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French startup <a href="https://lydia-app.com" target="_blank">Lydia</a> is better known as the dominant app for peer-to-peer payments. But the company has been adding more features, such as a debit card, account aggregation, donations, money pots and more. This week, the company is adding <a href="https://lydia-app.com/fr/products/remunerated-account" target="_blank">savings accounts</a> thanks to a partnership with French fintech startup <a href="https://www.cashbee.fr" target="_blank">Cashbee</a>.
If you aren’t familiar with Cashbee, the company lets you open savings accounts through a mobile app. After connecting your bank account with Cashbee, you can transfer money back and forth between your bank account and a savings account.
Right now, Cashbee partners with <a href="https://www.mymoneybank.fr" target="_blank">My Money Bank</a> for the savings accounts. Cashbee doesn’t keep your money, it just acts as a middle person between your bank account and My Money Bank. With those savings accounts, users can expect an interest rate of 0.6% after an introductory rate of 2% for a few months.
Lydia basically offers the same terms and conditions with a few differences. Instead of earning 2% interest for the first three months, Lydia users only earn more interests during the first two months.
The other big difference is that Lydia asks you to put at least €1,000 on your savings account when you open it. If you go through Cashbee’s app, you only have to put €10 or more. But users can do whatever they want after that when it comes to putting some money aside and withdrawing money from the savings account.
But the fact that Cashbee is seamlessly integrated in Lydia is interesting. It’s going to expose Cashbee to a lot more users as Lydia has more than 5 million users. It’s also an important features if Lydia wants to become a financial super app.
This savings feature competes with Livret A, the most prevailing savings account in France. Everybody can open a Livret A in a retail bank. You get an interest rate of 0.5% net of taxes. On paper, 0.6% is better than 0.5%. But Cashbee’s savings accounts aren’t net of taxes.
If you’re a student and don’t pay any taxes, that’s a better deal. But many people pay 30% in taxes on accrued interests, which means that you end up earning 0.42% in interests net of taxes with a Cashbee account.
But it’s hard to beat the simplicity of Lydia’s solution here. For instance, you can save up to €1,000,000 on your savings account while the Livret A is limited to €22,950. In other words, if you’re already using Lydia to send, receive and spend money, you might want to check out those savings accounts.

<blockquote class="wp-embedded-content" data-secret="8PFbJnDhLd"><a href="https://www.flyingeze.com/news/lydia-raises-another-86-million-to-build-european-financial-super-app" target="_blank">Lydia raises another $86 million to build a European financial super app</a></blockquote>

French startup Lydia is better known as the dominant app for peer-to-peer payments. But the company has been adding more features, such as a debit card, account aggregation, donations, money pots and more. This week, the company is adding savings accounts thanks to a partnership with French fintech startup Cashbee. If you aren’t familiar with […]

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Lydia partners with Cashbee to add savings accounts

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If money is the ultimate commodity, how can fintechs &#8212; which sell money, move money or sell insurance against monetary loss &#8212; build products that remain differentiated and create lasting value over time?
And why are so many software companies — which already boast highly differentiated offerings and serve huge markets— moving to offer financial services embedded within their products?
A new and attractive hybrid category of company is emerging at the intersection of software and financial services, creating buzz in the investment and entrepreneurial communities, as we discussed at our “<a href="https://www.battery.com/newsevents/fintech-the-endgame/" target="_blank">Fintech: The Endgame</a>” virtual conference and accompanying report this week.
These specialized companies — in some cases, software companies that also process payments and hold funds on behalf of their customers, and in others, financial-first companies that integrate workflow and features more reminiscent of software companies &#8212; combine some of the best attributes of both categories.
<img aria-describedby="caption-attachment-2164479" loading="lazy" class="breakout size-full wp-image-2164479" src="https://techcrunch.com/wp-content/uploads/2021/06/fintech-image-1.png" alt="" width="1024" srcset="https://techcrunch.com/wp-content/uploads/2021/06/fintech-image-1.png 1425w, https://techcrunch.com/wp-content/uploads/2021/06/fintech-image-1.png?resize=150,69 150w, https://techcrunch.com/wp-content/uploads/2021/06/fintech-image-1.png?resize=300,138 300w, https://techcrunch.com/wp-content/uploads/2021/06/fintech-image-1.png?resize=768,352 768w, https://techcrunch.com/wp-content/uploads/2021/06/fintech-image-1.png?resize=680,312 680w, https://techcrunch.com/wp-content/uploads/2021/06/fintech-image-1.png?resize=50,23 50w" sizes="(max-width: 1024px) 100vw, 1024px" />Image Credits: Battery Ventures
From software, they design for strong user engagement linked to helpful, intuitive products that drive retention over the long term. From financials, they draw on the ability to earn revenues indexed to the growth of a customer’s business.
	
		<blockquote>
			Fintech is poised to revolutionize financial services, both through reinventing existing products and driving new business models as financial services become more pervasive within other sectors.					</blockquote>
	
	
The powerful combination of these two models is rapidly driving both public and private market value as investors grant these “super” companies premium valuations &#8212; in the public sphere, nearly twice the median multiple of pure software companies, according to a Battery analysis.
The near-perfect example of this phenomenon is Shopify, the company that made its name selling software to help business owners launch and manage online stores. Despite achieving notable scale with this original SaaS product, Shopify today makes twice as much revenue from payments as it does from software by enabling those business owners to accept credit card payments and acting as its own payment processor.
The combination of a software solution indexed to e-commerce growth, combined with a profitable payments stream growing even faster than its software revenues, has investors granting Shopify a 31x multiple on its forward revenues, according to CapIQ data as of May 26.
<h2>How should we value these fintech companies, anyway?</h2>
Before even talking about how investors should value these hybrid companies, it’s worth making the point that in both private and public markets, fintechs have been notoriously hard to value, fomenting controversy and debate in the investment community.

