N26 Extends Series D to $470M and Launches in the US, Uber to Drive Financial Inclusion, Nubank & Robinhood Raise $400M and $323M Mega Rounds

July has been super interesting and really intense for the FinTech sector. Challenger banks are emerging in Japan with Kyash raising $14 million, Uber has partnered with BBVA to drive financial inclusion, JPMorgan has rolled out a roboadvisor, N26 has extended its Series D and launched in the US, Nubank and Robinhood have raised some crazy amounts of money and much much more.

Hence, without further ado, let us dive into what has happened in the financial technology sector this past month.

Kyash, Emerging Challenger Bank in Japan, Raises $14M

The new era of tech-enabled banks is coming, even in regulation-heavy Japan. Kyash, a FinTech company with visions on becoming Japan’s first challenger bank, during the first week of July has raised $14 million to continue its expansion.

Kyash isn’t a bank yet, but it is currently applying for a host of licenses in Japan that could allow it to offer banking-style features, including checking accounts, ATM withdrawals and money remittance. Right now, it is a payment app that offers a connected Visa card in the style of Monzo, N26, Revolut (which has a Japan license) and others of that ilk.

The startup was founded in 2015 by Shinichi Takatori, a former banker and management consultant who saw the potential to merge tech and finance.

The company took some time — two years — before it released a consumer product, but it quickly tied up with Visa to offer a prepaid debit card that connects to the Kyash app. That provides benefits like instant payment notifications, clear balance and lower fees for overseas spending, while costs are borne by merchants rather than users. They might seem elementary today, but they are still not standard among Japan’s traditional banks.

The $14 million investment is co-led by Goodwater Capital, a U.S. investor that has backed FinTech startups like Monzo, Stash and Toss in Korea, and Mitsubishi UFJ Capital, the investment arm of Japan’s largest bank.

Mitsubishi’s involvement means that Kyash counts Japan’s three largest banks as investors, with SMBC and Mizuho having previously put money into the company. Others that took part in this Series B include Toppan Printing, JAFCO and Shinsei Corporate Investment Limited.

Currencycloud Raises £32M

Further, during the same week, London-based cross-border payments business Currencycloud has raised £32 million in the first part of a Series E funding round, according to TechCrunch.

Citing sources and regulatory filings, TechCrunch says the £32 million is likely to be the first tranche in the round, with more money to come within the next couple of months ahead of a formal announcement.

Goldman Sachs could be leading the round, with existing investor GV (formally Google Ventures) joining. Banco Santander and its corporate venture fund is also in the frame.

Currencycloud's suite of APIs is used by a host of big names - including Visa, Klarna, Standard Bank and Revolut - to enable international money transfers.

Uber Partners with BBVA to Drive Financial Inclusion

Uber is tapping the power of Open Banking to provide unbanked drivers with access to a digital account from BBVA within its mobile app in Mexico. The deal will see the bank in Mexico make its services available on a third-party application for the first time.

BBVA's digital account is linked to a Mastercard "Driver Partner Debit Card", to which payments are disbursed. Additionally, users will be able to access loan products from within app and discounts and reimbursements for gasoline purchases paid by card.

Carlos López-Moctezuma, Head of Open Banking at BBVA, says the alliance is a significant milestone in the bank's Open Banking programme:

For the first time we are offering a BBVA product that will ‘live’ in a third party’s platform. In other words, we are bringing the bank to our partner, who in turn is bringing us to their drivers and delivery partners, so that they can take advantage of all the benefits that the bank has to offer, all with a single click.

Deutsche Bank to Spend €13B on Tech Amongst Gigantic Job Cuts

The second week of July was really intense and hot in the world of FinTech. It started off when Deutsche Bank has announced swinging job cuts as part of a fundamental overhaul of its operations that will also see it spend €13 billion on new technology over the next four years.

On that Sunday, the bank's chief executive Christian Sewing revealed that it will be shedding nearly 20k jobs (18,000, to be precise), equivalent to one fifth of its global workforce, in its latest attempt to restart the bank.

