With Trade Republic netting $900m and four startups earning the horn among 46 rounds, last week proved to be a great week in terms of FinTech investment, particularly for stock trading apps enterprises.
While companies operating in the cybersecurity, RegTech, anti-fraud, credit and loan segments of the FinTech industry raised significant funding over the past seven days, investment platforms and business infrastructure and software providers were the segments to stand out most.
Before we get into all the different funding rounds from last week, let’s talk a bit about how Trade Republic reeled in all the limelight after its massive $900m round.
Share trading app Trade Republic grabbed the headlines for a number of reasons. Firstly, it raised a whopping $900m funding round last week in its Series C round of funding led by Sequoia Capital, taking its valuation to $5bn. Along with Sequoia, the round also saw investment from new investors including TCV, which has invested into consumer brands like Netflix, Spotify and Peloton as well as by Thrive Capital, investor in Nubank and Oscar Health. Not only will the influx of fresh capital enable the WealthTech unicorn to continue to grow, but it is also a testament to the trust investors put into the stock-trading app.
In addition to commission-free investing into equities, Trade Republic recently included cryptocurrencies such as Bitcoin, Ethereum, Litecoin and Bitcoin Cash enabling users to adjust their portfolio to reflect inflation and negative interest rates.
It’s important to note that the financial backing comes after stock trading apps witnessed much popularity following the chaos surrounding GameStop.
The trading turmoil began after amateur investors who were members of the WallStreetBets subreddit bet on GameStop causing short sellers to buy the stock before the price gets too high to minimise future losses. Their actions went against the bets made by several institutional investors and hedge funds. Hedge funds reportedly lost approximately $19bn after they were forced to buy back shares at a higher price.
The surge in trading made the GameStop stock value climb from just over $17 at the start of January to $347.51 at the trading chaos’ peak after which it was trading at $63.77.
The increase of amateur investors betting on GameStop put companies such as Robinhood – a Trade Republic rival – in the crosshairs of lawmakers after it restricted its users’ ability to trade in GameStop and other company securities associated with WallStreetsBets. The restrictions caused a backlash from politicians on both sides of the Congress aisle, with Alexandria Ocasio-Cortez and Ted Cruz calling for an inquiry into Robinhood’s actions.
The chaos also put the spotlight on one of the key problems of commission-free trading apps like Robinhood and Trade Republic as people were betting on things without having the proper knowledge.
However, this didn’t stop the sector from scaling up. Stock trading has continued to exacerbate after the Covid-19 pandemic as neobrokers such as BUX, eToro, Public.com, Bitpanda and Robinhood have all gone from strength to strength with Robinhood adding $3.4bn to its coffers despite the decacorn firm being in the middle of the battle between small traders and Wall Street. Furthermore, the stock brokerages industry has grown by leaps over the five years to 2021, with revenue expected to increase at an annualised rate of 9.9% to $14bn, with an increase of 5.9% in 2021 alone.
Other companies in the sector which scored investment last week included Pickright Technologies, Rally, Vise and Stake.
Over to the second biggest funding round we reported last week, the new unicorn DailyPay hauled in $500m – that included a $175 million Series D round, led by Carrick Capital Partners, and $325 million in credit capital – to scale its on-demand payment solution.
The FinTech aims to ensure money is always in the right place at the right time for employers, merchants and financial institutions, it said. Earlier this year, DailyPay rolled out ExtendPX geared for payroll service providers and HR managers. It also launched a program called Cycle to aid professionals with payments outside their usual schedule. DailyPay enabled customers to receive payment immediately rather than waiting on a usual two-week pay cycle with that product.
The company’s growth was backed by new research by the New Mercator Advisory Group which surveyed over a million employees spanning multiple industries. It said that companies leveraging DailyPay were better suited to tackle labour challenges with companies reporting the average tenure improving by as much as 73% for workers.
DailyPay is hardly alone in the business infrastructure and software sector to nab a massive round. The third largest round last week was bagged by cloud-based business and IT process automation solutions provider Redwood Technologies in a €315m round. This is hardly surprising as the global business software and services market size – valued at $389.86bn in 2020 – is expected to expand at a CAGR of 11.3% from 2021 to 2028.
Other startups in the sector to bank millions include newly turned unicorn Amount, Omnio and Pento.
The InsurTech sector too continued to rake in millions where Wrisk, Jerry, Intelligent AI, Super and Waffle were all companies whose cash injections FinTech Global reported on last week.