A new and attractive hybrid category of company is emerging at the intersection of software and financial services, creating buzz in the investment and entrepreneurial communities.

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The fintech endgame: New supercompanies combine the best of software and financials

This spring, Facebook <a href="https://www.flyingeze.com/news/facebook-confirms-test-of-venmo-like-qr-codes-for-person-to-person-payments-in-u-s" target="_blank">confirmed</a> it was testing Venmo-like QR codes for person-to-person payments inside its app in the U.S. Today, the company announced those codes are now launching publicly to all U.S. users, allowing anyone to send or request money through Facebook Pay &#8212; even if they&#8217;re not Facebook friends.
The QR codes work similarly to those found in other payment apps, like Venmo.
The feature can be found under the &#8220;Facebook Pay&#8221; section in Messenger&#8217;s settings, accessed by tapping on your profile icon at the top left of the screen. Here, you&#8217;ll be presented with your personalized QR code which looks much like a regular QR code except that it features your profile icon in the middle.
Underneath, you&#8217;ll be shown your personal Facebook Pay UR which is in the format of &#8220;https://m.me/pay/UserName.&#8221; This can also be copied and sent to other users when you&#8217;re requesting a payment.
Facebook notes that the codes will work between any U.S. Messenger users, and won&#8217;t require a separate payment app or any sort of contact entry or upload process to get started.
Users who want to be able to send and receive money in Messenger have to be at least 18 years old, and will have to have a <a href="https://www.facebook.com/help/1528535330720775" target="_blank">Visa or Mastercard debit card</a>, a<a href="https://www.facebook.com/help/1528535330720775" target="_blank"> PayPal account</a> or one of the <a href="https://www.facebook.com/help/1528535330720775" target="_blank">supported</a> prepaid cards or government-issued cards, in order to use the payments feature. They’ll also need to <a href="https://www.facebook.com/help/217942441564255/" target="_blank">set</a> their preferred currency to U.S. dollars in the app.
After setup is complete, you can choose which payment method you want as your default and optionally protect payments behind a PIN code of your choosing.
The QR code is also available from the Facebook Pay section of the main Facebook app, in a carousel at the top of the screen.
Facebook Pay first <a href="https://about.fb.com/news/2019/11/simplifying-payments-with-facebook-pay/" target="_blank">launched</a> in November 2019, as a way to establish a payment system that extends across the company’s apps for not just person-to-person payments, but also other features, like donations, Stars, and e-commerce, among other things. Though the QR codes take cues from Venmo and others, the service as it stands today is not necessarily a rival to payment apps because Facebook partners with PayPal as one of the supported payment methods.
However, although the payments experience is separate from Facebook’s <a href="https://about.fb.com/news/2020/05/welcome-to-novi/" target="_blank">cryptocurrency wallet</a>, <a href="https://www.novi.com/" target="_blank">Novi,</a> that&#8217;s something that could perhaps change in the future.
<img aria-describedby="caption-attachment-2164493" loading="lazy" class="size-large wp-image-2164493" src="https://techcrunch.com/wp-content/uploads/2021/06/Chat-Theme-Still-3-Up-Alt.png?w=680" alt="" width="680" srcset="https://techcrunch.com/wp-content/uploads/2021/06/Chat-Theme-Still-3-Up-Alt.png 2048w, https://techcrunch.com/wp-content/uploads/2021/06/Chat-Theme-Still-3-Up-Alt.png?resize=150,84 150w, https://techcrunch.com/wp-content/uploads/2021/06/Chat-Theme-Still-3-Up-Alt.png?resize=300,169 300w, https://techcrunch.com/wp-content/uploads/2021/06/Chat-Theme-Still-3-Up-Alt.png?resize=768,432 768w, https://techcrunch.com/wp-content/uploads/2021/06/Chat-Theme-Still-3-Up-Alt.png?resize=680,383 680w, https://techcrunch.com/wp-content/uploads/2021/06/Chat-Theme-Still-3-Up-Alt.png?resize=1536,864 1536w, https://techcrunch.com/wp-content/uploads/2021/06/Chat-Theme-Still-3-Up-Alt.png?resize=50,28 50w" sizes="(max-width: 680px) 100vw, 680px" />Image Credits: Facebook
The feature was <a href="https://messengernews.fb.com/2021/06/10/new-chat-themes-and-more-now-on-messenger/" target="_blank">introduced</a> alongside a few other Messenger updates, including a new Quick Reply bar that makes it easier to respond to a photo or video without having to return to the main chat thread. Facebook also added new chat themes including one for Olivia Rodrigo fans, another for World Oceans Day, and one that promotes the new F9 movie.
&nbsp;

This spring, Facebook confirmed it was testing Venmo-like QR codes for person-to-person payments inside its app in the U.S. Today, the company announced those codes are now launching publicly to all U.S. users, allowing anyone to send or request money through Facebook Pay — even if they’re not Facebook friends. The QR codes work similarly […]

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Online Payments

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Messenger adds Venmo-like QR codes for person-to-person payments in the U.S.

