Fintech Inside #6 - 17th Oct, 2020 | Fintech Market Share
Hi, Osborne here.
Welcome to the sixth edition of Fintech Inside. Fintech Inside is the front page of Fintech in emerging markets.
This week there was lots of news of Visa and MasterCard partnering with several companies. At least in India, it’s likely that these partnerships are possibly to drive ease of payments in anticipation of the festive season. When UPI was launched in 2016, it was touted as the “card-killer”. Between then and now, card networks seem to have only gotten stronger.
This past week has also been an incredible week for blockchain and cryptocurrencies, especially in Asia and Europe. China began testing it’s digital yuan with USD 1.5 mn in circulation. A Singaporean blockchain-based bond exchange platform received approval from MAS. The Italian Banking Association has implemented an industry-wide blockchain system for payments reconciliation. Many more updates in the newsletter.
Oh and also, Indonesia’s Central Bank is about to lose its political independence.
This post as well is long, if you have ideas on how to make it short, please send ideas.
Diving in
One Big Thought 🤔
Fintech gaining market share and the need for inclusive-ness
By now most of you would have seen this chart. It might not be accurate because Fintech’s are largely private and valuations of the same are debatable. But it’s a stunning chart. The chart from The Economist’s report, aptly titled “The Digital Surge” talks about how fintech’s are growing in prominence. Conventional banks now account for only 72% of total market value of global banking and payments landscape, down from 81% at the start of the year and 96% from a decade ago.
This is great and with it, comes some important things to keep in mind as we build away. Primary among them: more female participation. Think about it, among Indian Fintech’s how many female founders do we have? Ok, forget founders, how many senior management are women? Without women representation in decision-making capacities, our products and distribution will continue to be ignore half the population. We can debate the terms “Bharat”, “India-2, 3, 4,” etc. but we’re forgetting the most important one and the largest market - “Women”!
Space is constrained in this post, but as you can imagine, plenty more that we need to focus as Fintech’s gain a larger share in the overall financial services market.
Fintech’s Hiring 💼
Finin, an Indian neo bank, is hiring a Sr. Backend Dev (Python/Django) with transition to CTO (based on performance). Apply by email to the founder
If you’re a Fintech who’s hiring I’d like to help. Write to me and I’ll put your requirement here.
India 🇮🇳
Market Updates: 📰
Reserve Bank of India (RBI), India’s central bank, has appealed to the Supreme Court of India to allow NPA classifications Read More
6.95 mn “e-invoices” created by 71,000 users within 7 days of launch, claims the Ministry of Finance, on its new centralised e-invoice platform. The platform is created to ensure compliance with GST and other laws Read More
Indian banks (Bank of Baroda and Federal Bank) are involved in another scam along with two brothers who were CEO’s of Fintech firms Finablr and NMC health. The scam relates to financial irregularities. The firms are subsidiaries of a UAE-based hospital operator which was operated by BR Shetty Read More
Paytm, an Indian payments platform, announced the launch of same day settlements for merchant payments. This move will be massive as most other platforms that minimum T+1 days to settle Read More
State Bank of India, largest Indian public sector bank, faced some technical problems on its core banking system except ATM and POS services. Read More
CapitalFloat, an India small business lender which counts Amazon India as a shareholder, claimed that it crossed 1 mn borrowers and USd 1.2 bn in disbursements since inception Read More
Google Pay, Google’s Indian payments arm, has partnered with Axis Bank and Visa to launch ACE Credit Card, a tokenised credit card. The card comes with unlimited, minimum 2% cashback on all transactions Read More
Non-life insurance industry registers a 4.4% drop in gross direct premiums. People expect that health insurance premium would have risen Read More
Bank credit to micro, small businesses was up 5.4% in August from year ago but contracted 3.9% in FY21 so far, in a report published by RBI. Read More
Signzy, a RegTech startup that provides digital KYC solutions, has signed a partnership with Mastercard to roll out Video KYC Read More
Khatabook has rebranded its small business storefront app to MyStore amid legal issues with competitor MyDukaan. This battle has had quite the twists and turns and now hopefully things get settled Read More
As per the latest RBI Handbook of Statistics, digital payments volume in India has grown at a CAGR of 55% over the past five years (FY16-20). The value of digital payments has grown at a CAGR of 15% over the same period. Read More