The plan will see Deutsche effectively exit most of its investment banking activity to focus on corporate and private banking and asset management instead. The end of equity trading and a significant scaling back of its fixed income operations will affect staff in New York, London and Asia-Pacific where a number of teams were let go on Monday morning.

Further, the bank is also looking to spin off more than €70 billion worth of badly performing loans into a separate bad bank as it looks to reverse its ailing fortunes and tarnished reputation after a series of heavy regulatory fines over recent years. 

Despite the job cuts, Deutsche is looking to increase its IT budget. In a letter to employees, Sewing wrote that the bank would be investing €13 billion in technology by 2022 as part of an effort to increase both innovation and efficiency.

The bank hopes to save around €17 billion in costs by 2022 but also expects to lost €7.4 billion in lost profit and restricting costs as a result of the changes.

The announcement has at least been initially welcomed by financial markets with its share price up by 3% to €7.42 per share as of that Monday morning. However, the fact that its share price was up around the €40 mark less than 10 years ago shows the problems that have beset the bank in the decade since the financial crisis.

Domino's Australia Trials 'Tap & Take' Cashless Stores

Pizza chain giant Domino's is the latest mainstream retailer to try out cashless payments, rolling out a new Tap & Take model at five of its outlets in Australia - the news was announced on the second week of July.

Domino’s Australia and New Zealand CEO Nick Knight says the trial stores will ditch cash as an option and instead accept only credit card, debit card, eftpos and mobile/apple watch in-store and for online delivery.

He further commented:

With the growth of tap-and-go payment systems and mobile payment technology, use of cash is slowing and we’re seeing that right across our network. We’re now heading towards a very real future where the legal tender could be solely electronic, so it’s important that we remain digitally agile and continue to meet consumer demands.

Knight adds that the move will also increase employee safety, with zero cash being held on the premises or carried by take-out drivers.

Visa Invests in Crypto Custodian Anchorage

Moreover, digital asset custody services provider Anchorage has raised $40 million in a Series funding round led by Blockchain Ventures and joined by Visa and Andreessen Horowitz.

Since launching in 2017, Anchorage has signed up a host of big name institutional investors as clients, helping them to keep their crypto assets safe.

The firm requires two members of a client to approve transactions and uses behavioural analytics to review requests before hardware security modules process the transaction.

Anchorage, which was recently included in the Facebook-led Libra Association, plans to use the latest funding to add support for new assets, and new features such as participating in on-chain governance, and to look into unlocking services beyond custody.

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JPMorgan Rolls Out Robo-Advisor

The same week, JPMorgan has rolled out a digital investment service, You Invest, targeting customers with as little as $2500 to invest. Available on Chase.com and the Chase mobile app, the service builds portfolios to match individual consumer preferences for risk tolerance, financial goals and time horizon. 

Portfolios are created using a diverse mix of JPMorgan ETFs and customers are charged an industry average annual fee of 0.35% of assets, or 35 basis points.

The robo-advisory roll out comes after a year of user trials at 27 branches in New York. 

“Customers can now bank, save, borrow and invest in one of our 5,000 branches as well as on the go,” says Thasunda Brown Duckett, CEO of Consumer Banking at Chase. “Our firm continues to invest in technology and experiences that help customers make the most of their money, so that they can makes the most of their lives.”

You Invest is an extension of You Invest Trade, a self-directed digital brokerage product launched by the bank last year.

Curve Picks up $55M in Series B Funding

The third week of July has started with the news from Curve, the UK FinTech that consolidates multiple cards and accounts into one smart card and app, which has secured $55 million as part of a Series B funding round, valuing the company at a quarter of a billion dollars.

The investment places Curve in the top five UK consumer FinTechs next to Transferwise, Monzo, Revolut and Starling, according to data from Dealroom and Invyo insights.

The round is being led by Gauss Ventures, alongside other prominent investors such as Creditease, Cathay Innovation, IDC Ventures and further participation from Outward VC (previously Investec’s INVC fund), Santander InnoVentures, Breega, Seedcamp and Speedinvest.

While conventional challenger banks like Monzo and Starling are going the full bank current account route, Curve is aiming at the the 'connected finance' space, combining all payment cards into one Mastercard connected to a mobile app. 