After co-founding Insomnia Consulting, Stacey Abrams and Lara O’Connor Hodgson started Nourish to address a personal problem.
“We were at a meeting, I think for one of my campaigns,” explains Abrams, the Georgia-based lawyer and politician whose voting rights work became a focal point for the country in 2020. “[O’Connor Hodgson] needed to put together a baby bottle and had to trust the waiter to take the bottle back and wash it. She said, ‘I just wish there was a Dasani for babies.’ ”
<a href="https://techcrunch.com/wp-content/uploads/2021/06/Now-logo.png" target="_blank"><img loading="lazy" class="alignright size-medium wp-image-2163871" src="https://techcrunch.com/wp-content/uploads/2021/06/Now-logo.png?w=300" alt="" width="300" srcset="https://techcrunch.com/wp-content/uploads/2021/06/Now-logo.png 446w, https://techcrunch.com/wp-content/uploads/2021/06/Now-logo.png?resize=150,40 150w, https://techcrunch.com/wp-content/uploads/2021/06/Now-logo.png?resize=300,81 300w, https://techcrunch.com/wp-content/uploads/2021/06/Now-logo.png?resize=50,13 50w" sizes="(max-width: 300px) 100vw, 300px" /></a>Ultimately, however, Nourish ran into an issue. The company was a victim of its own successes, to hear Abrams describe it &#8212; or, more accurately, a victim of a system that didn’t provide it the right tools to grow. A problem with invoicing ultimately stopped the childcare in its tracks. But it was precisely those failings that planted the seed for their next company, the simply named Now.
“We started looking for a loan. All we needed was the money to meet the order. This was during the credit crunch, and we could not get it,” Abrams tells TechCrunch. “We went from bank to credit union to factoring, and every time we got near the end, the credit model changed and we got kicked out of the program. Finally, unfortunately, we had to let our business die. We grew to death. We got too big to meet the needs and didn’t have a solution.”
Abrams and O’Connor Hodgson founded Now in 2010 to provide small businesses a quicker method for getting invoices paid. When a business submits an invoice through NowAccount, the service pays 100% of the invoice, minus a 3% merchant fee.
<a href="https://techcrunch.com/wp-content/uploads/2021/06/Now-interface.png" target="_blank"><img aria-describedby="caption-attachment-2163872" loading="lazy" class="size-full wp-image-2163872" src="https://techcrunch.com/wp-content/uploads/2021/06/Now-interface.png" alt="" width="1024" srcset="https://techcrunch.com/wp-content/uploads/2021/06/Now-interface.png 1546w, https://techcrunch.com/wp-content/uploads/2021/06/Now-interface.png?resize=150,76 150w, https://techcrunch.com/wp-content/uploads/2021/06/Now-interface.png?resize=300,153 300w, https://techcrunch.com/wp-content/uploads/2021/06/Now-interface.png?resize=768,391 768w, https://techcrunch.com/wp-content/uploads/2021/06/Now-interface.png?resize=680,347 680w, https://techcrunch.com/wp-content/uploads/2021/06/Now-interface.png?resize=1536,783 1536w, https://techcrunch.com/wp-content/uploads/2021/06/Now-interface.png?resize=50,25 50w" sizes="(max-width: 1024px) 100vw, 1024px" /></a>Image Credits: Now
“We sell bonds in the capital market, just like American Express does,” O’Connor Hodgson explains. “We have very low-cost capital that we’re able to give that small business their revenue immediately. And then we’ve built a system that allows us to manage the cost and risk of that, because we’re going to then wait 30+ days to get paid.”
Today the Georgia-based company announced that it has raised $9.5 million in Series A funding. The round, led by Virgo Investment Group and featuring Cresset Capital Partners, will be used to help scale Now’s offerings. It comes as the pandemic has put even more of a strain on invoices for many companies. O’Connor Hodgson says the average wait time for invoice payment expanded from around 50 days to between 70-80.
&#8220;We have served over 1,000 small businesses and we have processed over $700 million in transactions,&#8221; says O’Connor Hodgson. &#8220;So that’s $700 million of their capital that they have received sooner.&#8221;
Thus far, Now&#8217;s growth has largely been a product of word of mouth. The new influx of funding will go, in part, to market and advertising to get the product in front of more small businesses.
“When you&#8217;re a small business and someone tells you we have a solution to a problem that no one has been willing to solve, we sound like magic,” says Abrams. “And what we want people to understand and a big part of our scaling challenge has been, you have to experience it to believe it. And getting companies to understand that this actually does work the way we say that it does actually benefit you in the way we imagine, and that it works.”

After co-founding Insomnia Consulting, Stacey Abrams and Lara O’Connor Hodgson started Nourish to address a personal problem. “We were at a meeting, I think for one of my campaigns,” explains Abrams, the Georgia-based lawyer and politician whose voting rights work became a focal point for the country in 2020. “[O’Connor Hodgson] needed to put together […]

