh Richards and Jared Leto.
The San Francisco company wants to extend credit and financial services to influencers who are earning huge amounts of money, but often they can’t get loans from banks or credit cards because they have non-traditional jobs. These influencers fail to establish financial history through regular paychecks and are often denied credit. Karat created a “black card,” which can be used to pay for services and get money, but users pay it off each month like an American Express Card.
Slice scores $20m from Gunosy, Blume Ventures
Slice raised $20m in equity funding from existing investors Gunosy and Blume Ventures at an undisclosed valuation. The credit card platform offers customers flexibility in paying credit card bills as well as reward points on transactions.
Slice will use the capital to diversify offerings and expand its team. The Bengaluru-based firm is among a growing tribe of credit card-based utility payments startups that have seen increased traction on the back of the pandemic-led digitisation of the consumer economy. Slice says it has three million registered users and is currently registering a 25% monthly volume growth.
Highland Europe backs Hyperexponential in $18m funding
Hyperexponential (hx), which provides mathematical modelling software for the commercial insurance sector, closed an $18m funding round led by growth capital fund Highland Europe.
Hx helps companies build, deploy and update their insurance pricing models faster, via a SaaS platform called Renew which is aimed at actuaries, data scientists and underwriters. The InsurTech will use the funds raised in this funding round to accelerate its growth trajectory.
Fintual closes $15m round
Automated investing platform Fintual collected $15m in its latest funding round. Latin American investment firm Kaszek Ventures led the round, joining Fintual’s existing list of backers, which includes YC and ALLVP.
With the capital, Fintual hopes to grow its operations in Mexico and enter more countries, such as Colombia and Peru. Funds will also be used to expand its team. Fintual’s mobile app, which is regulated by the Comisión para el Mercado Financiero, offers a simple and transparent way to make investments.
Nansen nets $12m
Singapore-based Nansen, a DeFi-native crypto tracer, raised $12m in a Series A funding round led by Andreessen Horowitz (a16z). Also participating in the round was Skyfall Ventures, Coinbase Ventures, imToken Ventures, Mechanism Capital and QCP Capital.
Since the explosion of interest in DeFi, Nansen’s take has been to track flows of money between different smart contracts, identifying the hottest yield farming platform, for example. Currently, the platform has labelled some 90 million addresses, equating to about 70% of all on-chain DeFi volume.
Gotrade gets $7m
Robinhood rival Gotrade raises $7m led by LocalGlobe; adds 100K users in 3 months since launch. Additionally, the round also saw participation from Social Leverage, Y Combinator, Picus Capital and Raptor Group as well as angels associated with GoCardless (Matt Robinson), Skyscanner (Carlos Gonzalez-Cadenas), Deutsche Bank (Frank Strauss), and Rapyd (Joel Yarbrough).
Founded in 2019 by David Grant, Norman Wanto, and Rohit Mulani with an aim to remove the barriers and substantial costs involved with investing in US stocks, Gotrade gives anyone from anywhere access to ownership of big US companies by removing geographical boundaries for investing, charging no commission and by removing minimum deposit sizes.
FutureProof banks $3m
FutureProof, a San Diego startup that taps artificial intelligence to project the dollars and cents financial risk of climate change, came out of stealth mode with a $3m round of seed funding.
Founded in 2019 by a team that includes technologists and Ph.D. economists and climate scientists, the young company’s analytics score climate risk for assets ranging from homes to commercial buildings, mortgage-backed securities to physical facilities of 50,000 public and private companies across the globe.
It aims to bring climate into the mainstream of risk analysis that’s commonly performed by institutional investors, banks and insurance companies when investing or lending money.
Emma inks £1.9m
Personal finance platform Emma nearly doubled its crowdfunding target to reach £1.9m. The campaign, which is being held on the Crowdcube platform, was raised at a pre-money valuation of £34m.
Shares are priced at £1.75 apiece and Emma has distributed 5.39% of its equity to the investors. Emma is a personal finance platform that aims to become the control centre for people’s money. The FinTech company hopes to hit one million customers and release new products by the end of the year.
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