Curve, which launched out of Beta in February 2018, is on track to welcome its millionth customer by the year end. The Curve team now has over 150 people in its UK offices in London and Bristol. 

Already available in 31 European countries, Curve plans to use the fresh funding to expand its product offering in the UK, Europe and overseas. It will officially launch into six European markets later this year: France, Germany, Italy, Poland, Portugal and Spain, and aims to launch its operations in the US by mid next year.

PayPal Launches Xoom Across Europe

Further, PayPal announced that it is to launch its international money transfer Xoom across 32 European markets. Acquired by PayPal in 2015, Xoom allows people to send money, pay bills or top up phones to more than 130 markets internationally.

Already available in the US and Canada, the roll out across Europe is expected to increase PayPal's share of the $689 billion remittance market. 

Dan Schulman, PayPal’s CEO and President, said:

The way we move and manage our money has changed dramatically in the last few years. We have moved beyond the days when the only option for sending money abroad was to queue at a counter for hours. With Xoom, someone with a smartphone on a bus in London, Paris or Berlin can send money that can be accessed quickly in Mumbai, Lagos or Nairobi.

Xoom is available via a standalone mobile account or through the PayPal app. 

N26 Extends Series D to $470M

More over, German digital bank N26 has raised its Series D funding round to $470 million, valuing the company at $3.5 billion.

The $170 million extension to January's $300 million raise ranks the challenger among the top ten of the most valuable FinTechs worldwide.

The new funds were raised from among previous investors in January, including Insight Venture Partners, GIC (Singapore’s sovereign wealth fund), Tencent, Allianz X, Peter Thiel’s Valar Ventures, Earlybird Venture Capital, and Greyhound Capital. 

Launched in Germany and Austria in January 2015, N26 began as a current account with a Mastercard. It now operates as a fully-featured bank, serving 3.5 million customers in 24 European markets. To date, N26 has raised more than $670 million.

Earlier this month it began to make its app available to 100,000 Americans who signed onto a waitlist, ahead of a full-scale launch in its first market outside of Europe later this summer.

Alongside the expansion drive, N26 plans to roll out additional features, including a new facility dubbed 'Shared Spaces', which will enable customers to create sub accounts within N26 and share them with up to 10 people for group savings goals.

The firm also expects to make heavy investment in organizational and structural growth, having already tripled its workforce to more than 1,300 employees in the past 12 months.

Australian Neobank 86 400 Wins Banking Licence

Finally, the week was closed when Australian app-only bank 86 400 has been granted a full Authorised Deposit-taking Institution (ADI) licence by the Australian Prudential Regulation Authority (Apra), paving the way for a live launch within the next few weeks.

Chaired by British banking pioneer, Anthony Thomson, 86 400 intends to challenge the dominance of the country's Big Four banks with the aid of a suite of proprietary app-based technology tools.

The license means 86 400 - which will launch with transaction and savings accounts - is able to take unlimited customer deposits and has met the same regulatory requirements as the Big Four banks.

Landing on the App Store and Google Play within the next few weeks, the service will be available first to those who have signed up via the waitlist on the 86 400 website. From launch, 86 400 customers will have access to all the digital pays - Apple Pay, Google PayTM, Samsung Pay, as well as FitBit Pay and Garmin Pay - along with a Visa debit card, ATM access and real-time payments via Osko, an overlay service to Australia's New Payment Platform which enables account-to-account payments via e-mail and mobile phone numbers.

Robinhood is Now Valued at $7.6 billion with $323M New Funding

The 4th week of July was also strong - stock trading app Robinhood has raised a massive $323 million round of financing at a $7.6 billion valuation.

Seemingly undeterred by Robinhood's drastic misstep last year when it was forced by regulators to pull plans to launch a banking account, the round was led by DST Global, with participation from investors including Ribbit Capital, NEA, Sequoia, and Thrive Capital, 

New features that survived the pushback include the creation of its own clearing system, premium accounts with Nasdaq Level 2 market data, digestible news bites from Robinhood Snacks and crypto trading in 30 states.