Funding

Recent Funding

Invoicing

Stacey Abrams

Virgo Investment Group

Stacey Abrams co-founded fintech company Now raises $9.5M

<a href="http://ourbranch.com/?utm_source=press&amp;utm_campaign=seriesb" target="_blank">Branch Insurance</a>, a startup offering bundled home and auto insurance, has raised $50 million in a Series B funding round led by Anthemis Group.
Acrew, Cherry Creek Holdings and existing backers Greycroft, HSCM Bermuda, American Family Ventures, SignalFire, SCOR P&amp;C Ventures, Foundation Capital and Tower IV also participated in the round. With this latest financing, Columbus, Ohio-based Branch has raised $82.5 million in total funding since its 2017 inception.
With so many players in the insurtech space, it can get tough distinguishing the various offerings. Branch claims that it is unique in that it is able to provide customers with “an instant insurance offer” for bundled home and auto insurance “within seconds” using just a few pieces of information.
Co-founder and CEO Steve Lekas began his career at Allstate, where he went on to hold roles in underwriting, technology and product management. He then went on to build Esurance’s first online home insurance business.
But in the back of his mind, Lekas yearned to figure out a way to make insurance more accessible for more people. And so he teamed up with Joe Emison, and Branch was born.
“The industry is structurally flawed and it harms consumers. Complicated policies, rising costs and marketing warfare all contribute to a vicious cycle that results in overpriced insurance,” said Lekas. “We are a full-stack insurance company transforming the way people think about their home and car insurance.”
Branch, he claims, is the only insurance company that he is aware of that can bind insurance through an API, and the only one that can bundle auto and home insurance in a single transaction.
Another way Branch is unique, according to Lekas, is that it can be embedded into the buying experience. In other words, the company has partnered with companies such as Rocket Mortgage and ADT to integrate insurance at the point of sale in their products. For example, if a person is closing on a home, they have the option of purchasing Branch insurance at the same time.
<img aria-describedby="caption-attachment-2163388" loading="lazy" class="wp-image-2163388" src="https://techcrunch.com/wp-content/uploads/2021/06/SteveLekasHeadshot.jpg?w=300" alt="" width="358" srcset="https://techcrunch.com/wp-content/uploads/2021/06/SteveLekasHeadshot.jpg 4071w, https://techcrunch.com/wp-content/uploads/2021/06/SteveLekasHeadshot.jpg?resize=150,150 150w, https://techcrunch.com/wp-content/uploads/2021/06/SteveLekasHeadshot.jpg?resize=300,300 300w, https://techcrunch.com/wp-content/uploads/2021/06/SteveLekasHeadshot.jpg?resize=768,768 768w, https://techcrunch.com/wp-content/uploads/2021/06/SteveLekasHeadshot.jpg?resize=680,680 680w, https://techcrunch.com/wp-content/uploads/2021/06/SteveLekasHeadshot.jpg?resize=1536,1536 1536w, https://techcrunch.com/wp-content/uploads/2021/06/SteveLekasHeadshot.jpg?resize=2048,2048 2048w, https://techcrunch.com/wp-content/uploads/2021/06/SteveLekasHeadshot.jpg?resize=32,32 32w, https://techcrunch.com/wp-content/uploads/2021/06/SteveLekasHeadshot.jpg?resize=50,50 50w, https://techcrunch.com/wp-content/uploads/2021/06/SteveLekasHeadshot.jpg?resize=64,64 64w, https://techcrunch.com/wp-content/uploads/2021/06/SteveLekasHeadshot.jpg?resize=96,96 96w, https://techcrunch.com/wp-content/uploads/2021/06/SteveLekasHeadshot.jpg?resize=128,128 128w" sizes="(max-width: 358px) 100vw, 358px" />Branch co-founder and CEO Steve Lekas. Photo: Robb McCormick Photography
“Every home or car policy starts with another transaction,” Lekas said. “Insurance is a product that exists only because of the other transaction. It’s never before been possible to embed in that primary purchase before.”
This distribution model means that Branch shells out less to acquire customers and thus, it claims, is able to offer premiums for a lower price than competitors.
“In just two clicks, a consumer can have home and car insurance or just home and we’ll cancel the old insurance on their closing date, and transmit all the data to their existing mortgage,” Lekas said.
Branch also offers its insurance direct-to-consumer and through agencies.
The company plans to use its new capital in part to accelerate its rollout across the U.S. so that it can sign more such partnerships where it can embed its offering. Currently, Branch has more than 30 partnerships of varying sizes, and is “adding more every week” as it launches in more states.
“It’s really hard to move quickly,” Lekas said. “The system is built to make you move slowly. Every state regulator has to approve individually and independently with their own rules.”
Lekas predicts Branch will be available in more than 80% of the U.S. before the year’s out.
Branch has seen increased momentum since its $24 million Series A in July 2020.
Specifically, the startup says it has achieved a 435% growth in its partner channel, 660% growth in active policies and a 734% increase in active premium less than one year after its last raise.
Anthemis Group Partner Ruth Foxe Blader notes that Branch marks her firm’s first investment from its new growth fund.
Blader says she has invested in insurance innovation over the past decade, and is particularly attracted to insurtech businesses that represent three things: significant technology and data science innovation; significant product innovation and significant cultural innovation.
“Branch easily ticks those boxes,” Blader told TechCrunch. “Branch&#8217;s products are both embedded and bundled, making them less expensive and more convenient to purchase, and less likely to leave customers with critical protection gaps.”
The startup, she added, effectively combines data science and technology to create “unique, automatic product bundles.”
With what it describes as a “built-for-savings” structure, Branch said it has created connected home discounts as well as programs that reward members for making referrals and practicing safe driving behaviors, for example.
Branch also has formed a nonprofit, <a href="https://www.safetynest.org/" target="_blank">SafetyNest</a>, to help those who are un- or underinsured.

