Hello TWIF UK & Europe friends,

Please find another week of fintech news, financings and exits below.

Editor’s Note: If you’re an early-stage startup founder raising equity or debt, I may be able to help - reach out to michael@thisweekinfintech.com.

Tweet of the week 🦉🏆

Funding 💸

There were 13 deals in the fintech space across the UK and Europe since the last post, with a total investment of $151m. Some highlights are below.

🇪🇺 Swan raised a €16m Series A led by Accel and included Bpifrance and Creandum

🇪🇺 Hedvig raised a €38.5m Series B led by Anthemis and included Cherry Ventures, Obvious Ventures, CommerzVentures, Novax and Nineyards Equity.

🇬🇧 TransferGo has raised a ¢50m Series C led by Elbrus Capital and Black River Capital.

🌍 Identity platform Alloy raised a $100m Series C at a $1bn valuation led by Lightspeed Ventures and included BVP, Canapi , Avid and Felicis Ventures

Challenger Banking 🚀

🇪🇺 German fintechs Trade Republic and Scalable Capital experienced increased growth after a summer slowdown unlike counterparts Etoro and Bux

🇪🇺 N26 was fined €4.25m by BaFin due to its lax money laundering.

🇬🇧 Wise co-founder Kristo Kaarmann is in hot water with HMRC over unpaid taxes. He was fined £350,000 but could cause issues at the FCA. Wise shares were down nearly ~8% over the last 5 days.

🇬🇧 Reports of fraudsters using Monzo accounts to steal millions from Barclays accounts using PISP raising fresh questions about security at Monzo.

🇬🇧 Savings app Chip is looking to raise £100m over the next two years for an aggressive growth strategy.

🇬🇧 Head for Points reported that the issuer of IHG Rewards and Marriott Visa cards are closing all accounts that have been used with a Curve Card in an ongoing dispute with the UK fintech. Curve also reported increased losses (£37.9m in 2020 vs £28.5m in 2019) as a result of growth.

🇬🇧 Reports of a huge gender pay gap (69p for every £1 men earn) at Revolut came to light which reflect a lack of women in senior positions but reports of same job pay discrepancies were denied.

🌍 Google has ditched its Plex checking account according to WSJ after missed deadlines and departing executives.

Digital Assets ₿

🌍 Coinbase will allow direct deposit soon for US customers, with the Coinbase Card now having the ability to spend $.

• 🙌🏻 TWIF Take - For me this has always made sense as a way to make it easy to get fiat into an exchange. It is unlikely that fiat currency ever goes away so having the ability to store both side by side on an exchange with a card should go a long way to further increasing adoption.

🌍 A prototype by the BIS of multiple CBDCs and four central banks has outperformed correspondent banking system in terms of cost and security.

🌍 Visa is building an interoperable payments channel for digital currencies.

• 🙌🏻 TWIF Take - With numerous central banks pursuing their own CBDCs, we could see a scenario where they are not interoperable and a middleware layer is needed to bring domestic networks together. Alternatively governments could cooperate and develop interoperable CBDC’s but that seems unlikely. This is Visa’s “network of networks” strategy being played out.

Traditional Banking 🏦

🇪🇺 Santander is closing its Wise rival PagoFX, another notch against incumbent banks copying a fintech.

🇬🇧 Barclaycard is enabling businesses to accept payments from cardholders in their local currency then auto converts into £,$ or € using a locked-in rate, designed to reduce FX volatility.

🇬🇧 JPMorgan partnered with 10x Banking for its new Chase bank it launched recently in the UK. Unsurprising given JPMorgan is an investor in 10x.

Fintech Infrastructure 🚧

🇬🇧 Starling is launching its BaaS product across Europe, continuing the trend of B2C fintechs launching B2B products.

• 🙌🏻 TWIF Take - Starling’s Baas product has been around in the UK since 2018 but fell off the radar as it seemed to be de-prioritised but given moves by other consumer fintech’s into the B2B space, Starling is joining them.

🇬🇧 HSBC is using Google Cloud to run “what if” climate risk scenario analysis on credit rankings.

Payments 💰

🇪🇺 Worldline is stepping into the account-to-account (A2A) space with a white label product for businesses.

🇪🇺 Europe’s European Payment Initiative looks set to receive total funding of €1.5bn, wit €148m being sanctioned by the German savings bank association.

🇬🇧 Mastercard has created “Installments”, a POS BNPL solution for online and offline commerce in UK, US and Australia.

🇬🇧 Researchers from Bristol and Surrey Universities found an Apple Pay exploit that allows for unauthorised payments from cards due to an iPhone “express transit” mode.

🌍 Singapore has announced plans to link its faster payments system with Malaysia, shortly after it linked up with India.

Regulatory Corner 🔎

🇬🇧 UK banks look set to launch an emergency hotline to consumers targeted for APP fraud.

🇬🇧 The chair of the UK’s Open Banking Implementation Entity (OBIE) has quit after an independent investigation found a culture of bullying and intimidation there.

🌍 International

Don’t forget to subscribe to TWIF US & Global by Nik Milanovic and TWIF India & SEA by Osborne Saldanha.

Longer reads 📜

• Sushi and the Founding Murder - The Generalist
• Summary of the most recent CBDC experiments - Luca Prosperi, Dirt Roads
• ICONIQ: The Nexus of VC, Hollywood and Silicon Valley - Akash Bajwa
• Ultimate Guide to Interchange Revenue - Unit
• Underexplored tactics of driving card adoption - Ayo
• Reinventing the Payment - Paul Anthony, Primer
• Open sesame with open banking - Lily Shaw and Charlie Renzoni, Omers Ventures

Want to be a This Week in Fintech - UK & Europe sponsor? Reach out to me at michael@thisweekinfintech.com or find me on Twitter.

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See you next week!

Michael