While the downfall of Wirecard may the big story in the FinTech industry, it would be a mistake to not take a closer look at the investment rounds announced in the sector over the past seven days.
Wirecard’s collapse has for obvious reasons been a big talking point in the FinTech industry this week. Since the $2.1bn-shaped hole in the German payment processing company’s balance was first reported on, Wirecard has filed for insolvency, police have announced that they are investigating the business’ top brass for alledged fraud and several associated companies have been forced to suspend parts of their service that relied on Wirecard solutions, cutting their customers off from their money. No doubt the scandal will continue to make headlines for some time yet. Still, it’s important to remember that downfall of the German behemoth is not the only thin that happened in the sector in the last seven days.
As a reminder, we reported on 36 FinTech, RegTech, InsurTech and ProTech deals in the last week. That’s an increase from the week before when we only reported on 20 deals. So what do all these capital injections mean for the industry as a whole?
The last seven days have been huge for the InsurTech industry. Lemonade’s initial public offering (IPO) obviously dominated the news, both before it went public and after it soared more than 138% on its first day of trading on the New York Stock Exchange. This saw the InsurTech unicorn founded in 2016 reach a market cap of over $3bn.
However, it wasn’t the only big InsurTech news from the last week. Health insurance innovator Oscar also made quite a splash last week when it raised $225m in a new funding round. As we report further down, other InsurTechs like Aclaimant, Hi Marley, Just Auto Insurance, AgencyKPI and Layr have also been reported to raise rounds in the past seven days.
Now, the news about Lemonade’s public listing and the funding rounds from its industry peers comes at a time when many predict that the InsurTech segment is about to truly come into its own. The insurance industry has been famously slow to digitise their traditional infrastructure. However, there is an argument that the Covid-19 pandemic could shake the sector out of its comfort zone and start adopting new technologies. Lemonade’s IPO and the funds we recorded this last week could be signs that something big is about to happen in the InsurTech industry.
Another ongoing trend to note this week is the continued prevalence of cybersecurity deals. As we have reported in the past, cybersecurity companies are expected to be able to leverage the Covid-19 crisis to their advantage. So it’s unsurprising that we’ve seen companies like Area 1 Security, Cynet, Hunters and Intigriti secure additional funding over the past seven days.
The news about these rounds follows an ongoing trend of strong performances in the global CyberTech industry. The sector experienced tremendous growth between 2016 and 2019 as investors poured money into companies battling the increased threat of cyber attacks and data leak in financial services. Total funding grew at a compound annual growth rate of 91.6% from $666.1m to nearly $4.7bn at the end of last year, according to FinTech Global’s research. The first quarter of 2020 also saw a strong influx of capital into the cybersecurity sector, with $1.5bn being injected into the industry between January and March. Nevertheless, it is still too early to guess whether or not this trend will continue as the global pandemic is certain to affect investors’ desire to back companies.
With all that in mind, let’s take a closer look at the 36 rounds we reported on in the last seven days.
WEX closes $400m investment from private equity firm Warburg Pincus
Simplified payment systems builder WEX announced last week the closure of a $400m investment from private equity firm Warburg Pincus. The deal saw the FinTech fill up its war chest with a mixture of convertible notes worth $310m and $90m in common stock via a private placement.
The idea is that the capital injection will strengthen the company and keep it afloat throughout the coronavirus crisis. WEX has a goal of simplifying the payment systems for fleet, travel and healthcare companies. Its services are used in over ten countries and more than 20 currencies.
“We are pleased to further fortify our balance sheet during the current uncertain operating environment while reaffirming our relationship with Warburg Pincus, who has demonstrated their strong commitment to the future growth of WEX,” said Melissa Smith, chairman and CEO of WEX.
“The combination of this investment and the recent credit agreement amendment put us in an even stronger financial position with additional financial flexibility, improved liquidity and increased cash on hand. This better positions us to remain focused on our long-term strategic initiatives to drive our future success, and capitalise on the economic recovery when market conditions improve.”
Warburg Pincus has previously backed InsurTech BriteCore’s $47.5m growth equity round and has led cybersecurity company eSentire’s recent $47m raise.
Oscar closes funding round on $225m
InsurTech Oscar has closed a new funding round on $225m as it looks to continue its growth. The online health insurance platform’s new round was backed by existing investors, including Alphabet, General Catalyst, Khosla Ventures, Lakestar and Thrive Capital. There were also contributions from new investors, including Baillie Gifford and Coatue.
The news comes after the scaleup, founded in 2012, has expanded in the past year, having grown its services to 15 US states and 29 US markets. There are more than 420,000 members of the platform.