<blockquote class="wp-embedded-content" data-secret="NvpbNtxpy4"><a href="https://www.flyingeze.com/news/insurtech-startups-are-leveraging-rapid-growth-to-raise-big-money" target="_blank">Insurtech startups are leveraging rapid growth to raise big money</a></blockquote>

Branch Insurance, a startup offering bundled home and auto insurance, has raised $50 million in a Series B funding round led by Anthemis Group. Acrew, Cherry Creek Holdings and existing backers Greycroft, HSCM Bermuda, American Family Ventures, SignalFire, SCOR P&C Ventures, Foundation Capital and Tower IV also participated in the round. With this latest financing, […]

Fundings & Exits

Allstate

American Family Ventures

Anthemis Group

Auto Insurance

Branch

Car Insurance

Columbus

Foundation Capital

Insurtech

Branch raises $50M to offer bundled auto & home insurance via an API

Neobrokers &#8212; startups that are disrupting the investment industry by providing a platform for a wider range of consumers to partake in the stock market by offering them more incremental investment options and modern and easy mobile-based interfaces to manage their money &#8212; continue to see a huge amount of interest, and today comes the latest development in that story.
<a href="https://uk.scalable.capital/" target="_blank" rel="noopener" data-saferedirecturl="https://www.google.com/url?q=https://uk.scalable.capital/&amp;source=gmail&amp;ust=1623300713883000&amp;usg=AFQjCNE2tHF2ywqHE2sm1ekwO3WNP8qNZQ" target="_blank">Scalable Capital</a>, a Munich/Berlin startup that provides tools to monitor and manage portfolios for those investing in shares, manage trades and <a href="https://www.investopedia.com/terms/e/etf.asp" target="_blank" rel="noopener noreferrer" target="_blank">exchange traded funds</a> for a flat fee of €2.99 per month, has raised over $180 million (around €150 million) to expand its business. The company confirmed to us that the investment, a Series E being led by China&#8217;s Tencent, is being done at a $1.4 billion valuation.
This is a huge jump &#8212; a lot of scaling, as it were &#8212; for Scalable Capital. It was only in July 2020, less than a year ago, that the startup raised a <a href="https://techcrunch.com/2020/07/22/scalable-capital-raises-58m-at-a-460m-valuation-for-its-robo-investment-platform/" target="_blank" rel="noopener" target="_blank">Series D of $58 million</a> at a $460 million valuation.
Previous investors, including BlackRock, HV Holtzbrinck Ventures and Tengelmann Ventures, also participated in this round. The company, founded in 2014 but commercially launched in 2016, has now raised more than $320 million in equity funding.
Part of the reason for the rapid fundraising is to strike while the iron is hot, and to give the startup some more fuel to grow at a time when other neobrokers are also seeing a lot of activity.
Scalable Capital itself now has 250,000 customers across Austria, Germany and the UK, more than three times the 80,000 it had back in July. At the same time, assets under management have ballooned to $5 billion (versus $2 billion in that last round). In another interesting turn, Scalable is also building out a business as a neobroker partner to many established banks, too, with the list of high-street names including ING, the British Barclays Bank, Siemens Private Finance, the digital subsidiary of the Santander Group Openbank, Oskar GmbH, and Targobank.
But while Scalable will be using some of the funding to continue expanding on the continent, it also seems that its UK business is no longer accepting new customers, We are asking whether that is temporary and Brexit-related, or another reason and will update when we have an answer.
Altogether, Scalable said that some 1,500 Exchange Traded Funds (ETFs) available on the platform (these are the most popular vehicle: more than half of the assets on the platform invested in these). It also provides access to invest across some 4,000 different shares and 2,000 funds. All of these are set to grow, along with potentially launching new products, too.
“We see huge demand to invest money in the capital markets instead of leaving it in bank accounts. This comes against a backdrop of record-low interest rates, growing inflation and a widening pension gap”, says Florian Prucker, co-CEO and co-founder of Scalable Capital, in a statement. “Our clients can access fully managed globally diversified ETF portfolios and – in the same app – self directed trading in shares, ETFs, crypto currencies and funds. We also provide a market-leading offering of ETF, stocks and crypto monthly savings plans. We are planning to launch derivatives trading next. We will continue on our mission to make everyone an investor”.
In the meantime, the company is also bulking up at a time when others in the same space are doubling down, too. Last month, Trade Republic &#8212; another neobroker from Germany &#8212; announced a<a href="https://www.flyingeze.com/news/berlins-trade-republic-nabs-900m-led-by-sequoia-at-a-5b-valuation-to-take-its-neo-broker-app-across-europe" target="_blank" rel="noopener" target="_blank"> $900 million investment at a $5 billion valuation</a> led by Sequoia. Other big European players that have also recently raised big expansion rounds include Amsterdam&#8217;s Bux (<a href="https://www.flyingeze.com/news/bux-a-european-robinhood-raises-80m-to-expand-its-neo-broker-platform" target="_blank" rel="noopener" target="_blank">$80 million in April</a>) and Vienna-based Bitpanda (<a href="https://www.flyingeze.com/news/neobroker-bitpanda-raises-170m-at-a-1-2b-valuation-to-take-its-trading-platform-beyond-crypto" target="_blank" rel="noopener" target="_blank">$170 million in March</a>).
Interestingly, Tencent also led that last round for Bux, a part of its bigger investment efforts both in fintech and in the region. Other big bets in Fintech have included <a href="https://www.flyingeze.com/news/greeces-viva-wallet-raises-80m-for-its-neo-bank-targeting-small-business-merchants" target="_blank" rel="noopener" target="_blank">Viva Wallet in Greece</a>; Nubank in Brazil, which yesterday <a href="https://www.flyingeze.com/news/fintech-all-star-nubank-raises-a-750m-mega-round" target="_blank" rel="noopener" target="_blank">also announced a big round</a>; N26; and Futu, a Nasdaq-listed Chinese neo-broker. It also has built out an extensive gaming empire with a string of major acquisitions, including Supercell.
“Tencent complements our existing long-term partners who already represent an international investor base. Our recent funding is a major step forward on our way to becoming the leading retail investment platform in Europe. The strong acceleration of our growth further validates our mission to empower investors”, says Erik Podzuweit, co-CEO and co-founder of Scalable Capital, in a statement. “Anyone thinking of investing money should think of Scalable Capital. Whether you want to invest yourself via our broker or want our wealth management solutions to do it for you.”
The fintech interest is particularly notable also given that Tencent is also the parent of China&#8217;s messaging behemoth WeChat, which has also made huge inroads among consumers around a range of financial services.
“Demand for accessible solutions of personal investing is increasing in European markets, particularly among millennials. Scalable Capital excels in offering its customers a convenient and cost-efficient investing experience. We are delighted to be an investor and participate in Scalable Capital’s growth”, says Danying Ma, Managing Director of Tencent Investment, in a statement.

