Funding Overview:
During May, across the various segments that I monitor across the Fintech landscape, there was approximately US$1.6bl in earlier stage funding announced. This was allocated across just less than 80 firms. The breakdown of funding showed that very early financing was of course weakened more so by the range of broadly adverse macro and geo-political factors than other rounds. Overall, payment and crypto deals, though capturing much less funding than the broader Fintech/Financial Services segments raked in nearly US$25ml per deal, or about 30% more on a per deal basis. US based companies acquired about 50% of the funding in the broad fintech and crypto categories, with UK based companies also doing noticeably well, against a backdrop of very weak EMEA funding, outside of the BNPL segment which is still managing on a jurisdictional basis to attract large capital raises.
Funding Trends:
One of the common themes of the month was that Fintech players with a clear path to revenue and profitability through the provision of regulated financial services continue to attract the largest amounts of funding. These innovators are often providing vertically integrated solutions, and along with core financial technology infrastructure enablers aiming to target SME and institutions with payment, business services and cryptocurrency financial solutions have continued to progress their funding plans despite the challenging market conditions. In the later, there continues to be strong belief that institutional adoption and participation in the wider digital asset landscape will be inevitable and sizeable even while many of the early initiatives to democratize digital assets have floundered.
Noted Fintech Deals in May
Notable Payment Related Funding in May
Notable Crypto Related Funding in May
Big Deals > $50ml of Financing Announced in May 2022
Deal 1: Bibit.ID
Consumer Focused WealthTech Initiative, US$80ml new financing, with total financing now at US$175ml for a firm that has over 500 employees. Continued support for the leading “robo” wealth platform in Indonesia now boasting more than 5ml users. [FS = yes]
Deal 2: Creditspring
Consumer Focused Lending Initiative, US$60ml new financing (for lending purposes) with total financing now at US$80ml for a firm with less than 50 employees. Continued lending support for consumer financing platform aiming to help those with thin credit records or with non-credit histories. [FS = yes]
Deal 3: Stable
A platform to assist different types of direct business consumers of commodities and intermediaries with risk management, and hedging capabilities. Latest raise of US$60ml takes total financing announced to US$112ml. Platform is innovative in its ability to utilize local indices, eliminate margin calls and generally improve the quality of risk matching. [FS = yes]
Deal 4: Clearstreet
A capital markets platform to modernize and transform prime brokerage and institutional trading, employing 300+ employees. Latest raise of US$165ml was the largest in the month taking total financing to US$335ml from a host of non-traditional venture backers. Platform has been imagined as a vertically integrated front to back solution with rich analytics and reporting. [FS = yes]
Deal 5: Addx
A private equity investment platform for non-institutional clients, this time based in Asia/Pacific. (Singapore). Latest raise of US$58ml in series B taking total financing to US$116ml. Backers bring together banking, consultancy, and exchange capabilities. Platform opens up a broader spectrum of investibles to intermediaries of HNW clients including direct, fund specific and fund of funds vehicles. [FS = yes]
Deal 6: Xepelin
One of the largest funding outside of Brazil in Latin America for a Chiliean Fintech lending and business service management platform for SME and Corporate clients. Firm has grown to more than 200 people and latest funding adds US$111ml, bringing total announced funding to US$427ml. Platform designed to bring working capital and credit monitoring close together. [FS = yes]
Deal 7: Kevin.eu
Offering a next generation payment infrastructure platform to provide flexible payment options with reduced fees to merchants. Latest funding represented the 3rd significantly large funding by a Lithuania company following the US$100ml+ fundings of Nord Security and Venus Swaps in 2022. Major differentiator is based around its account to account payment model. [FS = yes]
Deal 8: Payin3
A BNPL direct to consumer provider that is operating out of the Netherlands and has a very specific 3 installment payment model that it underwrites through its own receivable financing entity. The latest raise represents the largest Fintech Series B raise ever completed by a firm that is HQ in the Netherlands (Eindhoven) [FS = yes]
Deal 9: Babel Finance
This is one of a number of Unicorn fundings that occurred for Cryptocurrency related platforms during May. The total investment of US$80ml for a HK based business is perhaps surprising given the expressed hostility China has had, and underpins the commitment that Tiger Global and others have toward a company that is seeking to provide a cross functional institutional platform that wants to be able to support all investment opportunities that are presented through buying and holding cryptocurrency
Deal 10: Elwood Technologies
This is another impressive fund raising by an institutionally oriented crypto business with the emphasis here on creating a truly institutional style integrated trading and risk management platform (a la Murex, Calypso). The US$70ml was the largest Series A funding completed in May and brought in investment from Goldman and Barclays who joined the heavy weight venture underwriters one has been increasingly seeing. The fact that it was in the UK will undoubtedly be pleasing to the Chancellor.
Deal 11: Talos
As Elwood was raising its funds, Talos, which is another API led infrastructure front to back infrastructure play in Cryptocurrencies was executing a Series B round of US$105ml, with participation from BNY Mellon and Citi alongside Galaxy who also invested in Elwood underpinning their interest in institutional trading platforms and particularly in solution designs that cover both pre and post trade execution, compliance, along with clearing and custody.