“Transforming the health insurance experience requires the creation of personalised, affordable experiences at scale,” said Mario Schlosser, CEO and co-founder of Oscar.
“At Oscar, we combine our full-stack technology platform and data-driven approach to deliver seamless care that meets members where they are. We have created an experience that feels like you have a doctor in the family. This funding enables us to further accelerate the development of our unique model while creating efficiencies and cost-savings.”
Axiata Digital bags $70m in funding
Axiata Digital, the digital service division of telecommunications conglomerate Axiata Group, has received $70m in funding to support the growth of its digital financial services. The capital infusion was supplied by Great Eastern, an insurance firm based in Singapore and Malaysia. Through the deal, Great Eastern has acquired a 21.87% stake in Axiata Digital.
solarisBank closes Series C round on €60m
Germany-based solarisBank AG has closed a €60m ($67.7m Series C round to fuel its global expansion plans and to grow its team. HV Holtzbrinck Ventures led the round. Vulcan Capital, Samsung Catalyst Fund and Storm Ventures also contributed to the round. solarisBank claims that around half of the capital raised in the Series C was from existing backers, including yabeo, BBVA, SBI Group, ABN AMRO Ventures, Global Brain, Hegus and Lakestar.
Derivative Path closes a $35m investment from FTV Capital
Derivative Path, a capital markets FinTech platform, has secured $35m in a growth equity funding, which was supplied by FTV Capital. This investment marks the first outside institutional round for Derivative Path, a cloud-based trading technology solution launched in 2013, and will be used to expand its product offerings and to accelerate its growth with financial institutions, end-users and buy-side clients.
Area 1 Security secures $25m funding round to support its R&D
Area 1 Security, a pre-emptive email security solution, has closed its growth equity round on $25m, with ForgePoint Capital leading the round. Previous Area 1 Security backers Kleiner Perkins, Icon Ventures and Top Tier Capital, also contributed to the round. With the capital injection, the company will increase its R&D efforts and expand its go-to-market resources.
Capital Markets Gateway closes a $25m strategic investment
Capital Markets Gateway (CMG), a platform modernising the equity capital markets has bagged a $25m strategic investment to secure the growth of the business and its expansion plans. The capital came from a selection of financial institutions including Barclays, Citi, Goldman Sachs, J.P. Morgan and Morgan Stanley, as well as Fidelity Investments. A number of existing CMG investors also contributed to the new round, including Canaccord Genuity, Franklin Templeton, StageDotO and Shea Ventures.
Curv secures $23m in its Series A round
Digital asset security infrastructure Curv has secured $23m for its Series A round, as it releases its new tX service. Commitments to the round came from CommerzVentures, Coinbase Ventures, Digital Currency Group, Team8 and Digital Garage Lab Fund. Capital from the round will be used to boost the company’s international expansion, build new solutions within tX and hire more staff.
Cynet closes its Series B+ on $18m coming two years after its initial B round
Cynet, an autonomous breach protection platform, has closed a Series B+ round on $18m led by BlueRed Partners. Other backers supporting the round included Deutsche Telekom, Merlin International, Norwest Venture Partners and Ibex Investors. As part of the investment Merlin International and Deutsche Telekom will also go to market with Cynet. This equity infusion has been earmarked to developer the next generation of its breach prevention platform, as well as expand its presence in the US and around the world.
Veriff closes $15.5m funding round as it prepares for a larger Series B round
RegTech startup Veriff closed its new funding round on $15.5m as it prepares as it looks to increase its growth and sales to enterprise customers before it raises a larger Series B round in the future. The identity verification startup capital was supplied by previous backers Y Combinator and Mosaic Ventures, as well as first time investors NordicNinja VC and Change Ventures.
Hunters collects $15m in Series A round
Tel Aviv-based cybersecurity company Hunters has bagged $15m in a Series A funding round from Microsoft’s M12 and U.S. Venture Partners. The round was also supported through the participation of previous investors YL Ventures and Blumberg Captial. New investor Okta Venture reportedly also backed the raise. Hunters has now raised a total of $20.4m in funding and plans to use the money to strengthen its go-to-market capabilities in the US and to expand its R&D team in Israel.