Neobrokers — startups that are disrupting the investment industry by providing a platform for a wider range of consumers to partake in the stock market by offering them more incremental investment options and modern and easy mobile-based interfaces to manage their money — continue to see a huge amount of interest, and today comes the […]

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Neobroker

Scalable Capital

European neobroker Scalable Capital raises $180M+ at a $1.4B valuation

The buy now, pay later frenzy isn’t going anywhere as more consumers seek alternatives to credit cards to fund purchases.
And those purchases aren’t exclusive to luxuries such as Pelotons (ahem, Affirm) or jewelry someone might be treating themselves to online. A new fintech company is out to help consumers finance big-ticket items that are considered more &#8220;must have&#8221; than &#8220;nice to have.&#8221; And it’s just raised $14 million in Series A funding to help it advance on that goal.
Neal Desai (former CFO of Octane Lending) and James Schuler (who participated in Y Combinator’s accelerator program as a high schooler) founded New York City-based <a href="https://kafene.com" target="_blank">Kafene</a> in July 2019. The pair’s goal is to promote financial inclusion by meeting the needs of what it describes as the “consumers that are left behind by traditional lenders.”
More specifically, Kafene is focused on helping consumers with credit scores below 650 purchase retail items such as furniture, appliances and electronics with its buy now, pay later (BNPL) model. Consider it an &#8220;Affirm for the subprime,&#8221; says Desai.
Global Founders Capital and Third Prime Ventures co-led the round, which also included participation from Valar, Company.co, Hermann Capital, Gaingels, Republic Labs, Uncorrelated Ventures and FJ labs.
“Historically, if you could access credit, you could go to the bank or use a credit card,” Third Prime’s Wes Barton told TechCrunch. “But if you had some unexpected expense, and had to miss a payment with the bank, there would be repercussions and you could fall into a debt trap.”
Kafene’s &#8220;flexible ownership&#8221; model is designed to not let that happen to a consumer. If for some reason, someone has to forfeit on a payment, Kafene comes to pick up the item and the customer is no longer under obligation to pay for it moving forward.
The way it works is that Kafene buys the product from a merchant on a consumers’ behalf and rents it back to them over 12 months. If they make all payments, they own the item. If they make them earlier, they get a “significant” discount, and if they can’t, Kafene reclaims the item and takes the loan loss.
<img aria-describedby="caption-attachment-2163014" loading="lazy" class="vertical wp-image-2163014" src="https://techcrunch.com/wp-content/uploads/2021/06/Kafene.jpg?w=180" alt="" width="221" srcset="https://techcrunch.com/wp-content/uploads/2021/06/Kafene.jpg 1158w, https://techcrunch.com/wp-content/uploads/2021/06/Kafene.jpg?resize=90,150 90w, https://techcrunch.com/wp-content/uploads/2021/06/Kafene.jpg?resize=180,300 180w, https://techcrunch.com/wp-content/uploads/2021/06/Kafene.jpg?resize=768,1283 768w, https://techcrunch.com/wp-content/uploads/2021/06/Kafene.jpg?resize=407,680 407w, https://techcrunch.com/wp-content/uploads/2021/06/Kafene.jpg?resize=919,1536 919w, https://techcrunch.com/wp-content/uploads/2021/06/Kafene.jpg?resize=30,50 30w" sizes="(max-width: 221px) 100vw, 221px" />Image Credits: Kafene
It’s a modern take on Rent-A-Center, which charges more money for inferior products, Desai believes.
“This is also a superior product to credit cards, and the size of that market is massive,” Barton said. “We want to take a huge chunk of credit card business in time, and give consumers the flexibility to quit at any point in time, and fly free, if you will.”
Such flexibility, Kafene claims, helps promote financial inclusion by giving a wider range of consumers options to alternative forms of credit at the point of sale.
It also helps people boost their credit scores, according to Desai, because if they buy out of the loan earlier than the 12-month term, their credit score goes up because Kafene reports them as a positive payer.
“In any situation where they don’t steal the item, their credit score improves,” he said. “Even if they end up returning it because they can’t afford it. In the long run, they can have a better credit score to qualify for a traditional loan product.”
Kafene rolled out a beta of its financing product in December of 2019 and then had to pause in March due to the COVID-19 pandemic. The company essentially “hibernated” from March to June 2020 and re-launched out of beta last July.
By October, Kafene stopped all enrollment with merchants because it had more demand that it could handle &#8212; largely fueled by more people being financially strained due to the COVID-19 pandemic. In March 2021, the company was handling about $2 million a month in merchandise volume.
With its new capital, Kafene plans to significantly scale its existing lease-to-own financing business nationally, as well as to launch a direct-to-consumer virtual lease card.

