From: FinTech Global
Buy now pay later companies continued their winning streak last week as 25 FinTechs raised big rounds.
2020 may have been a dumpster fire of a year, but FinTech companies around the world successfully navigated the Covid-19 pandemic and the consequential market uncertainties to make it one of the most successful years to date. The ten biggest deals in the year raised over $5.53bn combined.
While 2021 has only just begun, things are already picking up steam in the FinTech sector. Last week, FinTech Global reported how 25 different FinTech companies have kicked off the year by securing funding to grow their ventures through the next 12 months.
Unsurprisingly, the week saw the regular smattering of cybersecurity, RegTech and InsurTech raises we’ve become accustomed to over the year as each sector have seen demand for their services skyrocket over the course of the pandemic.
Last week’s biggest round was indeed raised by Lacework, a security and compliance platform. The venture achieved its unicorn status after the close of a $525m funding round.
The last week also saw a healthy influx of capital into the challenger bank industry with Oxygen and Oxbury both raising significant rounds last week.
However, the sector that made significant strides and caught our eyes last week was the buy now pay later (BNPL) industry.
Last week, BNPL platform Uplift announced that it had secured a $68m credit line from Atalaya Capital Management. This was hardly the biggest deal in the past seven days, but it came at a time when the BNPL space has been heating up.
The biggest sign of that is the fact that Klarna became Europe’s most valuable privately owned FinTech company in September by securing a $10.65bn valuation on the back of closing a $650m funding round.
At the time, several experts we spoke with believed the raise would trickle down and strengthen the emerging Scandinavian FinTech ecosystem further. It had already seen the rise of exciting ventures such as neobanks Lunar and indó, open banking platform Tink, and FinTech unicorns such as Bambora and iZettle.
“Klarna [is] further proof that it is possible to build large companies, even FinTech companies, outside of the US and London,” Kjartan Rist, partner at European venture capital firm Concentric, told us at the time.
Klarna subsequently raised another round from Macy’s in October, further fuelling the rumours that the company is about to go public in a not too distant future.
Nevertheless, Klarna is far from alone in the market, as Uplift’s cash injection last week proved.
In fact, the BNPL space is getting crowded. For instance, PayPal has recently launched an instalments solution in the US and in the UK, BNPL companies Zilch, Split and Tabby recently raised funding rounds, and Curve has teamed up with Thought Machine to power its instalments startup Curve Credit.
In Australia, that increasingly crowded space has even led to some harsh words being traded between Klarna and its Australian rival Afterpay. The war of words essentially boiled down to whether or not they were making merchants pay too much for the privilege of using their services and which company had the biggest market share.
At the same time, the sector has been facing criticism. In Sweden, Klarna’s CEO has been arguing with the nation’s government about whether BNPL services may put people at risk of ending up in financial trouble by enlisting credit services that they cannot afford. Similar arguments have been raised elsewhere as well.
Nevertheless, with Uplift’s raise and the fact that a quarter of customers used these services to fund their Christmas shopping in 2020, the sector is seemingly still set to grow.
With that in mind, let’s take a closer look at the 25 funding rounds raised by the FinTech industry in the last seven days.
Lacework has secured a $525m funding round
Lacework, a security and compliance for the cloud generation solution, has achieved a $1bn valuation after the close of a $525m funding round.
Sutter Hill Ventures and Altimeter Capital led the raise with additional support coming from D1 Capital Partners, Coatue, Dragoneer Investment Group, Liberty Global Ventures, Snowflake Ventures and Tiger Global Management. This investment comes after Lacework a revenue growth of over 300% in 2020.
Lacework will use the new money to grow its operations and expand its engineering and R&D teams across the US and Europe. Funds will also help it deliver additional integrations across the devops toolchain and into security data lake initiatives.
Paycor bags $270m in funding
Paycor has collected $270m in a new investment round. Among other things, the payroll and human capital management software developer has created tools to better manage recruiting and applicant tracking, onboarding, HR, benefits, learning management, scheduling, time and attendance, payroll, tax, reporting and analytics.
Qatar Investment Authority and Neuberger Berman co-led the raise. ClearBridge Investments, Franklin Templeton, Leumi Partners and Teca Partners were named as other backers behind the raise.
CRED secures $81m Series C round
India-based FinTech CRED has secured $81m in a new Series C round. It also bought shares worth $1.2m from employees. DST Global led the round and enjoyed the support from Sequoia Capital, Ribbit Capital, Tiger Global and General Catalyst as well as a few angel investors.
