Insights from Happenings in the Fintech Landscape - 210521

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Tuesday, May 25, 2021 / 09:00AM / By FintechNGR / Header Image Credit: International Banker


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Funding Rounds, Valuations & IPOs

There seem to be a lot of interest in the unorthodox sectors across the global fintech space, particularly segments that have often be overlooked, or pose a steep curve to navigate. One of this is Banking-as-a-Service (BaaS), an industry with really high projected growth rate in spite of the delicate nature of security that often tends to limit a full exploration of its possibilities within record time, especially by incumbent banks.

 

However, BaaS player, Treasury Prime, has raised $20 million in a Series B insider round co-led by Deciens Capital and QED Investors. With its API suite which integrates directly with a bank's core banking system, Treasury Prime provides a modern interface for digital onboarding. It also has features that helps fintechs surmount the periodic friction posed by interaction with legacy systems for managing FDIC-insured accounts in the provision of payments and fraud detection.

 

Atlantica Ventures has announced it is raising a US$50 million pan-African VC fund for tech and tech-enabled businesses from seed stage onwards. The VC firm has the likes of Paystack, Sendy in its portfolio and has already invested in two Nigeria fintech startups, Curacel and OnePipe through this fund.

 

Acquisitions, Partnerships & Expansion

More and more companies are trying to expand reach, diversify investment portfolio and try new markets. A Canadian payment firm Nuvei has agreed a $250m deal to acquire crypto firm Simplex, a fintech startup providing fiat infrastructure to the cryptocurrency industry. Nuvei will now be able to offer IBAN accounts to end users and corporations, future banking and card issuing capabilities as this acquisition will provide them with an electronic money institution (EMI) license.

 

The Big Fours seem not to be left out on the acquisition terrain as Ernst & Young (EY) has announced that it has acquired UK technology business and Microsoft Gold partner, Pythagoras Communications Holdings Limited. According to the firm, the acquisition supports its ambition to increase its range of technology services to clients. The acquisition is quite a strategic one seeing the services the acquired firm offers as well as partnerships, expertise and reach it brings to the table.

 

Cryptocurrency

Alibaba's Ant Group has announced it will let more users test China's digital yuan via its platform. Although not specific on what role the group will play in the project, it has stated that it would be involved with trials and research around the digital yuan along with MYbank, an online-only bank in which it has a 30% stake. It is worth noting that the People's Bank of China has distributed several million dollars' worth of its digital yuan.

 

Another country exploring a dimension of cryptocurrency is Italy that is set to roll out blockchain for digital sureties contracts. The proposed platform which is expected to be launched in the 2nd half of 2021 will enable sureties to be managed in the banking and insurance sectors through DLT technology following successful pilot trials. About 50 market participants took part in the sandbox test over a four-month period, with over 350 contracts managed having guaranteed sums ranging from 10,000 Euros to 1.4m  Euros and an average amount of 275,000 Euros.

 

We are beginning to see more global banks and payment companies join the cryptocurrency race, as a few like PayPal, and JP Morgan have earlier announced. Just recently, MoneyGram has also announced a partnership with cryptocurrency cash exchange, Coinme in a bid to enable cash funding and payout of digital currency purchases and sales in its locations, which is expected to kick-off in the coming weeks. Users will be able to purchase and withdraw their holdings of bitcoin in cash, however, it would be starting with select MoneyGram locations in the US and then international locations would follow.


 

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