January 11, 2016
December 2015 was a surprisingly active time for FinTech startups as they raised over a billion dollars around the world. Continuing the momentum of activities around investments in FinTech, we looked at the deals sealed in the first week of 2016.
According to Financial Technology Partners, an investment bank focused on FinTech, the first week of 2016 counted 32 deals with 16 M&As and 16 funding deals. 16 companies that disclosed the sizes of the deals scored more than $330 million.
As always, the highest number of deals took place with FinTech companies operating in the payments sector (34%). The second place goes to companies in Financial BPO/Securities/Cap Mkts/Wealth Management (22%) and the third place is occupied by deals around Financial Management Solutions (13%) and FinHCIT (13%) - Healthcare Internet Technologies. Deals around Banking/Lending accounted for 12%.
50 companies ensured 31 deals, among which are Bessemer Venture Partners, Google Ventures, Sequoia Capital, Tiger Global Management, Blockchain Capital, KEC Ventures, RRE Ventures, Blackhawk Network, 500 Startups, Golden Gate Ventures, Accion Venture Lab, Wavemaker Partners, GE Ventures, Digital Currency Group and others.
Data source: FT Partners
One of the deals we paid attention to involved California-based blockchain platform provider Gem that closed a $7.1 million Series A funding round led by Pelion Venture Partners with participation from KEC Ventures, Blockchain Capital, Digital Currency Group, RRE Ventures and more. The company raised $10.4 million in total funding.
Another company that started 2016 by scoring funding is ZebPay. Ahmedabad-based mobile bitcoin startup Zebpay has reportedly raised $1 million in its Series A round. The new round was led by growth equity investor Arjun Handa, CMD & VP of Claris Life sciences, along with other investors including Amit Jindal, MD of Jindal Worldwide.
Blackhawk Network, a prepaid and payments network, also had a productive week announcing the acquisition of two gift card-focused platforms—GiftCards.com and OmniCard—for approximately $120 million. FT Partners served as the exclusive strategic and financial advisor to Omni Prepaid in this transaction. The purchase price will be funded with both cash and borrowings under an existing credit facility. The acquisition is consistent with Blackhawk’s growth strategy around its digital product expansion and is expected to be accretive to Blackhawk’s net income in fiscal 2016.
Friday 8th was a special day with breaking news on Peter Thiel, Paypal co-founder and first outside investor in Facebook, investing in Hamburg-based Deposit Solutions GmbH, an open architecture platform for retail deposits in Europe. The recent EUR 6.5 million funding round was led by FinLab AG, a German FinTech investor with participation from Peter Thiel, who backed Deposit Solutions with a million dollars, and other investors which include Stefan Wiskemann, Stefan Glänzer and Christoph Linkwitz.
2016 started well for an alternative lending provider, New York-based FinTech startup Bread, raising $14.3 million in the Series A round led by Bessemer Venture Partners, according to the Dow Jones news portal. RRE Ventures was also among the investors in the round to fuel part of the initial loans. Red Swan, Montage Ventures, Maveron, BoxGroup and others also invested in the company.
Groupama and Orange this week announced that they have entered into exclusive negotiations with a view to working in partnership to develop a new banking model that will allow Groupama to strengthen its online banking service and Orange to successfully diversify into banking services.
This negotiation will result in Orange acquiring 65% stake of Groupama Banque, enabling it to benefit from an existing operational infrastructure for the launch of Orange Bank.
Aside from M&As and fundings, the first week of 2016 was a notable one for other erasons as well, as Amazon made a bold move to compete against the UK’s high-street furniture and electrical retailers by introducing a new program for its UK shoppers. Its customers can now opt to take out a loan from Amazon for purchases worth £400 and more.
Interesting announcements don’t end there. This week Mitsubishi UFJ Financial Group Inc. (MUFG) was reported to set up a unit to research and develop new financial technologies, the first of its kind for the largestJapanese bank.
This week was also big for the gadgets world as the International Consumer Electronic Show (CES) being held in Las Vegas, unveiled some exciting news in FinTech. One of the interesting announcements came from Rokos. Rokos Core, a disk image for Raspberry Pis which can turn a computer into a full bitcoin node to allow users to hold a bitcoin wallet and mine, send & receive bitcoin over the network. Rokos has a full graphical user interface not requiring specialized knowledge or preparation for playing around with bitcoin.
MasterCard surprised the audience twice: the first time was with the announcement of Groceries by MasterCard, a new app that enables consumers to order groceries directly from Samsung’s new Family Hub refrigerator. The smart refrigerator will be available in the US in May this year; he second, an even more interesting announcement was about MasterCard’s debut in the wearables industry in partnership with Coin. The companies will bring MasterCard payments to a wide array of fitness bands, smart watches and other wearable devices. It will be interesting to see how this move by MasterCard will affect Apple Watch.
The first week of 2016 was rich on news, some of the most exciting of which we have been actively following. Follow the LTP team to read about other important news and insights in FinTech around the world.