<blockquote class="wp-embedded-content" data-secret="DVCfFwV504"><a href="https://www.flyingeze.com/news/as-buy-now-pay-later-startups-keep-raising-capital-a-dive-into-klarna-afterpay-and-affirms-earnings" target="_blank">As buy-now-pay-later startups keep raising capital, a dive into Klarna, Afterpay and Affirm&#8217;s earnings</a></blockquote>

The buy now, pay later frenzy isn’t going anywhere as more consumers seek alternatives to credit cards to fund purchases. And those purchases aren’t exclusive to luxuries such as Pelotons (ahem, Affirm) or jewelry someone might be treating themselves to online. A new fintech company is out to help consumers finance big-ticket items that are […]

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Bnpl

Buy Now

Credit

Credit Card

Credit Score

Debt

Economy

Electronics

Kafene raises $14M to offer buy now, pay later to the subprime consumer

You&#8217;d expect an expense management company to have a large sales department and advertise through all kinds of channels to maximize customer acquisition. But like we’ve seen over and over through the course of <a href="https://www.flyingeze.com/news/expensify-ec1" target="_blank">this EC-1</a>, Expensify just doesn’t do what you think it should.
Keeping in mind this company’s propensity to just stick to its guts, it’s not much of a surprise that it got to <a href="https://www.flyingeze.com/news/expensify-ec1-culture" target="_blank">more than $100M in annual recurring revenue</a> and millions of users with a staff of 130, some contractors, and an almost non-existent sales team.
If you&#8217;re wondering how its possible to grow to such a level without an established sales team, the short answer is: Word of mouth. To an extent, Expensify can do this due to the space it’s in, as expense reporting is such a thankless, almost mind numbingly boring task that anyone who found a good solution is bound to recommend it to their colleagues and friends.
But it’s more interesting how Expensify grows bottom-up within SMBs, its core customer base. By providing an easy and meaningful experience via the product itself, the company has come to a point where it only takes one or two users who love the service to turn their company into customers.
This approach flips the traditional sales model on its head and is now known as product-led growth, but Expensify did it long before it was an accepted business model. Though that was harder than it sounds, it also put the company in a uniquely privileged position, which it is fully intent on leveraging.
<h2>Starting the flywheel</h2>
There are many ways to get such a business model started, but as usual, Expensify threw caution and all advice out the window and banked on turning its users into evangelizers for its product.

You’d expect an expense management company to have a large sales department and advertise heavily. But like we’ve seen over and over, Expensify just doesn’t do what you think it should.

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How bottom-up sales helped Expensify blaze the path for SaaS

In 2013, Colombian businessman David Velez decided to reinvent the Brazilian banking system. He didn’t speak Portuguese, nor was he an engineer or a banker, but he did have the conviction that the system was broken and that he could fix it. And as a former Sequoia VC, he also had access to capital.
His gut instinct and market analysis were right. Today, <a href="https://nubank.com.br/" target="_blank">Nubank</a> announced a $750 million extension to its Series G (which rang in at $400 million this past January), bringing the round to a total of $1.15 billion and their valuation to $30 billion &#8212; $5 billion more than <a href="https://www.flyingeze.com/news/fintech-darling-nubank-raises-blockbuster-400m-series-g-at-25b-valuation" target="_blank">when we covered them in January.</a>
The extension funding was led by Berkshire Hathaway, which put in $500 million, and a number of other investors.
Velez and his team decided now was a good time to raise again, because, “We saw a great opportunity in terms of growth rate and we’re very tiny when compared to the incumbents,” he told TechCrunch.”
Nubank is the biggest digital bank in the world by number of customers: 40 million. The company started as a tech company in Brazil that offered only a fee-free credit card with a line of credit of R$50 (about USD$10). 

<blockquote class="wp-embedded-content" data-secret="lX85R2M1dP"><a href="https://www.flyingeze.com/news/fintech-darling-nubank-raises-blockbuster-400m-series-g-at-25b-valuation" target="_blank">Fintech darling Nubank raises blockbuster $400M Series G at $25B valuation</a></blockquote>

It now offers a variety of financial products, including a digital bank account, a debit card, insurance, P2P payment via Pix (the Brazilian equivalent of Zelle), loans, rewards, life insurance and an account and credit card for small business owners. 
Nubank serves unbanked or underserviced citizens in Brazil &#8212; about 30% of the population &#8212; and this approach can be extremely profitable because there are many more clients available.
The banking system in Brazil is one of the few bureaucracies in the country that is actually quite skillful, but the customer service remains unbearable, and banks charge exorbitant fees for any little transaction. 
Traditionally, the banking industry has been dominated by five major traditional banks: Itaú Unibanco, Banco do Brasil, Bradesco, Santander and Caixa Economica Federal. 
While Brazil remains Nubank’s primary market, the company also offers services in Colombia and Mexico (services launched in Mexico in 2018). The company still only offers the credit card in both countries.
“The momentum we’re seeing in Mexico is terrific. Our Mexican credit card net promoter score (NPS) is 93, which is the highest we’ve had in Nubank history. In Brazil the highest we’ve had was 88,” Velez said.
The company has been on a hiring spree in the last few months, and brought on two heavyweight executives. Matt Swann replaced Ed Wible (the original CTO and co-founder). Wible continues to be an important player in the company, but more in a software developer capacity. Swann previously served as CTO at Bookings.com and StubHub, and as CIO of the Global Consumer Bank at Citi, so he brings years of experience of scaling tech businesses, which is what Nubank is focused on now, though Velez wouldn’t confirm which countries are next.
The other major hire, Arturo Nunez, fills the new role of chief marketing officer. Nunez was head of marketing for Apple Latin America, amongst other roles with Nike and the NBA. 
It may sound a little odd for a tech company not to have had a head of marketing, but Nubank takes pride in having a $0 cost of acquisition (CAC). Instead of spending money on marketing, they spend it on customer service and then rely on word of mouth to get the word out.
Since we last spoke with Velez in January regarding the $400 million Series G, the company went from having 34 million customers to now having 40 million in a span of roughly 6 months. The funds will be used to grow the business, including hiring more people.
“We’ve seen the entire market go digital, especially people who never thought they would,” Velez said. “There is really now an avalanche of all backgrounds [of people] who are getting into digital banking.”