Singapore's soCash Raises $6M to Convert Retail Stores Into Virtual Branches

Moreover, SoCash, a Singaporean startup that converts shops and cafes into virtual bank branches, has raised $6 million in Series A Financing, led by Japanese cash automation company Glory, with participation from Standard Chartered's venture fund and SouthEast AsianVC Vintex Ventures.

SoCash users can place a cash order via a mobile app and select a nearby merchant to collect the funds from, while the app deducts the selected amount from the customer’s account. Customers can also perform loan application at shops via the app.

The firm's technology plugs directly into bank back-ends via an API to automate the correspondence. Customers include Singapore's top banks, Standard Chartered, ICBC, POSB and DBS and the cash disbursement network runs to 1400 locations, including retail chains like SPH Buzz, U Stars supermarket, iECON stores and 7-Eleven.

The startup says it will use the funds to expand into neighbouring markets in Indonesia, Malaysia and Hong Kong.

Facebook Prepares WhatsApp Pay for Indian Launch

WhatsApp is set to launch its P2P payments system later this year, beginning in India, before rolling out to its 1.5 billion users globally - this was announced during the 4th week of July.

The Facebook-owned messaging system has been testing the system in India for the past year, where the app has 400 million users.

The idea behind WhatsApp Pay is to make transferring cash as easy as sending a message. The move deepens Facebook's interest in the payments industry, coming in the wake of the reveal of the social media giant's planned cryptocurrency Libra.

In May, Facebook let slip that it had chosen London as the base for a new team dedicated to bringing payments to its WhatsApp messaging service.

Speaking at the firm's developer conference, Mark Zuckerberg stated: "Payments is one of the areas where we have an opportunity to make it a lot easier. I believe it should be as easy to send money to someone as it is to send a photo."

London Stock Exchange Negotiating $27B Takeover of Refinitiv

Finally, the last week of the month was super intense. It has started off with The London Stock Exchange confirming that it is in advanced talks to buy financial data provider Refinitiv.

Under the key headline terms, it is expected that LSEG would acquire Refinitiv for a total enterprise value of approximately $27 billion. The parties anticipate that the transaction would result in Refinitiv shareholders Thomson Reuters and Blackstone holding an approximately 37% in the enlarged group and less than 30% of the total voting rights of LSEG.

Refinitiv currently serves over 40,000 customer institutions across 190 countries including buy and sell-side firms, market infrastructure companies, governments, financial technology firms and corporations. Refinitiv’s trading venues business includes a stake in the Tradeweb trading platform and ownership of the FXAll and Matching platforms (coveted by Deutsche Bourse), among others, with average daily trading volume of over US$400 billion in FX and US$500 billion in fixed income.

An agreement between the two would put the combined group on a par with Bloomberg. Together LSEG and Refinitiv would be the largest listed global financial markets infrastructure provider by revenue, with combined annual revenues of over £6 billion in 2018. In addition, LSEG believes that annual run-rate cost synergies in excess of £350 million would be deliverable in the five years after completion.

Nubank Valuation Jumps to $10B on $400M Mega Round

Further, Brazilian neobank Nubank has raised $400 million in its largest investment round to date, valuing the six-year old startup at an impressive $10 billion. The round was led by US-based TCV, with participation from existing investors Tencent, DST Global, Sequoia Capital, Dragoneer, Ribbit Capital, and Thrive Capital. The company has now raised $820 million across seven venture rounds.

The latest funding comes on the back of exceptional growth for the digital-only bank, which has more than doubled its customer base to over 12 million people in Brazil since its last funding in 2018.

During this time Nubank's product portfolio has evolved beyond its original app-controlled credit card and rewards products to include personal loans and digital savings accounts for consumers, as well as small and medium-sized businesses and microentrepreneurs. 

Currently Brazil's sixth-largest financial institution by number of clients, Nubank also started its international expansion in May of this year, opening offices in Mexico and Argentina with plans to commence operations in both countries over the coming months.

Nubank today has more than 1,700 employees in Brazil, Germany, Argentina, and Mexico. The company expects to significantly grow its employee base over the next few years as it expands into new territories.