Auto repair loan startup DigniFi closes $14m Series A
DigniFi, a AI-powered platform which connects consumers with lenders for auto parts, repairs and services, has raised a $14m Series A led by BuildGroup. In addition to the round close, DigniFi has signed a deal with Neuberger Berman Private Equity to purchase over $275m of assets. With the burst of funding, the company will look to continue its expansion efforts
Ava Labs reportedly raises $12m in a token sale
Ava Labs, an open-source platform for launching decentralised applications, has reportedly raised $12m in a private token sale. Galaxy Digital, Bitmain, Initialized Capital, NGC Ventures and Dragonfly Capital all reportedly contributed to the digital asset sale. Several other unnamed backers also contributed to the round. The capital raised was for Ava Labs’ Avalanche platform, a platform enabling developers to create powerful, reliable and secure applications and custom blockchain networks.
Aclaimant bags $10m for its Series A round which was led by Mercury Fund
Aclaimant, which improves safety and risk management workflows, has secured $10m in its Series A, bringing its total equity raised to $13m. The company’s latest funding round was led by Mercury Fund and received additional support from Royal Street Ventures, EBSCO Capital, KEC Ventures, RRE Ventures and Aspen Capital Group.
Identity fraud fighting startup ubble raises €10m in seed round
French tech startup ubble has bagged €10m in seed capital and a partnership with Bpifrance, the investment bank. Partech and Breega were the investors participating in the raise. The money will be used to recruit more employees, especially for its sales and marketing teams, and to expand across Europe.
The Bpifrance partnership will see the later use ubble’s identity verification solution to ensure the validity of applications for cash support loans following the Covid-19 crisis.
Capital raises $9m in seed round led by AME Cloud Ventures
Fundraising FinTech Capital has closed a $9m seed funding round led by AME Cloud Ventures. The round also saw participation from Future Ventures, Greycroft, Wavemaker Partners and Partech as well as angel investors including Rentech and First Round Capital’s Howard Morgan and Stuart Roden, the former chairman of Lansdowne Partners.
ID.me raises up to $8.3m in a new funding round
User and employee verification platform ID.me has raised up to $8.3m in a new funding round, a filing with the US SEC shows. The RegTech company is looking to raise $12.5m in the funding round, but it is unclear whether this figure is a hardcap. So far, there have been 32 investors to contribute to the funding round.
PictureWealth closes $8.2m in late-seed round alongside acquisition of NEO Financial Solutions
Australia-based PictureWealth, which is boosting the financial education of consumers, has closed AUD $12m ($8.2m) in its late-seed round. The capital injection was made up of both private equity and debt. PictureWealth is a personal finance platform which aims to improve the money management of consumers. The platform will help the consumer understand their finances and show them how the future can look, as well as how they can improve their financial profile via savings and investing.
Insurance chatbot Hi Marley closes Series A1 on $8m
Insurance chatbot Hi Marley has closed its Series A1 round on $8m and will help it to increase customer engagement. The round, which brings Hi Marley’s total financing to $18.6m, was led by True Ventures and Underscore VC. Additional contributions came from Bain Capital Ventures and Greenspring Associates. With the close of the round, the company will increase the development of its messaging product and increasing engagement. Capital will also be used to hire more staff and increasing its portfolio of APIs and partnerships.
FraudScope bags $7m in its Series A as it looks to scale its team
FraudScope, an AI-powered solution capable of identifying fraud, has collected $7m in its Series A round. Contributions to the investment came from QED Investors, Brewer Lane Ventures and the GRA Venture Fund. Contributions also came from previous FraudScope backers Spider Capital, Mosley Ventures and TechSquare Labs.
ECXX Global raises $6m as Hatten Land buys over 18% stake in the business
Singaporean digital asset exchange ECXX Global has sold more than 18% of its shares to Hatten Land, the property developer, in a $6m deal. ECXX Global’s majority shareholder is CapitalX Global, which owns 72.67% of the company, Business Times reported.
InsurTech Just Auto Insurance bags $5.7m in funding round
California-based InsurTech Just Auto Insurance has announced the closure of a $5.7m round led by ManchesterStory. Other investments were made by Crosscut Ventures and Plug and Play as well as Just Auto Insurance’s CEO and founder Robert Smithson.
AgencyKPI secures $5m in its Series A backed by US-based insurance firms
InsurTech AgencyKPI has scored $5m in its Series A round. The investment was led by EMC Insurance Companies, a US-based property and casualty insurance firm. Contributions also came from insurance agency networks Keystone Insurers Group and Combined Agents of America. The equity boost will be used to hire more software developers and data scientists to help increase the development of its business intelligence.
Short-term loan app FinFrog said to raise €5m in its new funding round
France-based FinFrog has reportedly raised €5m in its latest funding round, which will be put towards research and development efforts. RAISE Ventures, a venture capital firm dedicated to French and European startups, led the capital injection, according to a report from EU-startups.