Divvy secures $165m Series D round
Expense management platform Divvy has closed a $165m Series D round at a valuation of $1.6bn. New investors Hanaco, PayPal Ventures, Whale Rock and Schonfeld joined previous backers NEA, Insight Venture Partners, Acrew and Pelion to support the raise. Divvy’s centralised platform empowers businesses to manage their spend with real-time visibility and control over their budgets by combining free expense management software with corporate credit cards.
iboss nets $145m in funding
Cybersecurity company iboss has closed $145m in fresh funding to support its rise in demand. The news comes after a year in which the Covid-19 pandemic pushed demand for cybersecurity solutions to skyrocket as businesses looked for solutions to protect employees while they were working remotely. With the new investment, iboss is betting that it will be able to leverage the growing demand to achieve continued growth as it keeps delivering network security via the cloud that is set up to defend businesses from online attacks.
Mambu secures $2.07bn valuation on the back of $134.43m raise
Banking platform Mambu has topped up its coffers with a $134.43m round, firmly placing it in unicorn territory. On the back of the raise, Mambu now boasts having secured a $2.07bn valuation. TCV led the round with participation from Tiger Global, Arena Holdings, Bessemer Venture Partners, Runa Capital and Acton Capital Partners. The FinTech unicorn will use the money to fuel its growth and strengthen its footprint in over 50 countries.
SimpleNexus secures $108m in its Series B
Digital mortgage platform SimpleNexus has secured $108m in its Series B round, which was led by private equity firm Insight Partners, which previously invested $20m into the PropTech company back in 2018.
SimpleNexus founder and CEO Matt Hansen expressed some serious bullishness about how the two-year old partnership and the new investment will fuel to company’s growth.
“As we historically have been self-funded, we know that this new partnership with Insight Venture Partners will catalyse our growth and provide our executive team with the additional resources to drive market expansion,” he said.
Uplift scores a $68m credit line from Atalaya Capital Management
As mentioned earlier, last week saw BNPL platform Uplift score a $68m credit line from Atalaya Capital Management.
This equity infusion will extend financing to Uplift customers looking to book travel, giving them the chance to pay off the bill in instalments. The platform enables purchases with travel brands include United Airlines, Carnival Cruise Line, Southwest Vacations and others.
More than 100 travel brands already use Uplift’s solutions. Over the course of the next 18 months, Uplift is expecting to exceed $1bn in transaction volume.
TagPay bags €25m in new funding
France-based TagPay, which offers a open core banking system for financial service providers, has collected €25m in its latest funding round. The round was backed by private equity firm Long Arc Capital, which took a majority stake in the company as part of the deal. With the round closed, TagPay will use the capital to strengthen its sales, product and technical teams. It will also fund additional growth efforts.
Pennylane said to raise $18.4m in funding
France-based FinTech Pennylane has secured $18.4m in funding to support the development of its bookkeeping tools. The round was supported by existing Pennylane investors Global Founders Capital and Partech. Pennylane provides businesses with a platform to manage cash flow in real-time with tools to track, categorise, visualise and manage funds. Clients can also manage purchases, simplify sales, and more.
Syndio closes $17.1m Series B
Syndio has collected $17.1m in its Series B. Bessemer Venture Partners served as the lead investor. Next Play Capital, Concrete Rose Capital, Emerson Collective and Voyager Capital also contributed to the round.
Syndio is set up with the aim of empowering employers to eradicate unlawful pay disparities due to gender, race and ethnicity. Founded in 2017, Syndio’s flagship product is PayEQ. It is used by more than 100 companies to analyse and resolve pay disparities based on gender, race and ethnicity across 2.3 million employees.
Oxygen secures $17m Series A round
Digital banking platform Oxygen has collected $17m in its Series A funding round, which will help it build new banking products. The investment was backed by Runa Capital, S7V, 1984.vc, EFG Hermes, Rucker Park and Inventures.
A number of celebrities and prominent FinTech investors also contributed to the round, including NFL wide receiver Larry Fitzgerald, Deutsche Bank global CEO Frank Strauss, Plaid co-founder William Hockey, and Teachable founder and CEO Ankur Nagpal.
Oxygen claims to be the first and only neobank in the US to launch with both the customer and small business in mind. The FinTech was designed to meet the various ways people live and work, with flexible banking solutions.
Oxbury set up for launch on the back of $15m round
Agriculture-focused challenger bank Oxbury has secured £15m in new funding as it is preparing to officially launch later in January. The Duke of Westminster’s Wheatsheaf Group supplied the backing, according to the Telegraph. Hutchinsons and Frontier Agriculture have previously backed Oxbury financially. Oxbury received its banking licence in February last year and had originally scheduled a 2020 launch.
Contrary to more commercial neobanks such as Revolut, Starling Bank and Monzo, Oxbury’s focus is on providing farmers with seasonal cashflow services. Although it will also provide savings accounts for businesses and individuals, it will in other words operate in a similar fashion to OakNorth.