David Vélez, Founder and CEO of Nubank, commented:

We are always looking for the best talent in the world. We build strong and diverse teams with professionals from different cultures to jointly challenge the status quo and reduce complexity. We are a technology company by nature and, therefore, we want the best software engineers as part of our global team.

Flutterwave and Alipay Partner on Payments Between Africa and China

During the same week, San Francisco and Lagos-based FinTech startup Flutterwave has partnered with Chinese e-commerce company Alibaba’s Alipay to offer digital payments between Africa and China.

Flutterwave is a Nigerian-founded B2B payments service (primarily) for companies in Africa to pay other companies on the continent and abroad.

Alipay is Alibaba’s digital wallet and payments platform. In 2013, Alipay surpassed PayPal in payments volume and currently claims a global network of more than 1 billion active users, per Alibaba’s latest earnings report.

A large portion of Alipay’s network is in China, which makes the Flutterwave integration significant to capturing payments activity around the estimated $200 billion in China-Africa trade.

Capital One Data Breach Leaves 100 Million Vulnerable

Capital One revealed on Monday that 100 million credit card applications had been accessed, resulting in thousands of Social Security and bank account numbers being left at risk. 

Dubbed one of the largest data breaches to hit a financial services firm, the Capital One hack is expected to cost the company between $100 million and $150 million. 

The FBI compliant says that although some SS numbers had been tokenized or encrypted, information such as names, addresses, dates of birth and credit history had not. The data at risk includes “likely tens of millions of applications and approximately 77,000 bank account numbers.”

However, the company reiterates that no credit card numbers or log-in credentials were compromised, nor were most of the Social Security numbers on the applications. 

After a number of online boasts under the online alias ‘erratic’, Seattle-based Paige A. Thompson was arrested on computer fraud and abuse charges and on suspicion of “exfiltrating and stealing information, including credit card applications and other documents, from Capital One,” according to a criminal complaint filed in federal court. 

Paige formerly worked for Amazon Web Services, which hosted the Capital One database that was breached. She will remain in jail pending a detention hearing on Thursday. 

Richard D. Fairbank, Capital One’s chairman and chief executive, apologised: “While I am grateful that the perpetrator has been caught, I am deeply sorry for what has happened. I sincerely apologize for the understandable worry this incident must be causing those affected and I am committed to making it right.”

This news comes soon after the meme-worthy $700 million Equifax data breach settlement which left a staggering 147 million people vulnerable in 2017.

Revolut Moves Into Robinhood’s Land with Fee-Free Stock Trading

Finally, Revolut has launched a commission-free stock trading service across Europe, starting with a gradual rollout to a select number of its Metal card customers.

Once available, Revolut Metal card customers will be able to make up to 100 instant free trades in over 300 US listed stocks on the New York Stock Exchange and Nasdaq, supported by real-time price updates and market performance data. 

Rolling out to non-VIP customers in the coming weeks, standard users will be limited to three free trades per month, while Premium customers will be able to make eight free trades per month. Trades made outside of any monthly allowance will be charged at £1 per trade, and an annual custody fee of 0.01%.

Fractional share trading is also part of the package, opening up access to the stock market for an entirely new audience of illiquid investors.

“Investing in the stock market has been closed off to ordinary people for far too long, which has led to real problems for people as they search for effective ways to make the most out of their savings,” says Nik Storonsky, Founder & CEO of Revolut. “We’ve made sure that investing through Revolut is low cost, easy to use and available to everyone, even if they only want to try with very small amounts. This is only the beginning for our commission-free trading offering, as we’ll be rolling out access to different markets and investment products in the near future>”

Planned features include access to UK and European stocks, Exchange Traded Funds (ETFs) and the ability to invest via a Stocks and Shares ISA, he said.

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About: I am a business developer, sales professional, FinTech strategist, as well as Cryptocurrency and Blockchain enthusiast. I'm highly passionate about Financial Technology and Digital Innovation, and strongly believe that it will change the world for the better. Apart from my daily job at a global payments startup where I'm leading company's expansion into Europe , I'm an active member of FinTech community and a TechFin evangelist.

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