Layr scores $5m in its seed round as it looks to enhance its AI capabilities
Layr, which helps small businesses customise commercial insurance bundles, has bagged $5m for its seed round. Sandbox Insurtech Ventures led the investment, with contributions also coming from previous Layr backer Lloyd’s of London. Contributions to the seed round also came from Flyover Capital and Maschmeyer Group Ventures, marking their first investment into the InsurTech. In tandem with the deal, Sandbox Insurtech Ventures managing director Chris Zock and Flyover Capital general partner Keith Molzer will join the Layr board of directors.
Australian business bank Zeller raises $4.3m ahead of 2021 launch
New alternative business banking platform Zeller has reportedly raised AUD $6.3m ($4.3m) in a funding round as it aims for a 2021 launch. The investment was led by Australian venture firm Square Peg Capital, according to a report from The Sydney Morning Herald. Additional support to the round came from Apex Capital and Athena. Capital from this round will be used to help Zeller develop its products, which include payments and financing tools, and prepare for its launch into market next year.
Intigriti nets €4.14m in its Series A round led by ETF Partners
Crowdsourced cybersecurity platform Intigriti has closed its Series A round on €4.14m. ETF Partners, a European venture capital firm, led the investment and the firm’s partner Remy de Tonnac has joined the Intigriti board of directors. The capital injection will be used to enhance the company’s platform and solidify its position in the European and international markets. It will also develop specific programmes for companies delivering sustainable solutions.
Worky bags $3m in new round
HR and payroll platform Worky has collected $3m in its seed round which was led by QED Investors. Contributions also came from previous Worky backer LEAP Global Partners. As part of the investment, QED Investors partner Lauren Connolley Morton and LEAP Global Partners venture partner Leticia Jauregui will join the Worky board of directors. With the seed capital, the FinTech is looking to enhance its technology and scale its operations.
Willa collects $3m in a seed round to make it easier for freelancers
Willa has raised $3m in funding to make it easier for freelancers to arrange for payments and to get control of their finances. Particularly, the Sweden and US-based FinTech company will use the new capital injection to launch its Willa Pay app, which is set up to slash the paperwork freelancers will have to go through, TechCrunch reported.
Neo.tax reportedly raises $3m in its seed round to help more companies access tax breaks
Neo.tax, a R&D tax credit app, has reportedly raised $3m in its seed round to help its goal of making R&D tax credits used by more US startups. The capital round was supplied by Uncork Capital partner Andy McLoughlin, Floodgate partner Mike Maples, Jr, Liquid 2 Ventures general partner Michael Ma and Lux Capital partner Deena Shaki.
Velox said to raise $2.5m in its new funding round
Velox, which claims to be the future of front-office technology, has reportedly bagged $2.5m in its new funding round. The investment was supplied by ETFS Capital and will be used to support the FinTech’s growth plans, according to a report from mondovisione. Velox is hoping to improve the development of its core platform, increase its distribution and grow its customers in the UK and US.
Crowdfunding platform for startups Envestors raises £2m in funding
Envestors, a platform connecting investors and companies, has found its own backers to support its £2m financing round. The capital injection was supplied by strategic partner SidebySide EIS Fund. With the fresh equity, the company will look to increase the reach of its product and reach more parts of the investment cycle.
PropTech platform Canopy pulls in £2m within 48 hours for its new funding round
Renters app Canopy has reportedly collected £2m in a funding round, which it was able to raise within just 48 hours. West Hill Capital led the investment and brings Canopy’s total seed funding to £10m, according to UKTN. This equity infusion will be used to support the formation of new partnerships with letting agents and increasing its product suite, the article states.
Ternio nets $1m in a crowdfunding campaign held on Replublic.co
Ternio, which creates a banking application software for digital assets, has closed its first crowdfunding campaign on $1m. The capital raise, which was hosted on the Replublic.co, was backed by 3,890 investor. A valuation cap was set at $15m and a minimum investment contribution was established as £100. Ternio utilises blockchain infrastructure to give real-world utility to digital assets to connect traditional enterprise, FinTech and banking. Its white-label products leverage instant remittance and the benefits of operation on blockchain rails.
Canaree bags £500,000 investment
Canaree, a software platform allowing early stage businesses to understand and improve their future finances, has received £500,000 from the UK government’s £500m Future Fund. Ventures can tap into the fund by getting investments in the form of convertible loan notes worth up to £5m.
NGRAVE said to raise over €320,000 in crowdfunding
Cryptocurrency digital wallet NGRAVE has reportedly collected more than €320,000 in funding on crowdfunding platform Indiegogo. In addition to raising funds, the company has been working with research and development firms and innovation hubs to create nanotechnology solutions.
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