While Covid-19 continues to haunt us, the FinTech industry continues to rake in millions of dollars. Neobanks and cybersecurity companies were the top-scoring sectors to raise investment among the 42 rounds that FinTech Global reported on last week.
While FinTech businesses in the payments, buy now pay later and RegTech industries continued to reap successes despite the fallout of the coronavirus, the two sectors that enjoyed the biggest wins last week were the cybersecurity and the digital banking industries.
Let’s start with the cybersecurity sector. In the past seven days, FinTech Global reported how Forter bagged $300m along with startups such as Salt Security, Material Security, Tessian, Uptyks, Wiz, SAM Seamless and DataDome topping up their accounts with new funding.
It should hardly come as a surprise that the cybersecurity sector has seemingly fared well despite the coronavirus. In fact, some of the growth of the sector may even be attributed to the pandemic. Businesses’ defences against cybercriminals were compromised as people started to work remotely.
With the Covid-19-induced lockdown, professionals found themselves lacking the digital defence infrastructure their employers had in their offices. That included both the technology put in place to protect them as well as the input they could get from colleagues about any weird emails or other anomalies.
As a result, bad actors have taken advantage of the situation. The number of hack attacks, phishing schemes and other financial crimes skyrocketed in 2020 with fileless malware attacks increasing by nearly 900% and crypto miner attack rates soaring by 25%, according to a report from WatchGuard Technologies.
Moreover, despite the costs of security breaches going up since the coronavirus outbreak, corporates faced a need to upgrade their cybersecurity and IT professionals upped their investment into their digital defences.
Both total funding and deal activity set new records last year driven by an increased share of capital coming from deals over $75m which reached 64.5% in 2020 totalling investments of $6.2bn – up from $4.7bn in 2018, according to FinTech Global’s research.
Furthermore, a report from Grand View Research expects that the global data protection as a service market is expected to grow considerably in the next seven years, reaching a whopping $103.8bn in 2027, growing at a compound annual growth rate of 31.3%.
A similar picture also applies to the WealthTech industry which has continued to enjoy a steady stream of investment over the past year. Last week, FinTech Global reported how neobank Zeta forayed into the unicorn club with a Softbank-led $250m round. This was one of the largest single investments in a banking tech startup globally, the startup claimed.
It’s important to note that Zeta became the fourteenth unicorn spawned in India in 2021 up from 11 unicorns produced in all of 2020. In specific, the FinTech sector in India already saw startups such as CRED, Groww, Digit Insurance, Five Star Business Finance and Chargebee enter the billion-dollar club this year. India seemingly is a hotbed as more FinTechs mushroom across the country. Increased adoption of the internet and improved digital infrastructure are driving the sector in India. In fact, the FinTech market in India valued at INR 1920.16bn ($2.63bn) in 2019 is expected to reach INR 6,207.41bn (8.53bn) by 2025, expanding at a compound annual growth rate of 22.7%, according to ResearchAndMarkets.com.
Zeta was hardly the only challenger bank to score investment. Startups like SaveIN and Zoe Financial also raised additional funding to fuel their growth. The stories above highlights how challenger banks keep driving the growth of the WealthTech space.
It comes as no surprise that the global WealthTech funding hit a record in Q1 this year with $6.6bn added to its coffers driven by large deals over $75m which made up 81.8% of the total capital raised, according to FinTech Global’s research. The top ten WealthTech deals in the first three months of the year collectively raised just over $5.1bn, making up 77.2% of the overall investment in the sector during the quarter. The high concentration of capital is mainly due to Robinhood’s mammoth $3.4bn fundraise in February.
The sector has continued to attract investors despite the huge losses suffered by leading challenger banks such as Monzo, Revolut and Starling this year.
All in all, it seems as if the WealthTech industry has continued to enjoy growth despite the pandemic.
Another sector that is on a winning streak this year is the InsurTech industry. Last week FinTech Global reported on startups including MileAuto, Obie, Parametrix and Corvus Insurance adding millions to their accounts in a bid to digitalise the sector further.
Now, let’s look at the different rounds raised last week in more detail.
Forter banks $300m at a $3bn valuation
E-commerce fraud prevention company Forter raised $300m in Series F funding led by Tiger Global Management, with participation from Third Point Ventures, and Adage Capital Management.