For a long time, OakNorth was the only challenger bank in the UK that had managed to balance its finances. However, at the end of last year both Revolut and Starling Bank reported that they had managed to balance their books.
Betterfly extends its Series A by $9m
Chile-based InsurTech startup Betterfly has reportedly collected an additional $9m for its Series A, bringing the round total to $17.5m. The company previously announced it secured $8.5m in Series A funding in July 2020. QED Investors acted as the lead investor.
With the capital injection, the InsurTech is planning to deepen its product offering, reach more businesses, create embedded insurance policies and expand across Latin America. The company is initially focusing on the Brazil market, it said.
Finja collects $9m in Series A
Pakistan-based Finja has collected $9m in its Series A funding round, which will help it to scale its product and marketing efforts. The company has the flexibility to raise an additional $1m in funding, it said. ICU Ventures, BeeNext, Vostok Emerging Finance, Quona Capital and Gray MacKenzie Engineering Services backed the raise.
BharatPe closes $8.2m in funding
BharatPe, a QR-based payments company, has reportedly raised around $8.2m in venture debt from InnoVen Capital. The funds are part of BharatPe’s plan to raise between $500m and $700m of debt capital during the next two years. BharatPe is also said to be looking to raise another $150m-$200m in equity.
ThingCo raises $4.2m in funding
InsurTech100 company ThingCo has reportedly closed a $4.2m funding round from BHL Holdings. With the capital injection, the InsurTech is hoping to manufacture and release more solar panel devices for its Theo solution. Funds will also be used to launch its direct to consumer service. ThingCo is leveraging the internet of things by using connected devices to provide a more tailored car insurance experience.
Vauld closes $2m funding round
Last week we reported that cryptocurrency management platform Vauld has secured $2m in a funding round led by Pantera Capital. Other contributors to the round include Coinbase Ventures, LuneX Ventures and Compound Finance founder Robert Leshner, according to an article from Coindesk. Singapore-based Vauld is currently available in India and will use the funds to increase its hiring efforts to support growth in the country. Funds will also be used to launch payments and trading services.
Ondato secures $2m raise to fuel European expansion
The digital identity market is huge and it is only set to grow. By 2027, the global industry is expected to be worth $29.79bn. Lithuanian identity verification company Ondato is one of the companies trying to get in on the growth of the market. To that end, it has secured $2m in seed capital to fuel its continued European growth, which has been powered by Covid-19. OTB Ventures led the raise. Ondato also announced that it would move its headquarters to London on the back of the raise. Ondato will also look to expand into Germany, France and Spain in 2021.
PropTech platform Rendin collects €1.2m in its seed round
Having only launched in 2020, the Estonian PropTech platform Rendin has reportedly collected €1.2m in its seed funding round, which will support its expansion efforts. The investment round was backed by Tera Ventures, Iron Wolf Capital, Truesight Ventures, Atomico’s Angel Programme and Startup Wise Guys.
Zerone Microsystems said to raise $1.3m in its pre-Series A
Point of sale software developer Zerone Microsystems has reportedly bagged $1.3m in its pre-Series A round, which was led by IAN. Other investors backing the round include TCA and a number of angel investors. With the fresh capital, the company is looking to scale its offering and release additional features, including games, accounting and more.
Brickowner secures £500,000 in crowdfunding round
Property investment platform Brickowner has reportedly collected £500,000 in a Seedrs crowdfunding campaign. The fresh equity will be used to hire more staff, explore new technology developments and launch a secondary market in the first quarter of 2021.
Finsall secures $328,000 in funding
InsurTech startup Finsall has reportedly raised $328,000 in its seed funding round, which was led by Unicorn India Ventures. Other participants to the round include SEA Fund as well as several angel investors including SupplyAI CEO Karthik Sridhar. This equity will be used to strengthen its team, scale up the platform, onboard more insurance companies and lenders. Finsall partners with insurance companies and offers financing against general insurance. Salaried, self-employed and business owners are all eligible for loans and clients can choose what insurance company to buy the policy from.
Groundspeed Analytics secures Series C
Groundspeed Analytics has closed its Series C investment round. It will use the funds to accelerate its product development. Insight Partners acted as the lead investor, with existing backer Oak HC/FT participating in the round. The capital injection will be used to bolster product development and adoption of its software, as well as international expansion. Groundspeed will continue to put funds towards the development of AI solutions.
Venafi has secured additional funding
Cybersecurity company Venafi has reached a $1.15bn valuation after securing an investment from private equity firm Thoma Bravo. This investment is expected to accelerate the development of Venafi’s technology to capitalise on the rise in machine identity management. Existing investors of TCV and Foundation Capital will remain shareholders in the company. Venafi is a machine identity management platform that protects machine identity types by orchestrating cryptographic keys and digital certificates for SSL/TLS, SSH, code signing, mobile and IoT.
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