<blockquote class="wp-embedded-content" data-secret="DSxGuAaPaG"><a href="https://techcrunch.com/2020/10/02/which-neobanks-will-rise-or-fall/" target="_blank">Which neobanks will rise or fall?</a></blockquote>

In 2013, Colombian businessman David Velez decided to reinvent the Brazilian banking system. He didn’t speak Portuguese, nor was he an engineer or a banker, but he did have the conviction that the system was broken and that he could fix it. And as a former Sequoia VC, he also had access to capital. His […]

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Brazil

Colombia

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David Velez

Digital Banking

Engineer

Fintech all-star Nubank raises a $750M mega round

Grupo Bursátil Mexicano (GBM) is a 35-year-old investment platform in the Mexican stock market. In its first three decades of life, GBM was focused on providing investment services to high net worth individuals and local and global institutions.
Over the past decade, the Mexico City-based brokerage has ramped up its digital efforts, and, in the past five years, has evolved its business model to offer services to all Mexicans with the same products and services it offers large estates.
Today, GBM is announcing it has received an investment of “up to” $150 million from SoftBank via the Japanese conglomerate’s <a href="https://techcrunch.com/2019/03/07/softbank-launches-the-innovation-fund-committing-2b-to-invest-in-latin-america/" target="_blank">Latin America Fund</a> at a valuation of “over $1 billion.” The investment is being made through one of GBM’s subsidiaries and is not contingent on anything, according to the company.
Co-CEO Pedro de Garay Montero told TechCrunch that GBM has built an app, GBM+, that organizes and invests clients’ money through three different tools: Wealth Management, Trading and Smart Cash.
Last year was a “historic” one for the company, he said, and GBM went from having 38,000 investment accounts in January 2020 to more than 650,000 by year’s end. In the first quarter of 2021, that number had grown to over 1 million &#8212; representing more than 30x growth from the beginning of 2020.
For some context, according to the National Banking and Securities Commission (CNBV), there were only 298,000 brokerage accounts in Mexico at the end of 2019, and that number climbed to 940,000 by the end of 2020 &#8212; with GBM holding a large share of them.
Most of GBM’s clients are retail clients, but the company also caters to “most of the largest investment managers worldwide,” as well as global companies such as Netflix, Google and BlackRock. Specifically, it services 40% of the largest public corporations in Mexico and a large base of ultra high net worth individuals.
The company is planning to use its new capital in part to invest “heavily” in customer acquisition.
Montero said that half of its team of 450 are tech professionals, and that the company plans to also continue hiring as it focuses on growth in its B2C and B2B offerings and expanding into new verticals.
“We are improving our already robust financial education offering,” he added, “so that Mexicans can take control of their finances. GBM’s mission is to transform Mexico into a country of investors.”
Because Mexico is such a huge market &#8212; with a population of over 120 million and a GDP of more than $1 trillion &#8212; GBM is laser-focused on growing its presence in the country.
“The financial services industry is dominated by big banks and is inefficient, expensive and provides a poor client experience. This has resulted in less than 1% of individuals having an investment account,&#8221; Montero told TechCrunch. “We will be targeting clients through our own platform and internal advisors, as well as growing our base of external advisors to reach as many people as possible with the best investment products and user experience.”
When it comes to institutional clients, he believes there is “enormous potential” in serving both the large corporations and the SMEs “who have received limited services from banks.”
Juan Franck, investment lead for SoftBank Latin America Fund in Mexico, believes the retail investment space in Mexico is at an inflection point.
“The investing culture in Mexico has historically been low compared to the rest of the world, even when specifically compared to other countries in Latin America, like Brazil,” he added. “However, the landscape is quickly changing as, through technology, Mexicans are being provided more education around investing and more investment alternatives.”
In the midst of this shift, SoftBank was impressed by GBM&#8217;s “clear vision and playbook,” Franck said.
So, despite being a decades-old company, SoftBank sees big potential in the strength of the digital platform that GBM has built out.
“GBM is the leading broker in Mexico in terms of trading activity and broker accounts,” he said. “The company combines decades of industry know-how with an entrepreneurial drive to revolutionize the wealth management space in the country.”

<blockquote class="wp-embedded-content" data-secret="7Thm1rCAtR"><a href="https://www.flyingeze.com/news/tech-in-mexico-a-confluence-of-latin-america-the-us-and-asia" target="_blank">Tech in Mexico: A confluence of Latin America, the US and Asia</a></blockquote>

Grupo Bursátil Mexicano (GBM) is a 35-year-old investment platform in the Mexican stock market. In its first three decades of life, GBM was focused on providing investment services to high net worth individuals and local and global institutions. Over the past decade, the Mexico City-based brokerage has ramped up its digital efforts, and, in the […]

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SoftBank pours up to $150M into GBM, a Mexico City-based investment platform

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