PhonePe, Flipkart’s payments arm, launches car and bike insurance with its insurance partner Bajaj General Insurance Read More
IKEA partnered with Citibank India and Mastercard to offer a ‘IKEA Family Credit Card by Citi’. Just in time for Diwali. Read More
EarlySalary, a consumer lender, has launched a virtual credit card in partnership with RuPay for instant credit Read More
YONO, digital arm of India’s largest public bank SBI, claimed to have disbursed USD 733 mn (83% YoY) via loans to consumers in Jul-Sept-2020 quarter. Read More
India’s Ministry of Finance will reportedly not mandate domestic firms to list in India if they list in overseas markets Read More
OkCredit, a digital book keeping app for small businesses, is seeking M&A opportunities. OkCredit is in talks with Khatabook, Udaan and others while seeking a valuation of USD 150 mn (half of what it was when they raised their last round) Read More
Slice, Indian pay later startup for millenials, partnered with Visa to launch a “no-fee” credit card. Read More
Flipkart, Walmart-owned ecommerce platform, partnered with Visa to remove OTP requirement for payments below INR 2,000 (USD ~30). FYI, RBI has mandated that no OTP will be required for transactions below INR 2,000 but this is still not widely implemented Read More
Open, a neo bank for businesses, launched a business debit card in partnership with Visa and Equitas Small Finance Bank. Open claims to have 650K users and processes USD 15 bn of transactions annually Read More
Funding Announcements: 💰
Razorpay, Indian payments processing company, raised USD 100 mn in a round co-led by Singapore’s GIC and Sequoia. Razorpay was founded in 2014 and processes USD 25 mn in payments volume annually. Read More
Finova Capital, Indian small business lender, has raised USD 35 mn from existing investors Sequoia Capital and Faering. This was probably Sequoia’s quietest investment and most likely a hedging investment to its high-risk portfolio Read More
Kredily, Indian HR services and Fintech SaaS platform, raised its Pre-Seres A funding from Artha India Ventures. Kredily provides a free HR management platform with Fintech features e.g. payroll, salary advance, insurance etc. Read More
Dukaan, an Indian digital storefront app for small businesses, raised USD 6 mn from Matrix Partners and Lightspeed at estimated valuation of USD 22.5 mn. FYI, Lightspeed is also invested in OkCredit which is seeking M&A opportunities Read More
South East Asia 🌏
Market Updates: 📰
BondEvalue, a Singaporean blockchain-based bond exchange, received an approval from MAS, Singapore’s central bank, to operate as a Recognised Market Operator (RMO). BondEvalue graduated from MAS’ regulatory sandbox Read More
Singapore’s businesses are struggling to get paid after MAS ordered Wirecard to cease operations in Singapore. Wirecard was a major card processing co. in the region. PineLabs was keen on acquiring Wirecard’s business Read More
AppotaPay, the payments arm of gaming producer Appota Group has received payments intermediary license from State Bank of Vietnam. AppotaPay becomes one of 39 companies with the payment license, reminiscent of India’s payment landscape in 2015-2016 Read More
Philippines has started registering millions for National ID card. The move is aimed at increasing adoption of digital payments Read More
ANTGroup is facing delays in its upcoming IPO after it granted investors exposure to its IPO via five funds on the Alipay app. Alipay is the exclusive third-party distributor of the IPO Read More
VinGroup, large Vietnamese conglomerate, launched VinShop - a mobile app for small stores to digitise their operations including order management, supply management, payments and more Read More
Finaxar, a Singaporean business lending platform, has partnered with Visa to launch a spend management solution for businesses Read More
Indonesian state-owned banks - BRI, Mandiri and BNI, will merge their shariya banking units to create the 8th largest lender in the country. This move is expected to spur the shariya banking movement in the largely Muslim country Read More
Indonesia’s parliament is in talks to delete ‘political independence’ from its Central Bank law of 1999 thereby making the country’s central bank less independent. There are several other recommendations being made. The changes is expected to sail through as the ruling party controls 70% of the seats Read More
DBS, in its report says that open banking will be a bigger disruption than digital banking. Singaporean government launched an open banking API exchange (APIX) in 2018 which has 54 financial institutions and 351 fintech companies Read More
Funding Announcement: 💰
Seems there was no Fintech funding this past week in SEA. If you believe I’ve missed out on it, please reach out to me.