Existing investors also participated including Bessemer Venture Partners, Sequoia Capital, March Capital, NewView Capital, Salesforce Ventures, and Scale Venture Partners.
The funding comes six months after the company completed its $125m Series E round, almost tripling the valuation to $3bn making Forter the most valuable privately held company in the fraud prevention industry.
Zeta earns the horn with a $250m round
Bhavin Turakhia founded challenger bank Zeta became a unicorn following a $250m investment led by SoftBank Group Corp’s Vision Fund 2. The Series C capital infusion valued the nearly seven-year-old startup at $1.45bn.
Zeta will use the capital raised in this round to grow its business in the US, Europe and India, apart from scaling its operations team and platform. Zeta offers credit, debit and prepaid card processing, core banking and mobile app solutions to banks and FinTechs. Its customers include Sodexo, HDFC Bank, Kotak Mahindra Bank and Yes Bank among others.
SecFi scores $150m
Pre-wealth management platform Secfi secured a second investment facility from Serengeti Asset Management for $150m. The development comes after Serengeti’s first $550m facility in January 2020.
With the new funds, Secfi will be able to educate and assist more employees in optimizing the value of their stock options before exit. The new funding will also go toward exercising stock options and continuing to develop the core financing product.
SpotOn banks $125m, becomes unicorn
Software and payments companies with solutions for restaurants and retail businesses SponOn raised $125m in Series D funding led by Andreessen Horowitz (a16z), increasing its valuation to $1.875bn.
SpotOn offers an integrated platform while saving thousands of dollars in payments and software fees to multiple vendors. About 8,000 businesses have already made the switch to SpotOn in 2021 and the company expects that number to triple by the end of the year.
Paysend pulls in $125m, becomes soonicorn
Paysend closed a $125m Series B funding round led by One Peak, with participation from Infravia Growth Capital, Hermes GPE Innovation Fund, and existing investors including Plug and Play.
The card-to-card and global payments platform will use the funding to grow its presence internationally and advance the innovation of new products and services. The startup is focusing its efforts on tapping the $133tn cross-border payments market.
Paysend was founded in London in April 2017 by Abdul Abdulkerimov and boasts of more than 3.7 million consumers, 17,000 SMEs and 110 receiving countries.
Wiz inks $120m in Salesforce-led round
Cloud security startup Wiz has raised more than $120m in a funding round led by customer relationship management giant Salesforce.
The funding would be the Tel Aviv, Israel-based Wiz’s third financing round in the past six months, coming just two months after the firm notched a $1.7bn valuation following a $130m Series B round led by private equity investor Advent International.
Wiz was founded in January 2020 and emerged from stealth in December 2020 with an astronomical $100m in Series A funding from Index Ventures, Sequoia, Insight Partners and Cyberstarts. Wiz’s architecture facilitates scanning of the entire cloud environment across all compute types and cloud services for vulnerabilities, configuration, network and security issues.
Agicap accrues $100m
France-based company Agicap banked $100m in a funding round led by Greenoaks, pulling its valuation to over $500m. The funding round also saw participation from existing investors Partech and BlackFin Capital Partners.
The company raised $18m in a Series A funding round the previous year. Its business model revolves around a service it is developing that will allow businesses to track their cash flow in real-time, generate reports, and receive forecasts. Over the last 12 months, the company’s workforce has increased from 30 to 200 individuals. It now intends to hire 1,000 people in the coming year.
Immuta inks $90m
Immuta secured $90m in Series D funding which included new investors Greenspring Associates, March Capital, NGP Capital and Wipro Ventures, as well as participation from existing investors.
Immuta will use the investment to further its market leadership position and capture the rising demand for centralised, scalable access control across cloud data sets that are increasingly diverse and distributed on multiple computing platforms. The new investment comes less than a year after Immuta’s Series C investment and brings the total capital raised to $169m.
Wayflyer wins $76m in funding
Ireland-based provider of eCommerce growth platform Wayflyer raised $76m in Series A funding.
The round was led by Left Lane Capital, with participation from DST Global, QED Investors, Speedinvest and Zinal Growth, the family office of Guillaume Pousaz, founder of Checkout.com.
Wayflyer has expanded its debt facilities by an additional $100m and recently signed a major partnership with Adobe Commerce in a move that will further increase its capital deployment capabilities. Wayflyer provides a revenue-based financing and growth platform to eCommerce merchants., offering a range of financing and marketing analytics solutions to access working capital, improve cash flow and drive sales.