Europe 🇪🇺
Market Updates: 📰
London Stock Exchange agreed to sell Borsa Italiana, Italy’s stock exchange, for EUR 4.3 bn to Euronext. The deal subject to LSE getting approval from EU regulators for the purchase of data platform Refinitiv Read More
Enel, an Italian energy company, is diversifying to Banking and will provide digital banking services to its customers. It’s 2020, that’s not weird anymore. Read More
Financial leaders of the G7, world’s seven biggest economies, will reportedly oppose Facebook’s Libra from launching citing lack of regulations Read More
Revolut is likely to apply for a US banking license (called a Bank Charter) to offer banking services in US. The company launched in US only in September and was last valued at USD 5.5 bn Read More
Wisepay, a UK-based school payment service, was under cyber attack compromising card data of parents and 300+ schools Read More
SwissRe and Daimler Automotive have formed a partnership to launch Movinx that seeks to reinvent car insurance. Movinx will act as a Managing General Agent that can design its own products without the balance sheet risk Read More
Telegram adds payments feature with Uk-based Ecommpay. The payments will be available to business accounts via the chatbot feature Read More
Italian Banking Association’s blockchain platform, Spunta, is now live on 100 Italian banks. Spunta is a blockchain based inter-bank reconciliation platform and jointly developed by the banking industry in Italy Read More
Paypal is rolling out its buy-now-pay-later program to UK this month after launching it successfully in US and France earlier this year Read More
France’s junior minister Cedric O told Fintech entrepreneurs to establish more partnerships with Banks to reduce BigTech’s influence on the financial services sector in France Read More
PayRay, a Lithuanian small business lender, received a banking license in the country and launched its banking services. FYI: since UK is undergoing Brexit, Lithuania is becoming the new hub for Fintech licenses in Europe. Read More
Funding Announcements: 💰
Molo, UK’s first digital mortgage lender, has raised GBP 266 mn in equity and debt from Macquarie Group and other real estate funds. Molo claims to redefine mortgage lending from scratch Read More
Indiabulls India, an investor in OakNorth, a London-based small business lender, sold its entire shareholding at USD 2 bn valuation i.e. 25% discount to previous round Read More
N26, German digital bank, is looking to raise a new round of funding after raising USD 100 mn in May, 2020 which valued the company at USD 3.5 bn Read More
Aave, a UK-based Ethereum loan protocol, raised USD 25 mn from Blockchain Capital, Standard Crypto, Blockchain.com Ventures and others. Founded in Jan-2020, the company plans to use the funds to expand to Asia Read More
Spendesk, a French corporate credit card startup, raised USD 18 mn from EightRoads. The platform allows business to issue virtual and physical credit cards to small businesses with spend management features Read More
Other Notable Nuggets 🏷️
Seven Central Banks publish their report on central bank digital currency (recommended)
The Kingdom of Saudi Arabia has launched a Fintech Accelerator Program
Saudi Arabia’s National Commercial Bank is acquiring it's rival Samba Bank for USD 14.8 bn
Interview with Harit Talwar, Goldman Sach’ outgoing head of consumer banking
Economist Report on how Fintech business models are changing
Chase launches free checking account for kids, teens
China begins testing digital “yuan” by giving away USD 1.5 mn worth of it
Financial Stability Board of the G20 says that Emerging Markets should rewrite financial rules to rein in Big Tech
Clair, an American consumer lender to pay gig workers instantly, raised USD 4.5 mn
Wealthsimple, Canadian robo-advisory platform, achieves USD 1.5 billion valuation on new fundraising round
Alternate Lending - State of the Market Report in UK (Free)
Deloitte Report: Global Banking Maturity Report 2020
Stripe is acquiring Paystack a payments co. in Nigeria for USD 200 mn
That’s all folks
If you’ve made it this far - thanks! As always, you can always reach me at connect@osborne.vc. I’d genuinely appreciate any and all feedback. If you liked what you read, please consider sharing or subscribing.
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See you in the next edition.