Salt Security nabs $70m
Company specialising in API security Salt Security raised $70m in Series C financing. The company will use the funding to expand its global operations across research and development, sales and marketing and customer success.
The Series C funding brings Salt’s total financing to date to $131m. In addition, Salt reported 400% revenue growth, 380% growth in the API traffic and 160% growth in employees compared to May 2020. Salt collects API traffic across an organisation’s applications and uses AI, machine learning and a big data engine to discover vulnerabilities across them. That way, the platform helps organizations detect and stop API attacks.
Enterprise security firm Tessian bags $65m
CA-based human layer security company Tessian raised $65m in Series C funding.
The round, which brought total funding to date over $120m and valued Tessian at $500m, was led by March Capital with participation from existing investors Accel, Balderton Capital, Latitude and Sequoia Capital and new investor Schroder Adveq.
The company intends to use the funds to continue to expand beyond email to secure other interfaces like messaging, web and collaboration platforms and triple its employee base, with a particular focus on growing its sales team in North America.
BNPL Resolve lands $60m
CA-based provider of an embedded billing platform for business-to-business (B2B) companies to facilitate buying and selling on credit Resolve raised $60m in funding.
Investors included Initialized Capital, KSD Capital, Haystack VC, Commerce Ventures, Clocktower Ventures, Affirm and other top investors. The company intends to use the funds to accelerate operations and its business reach. Launched as a spinout from Affirm in 2019 and led by Chris Tsai, Resolve is a digital terms and credit billing solution that extends buy now pay later capabilities for B2B transactions.
Uptycs snags $50m
Cloud-native security analytics platform that enables endpoint and cloud security Uptycs raised $50m in Series C funding.
The round, which brought the total amount raised to date to $93m, was led by Norwest Ventures, with participation from Sapphire Ventures and ServiceNow. The company intends to use the funds to accelerate growth and innovation of cloud-native security analytics platform. Uptycs provides a cloud-native security analytics platform for security analysts, site reliability engineers, incident response teams and IT professionals to observe and secure their cloud workloads and endpoints — all from the same place.
E-mail security firm Material Security reels in $40m
CA-based company that protects email accounts even after they have been compromised Material Security raised $40m in Series B funding. The round, which brought total funding to date to $62m, was led by Elad Gil, the angel investor behind Airbnb, Coinbase, Stripe and Square.
The company intends to use the funds to expand operations and its business to reach to additional geographies, as well as to grow R&D efforts. Led by Ryan Noon, Material Security provides a product suite that delivers admin visibility and control, account takeover prevention, anti-phishing and data leak prevention services.
DataDome adds $35m to its coffers
New York-based provider of an AI-powered SaaS solution that protects online businesses against bot-driven fraud DataDome closed $35m in Series B funding. The round was led by Elephant, with participation from existing investor ISAI.
The company intends to use the funds to scale its global sales, marketing, delivery and R&D teams. The company provides DevSecOps professionals with a full SaaS platform, combined with enterprise-level professional services and dedicated bot Security Operations Centers. It boats of servicing global digital commerce businesses including Axel Springer, AngelList Talent, Australia Post, carsales.com Limited and Foot Locker.
InsurTech Parametrix collects $17.5m
Israel-based IT Parametrix Insurance has raised $17.5m in funding to launch its cloud downtime insurance product. The funding round was led by venture capital firms FirstMark Capital and F2 Ventures.
Parametrix developed a multi-cloud based advanced monitoring system that tracks the availability and performance of third-party IT services across the globe. The system collects a massive amount of data and metrics every day. Parametrix claims it has detection capabilities down to the millisecond. Predictive modelling and risk assessment algorithms enable them to provide customers with a full insurance solution.
Algbra hauls in £3.75m
Algbra raised £3.75m in fundraising backed by SFC Capital, British Business Investments and New World Group in a bid to close the racialised wealth and social gap.
Following the round, Algbra is set to launch a core set of financial products, including current accounts, foreign exchange, remittances and rewards, with lending products to follow shortly. The UK-based values-focused digital finance provider aims to bring an end to community and ethnicity-based financial inequality.
Copyright © 2018 RegTech Analyst