The global InsurTech industry is expected to be worth $16.8bn by 2025 months after the sector enjoyed its best year yet. Despite the pandemic, the InsurTech segment of the FinTech sector raised $6.2bn across 323 deals last year, according to FinTech Global’s research. That’s up from the $1.7bn raised across 190 deals in 2016.
These rounds come after about a year after industry stakeholders argued that the Covid-19 crisis could trigger tremendous market growth for the InsurTech sector as more insurers would be forced to digitalise their offering – something the industry has been dragging its feet in, compared to other sectors.
The deals from the past seven days as well as the impressive growth of the market in the past 12 months may have proven them right.
And now, let’s look at the different rounds raised last week in more detail.
Trade Republic’s colossal $900m round
Berlin-based Trade Republic, a mobile-only and commission-free broker for investment, raised $900m in its Series C round of funding led by Sequoia Capital. This investment marks one of Sequoia’s largest initial investments ever in Europe.
The current round values Trade Republic at more than $5bn making it one of Germany’s biggest fintech firms by valuation. The company offers an ETF or fractional stock savings plan and aims to help users invest money into capital markets with an easy-to-use and commission-free offering. By doing so, the company believes it is giving an opportunity to many people who have missed out on participating in economic growth in the past.
DailyPay nets $500m
On-demand pay solutions for enterprises Daily Pay secured $500m in raised capital following a $175m Series D and $325m credit capital raise.
The Series D round was led by Carrick Capital Partners as well as participation from unnamed existing investors. The credit capital raise was raised from various undisclosed sources. The New York-headquartered firm provides employees with real-time access to their wages whenever they need them.
Redwood lands €315m
Redwood Software raised a €315m strategic investment from growth equity firm Turn/River Capital. This investment will enable Redwood to accelerate new feature development for its IT and business process automation platform.
Redwood aims to provide its clients with automation tools to meet all the needs of the modern enterprise. Statista estimated that the global automation industry will generate $214bn in 2021 with process automation exceeding $83bn making it a ripe sector for innovation.
Launched in 1993, Netherlands-based Redwood Software serves thousands of global enterprise customers, including Coca-Cola, GM, Halliburton, Grainger, Wells Fargo, UBS, Mercedes-Benz, Airbus, Siemens, and Heineken.
Pine Labs reels in $285m
Singapore-based merchant commerce platform Pine Labs completed a first close of $285m funding.
Backers included Baron Capital Group, Duro Capital, Marshall Wace, Moore Strategic Ventures and Ward Ferry Management and existing investors Temasek, Lone Pine Capital and Sunley House Capital. The company intends to use the funds to further scale its merchant commerce and online payments product stack.
Extend earns the horn after $260m round
San Francisco-based tech startup that makes it easier for businesses to offer product warranties Extend raised $260m in a funding round led by SoftBank Group Corp’s Vision Fund 2 that valued the company at over $1bn.
The funding round also includes participation from existing investors Meritech Capital Partners, PayPal Ventures and GreatPoint Ventures, and welcomes new investors Nationwide, Tomales Bay Capital, Launchpad Capital, 10X Capital and 40North. The oversubscribed round brings Extend’s total funding to more than $315m. The API-first company allows merchants to easily offer extended warranties and protection plans.
Pipe forays into unicorn club with $250m round
Pipe, a startup that lets companies sell their recurring revenue streams on its platform, raised $250m at a valuation of $2bn. The latest funding round was led by venture capital firm Greenspring Associates.
The company intends to use the funds to bolster its platform globally, expand its offering across every recurring revenue vertical including property management companies, direct to consumer subscription, telecommunications, sports and entertainment, biotech, healthcare, and VC fund management fees. By treating recurring revenue streams as an asset, the platform allows companies to transform their recurring revenue into upfront capital, instantly.
Figure collects $200m
Blockchain firm Figure closed a $200m Series D funding round at a $3.2bn valuation.
10T Holdings and Morgan Creek Digital are co-leading the round and joined by new and existing investors including DCM, Digital Currency Group, HCM Capital, Ribbit Capital, RPM Ventures, the partners at DST Global and others.
Figure uses Provenance, a public, open-source, permissionless, decentralised blockchain, for its digital asset marketplaces including home lending, capital table management, fund management and administration, banking and payments.
Sunbit enters billion-dollar club with $130m round
Los Angeles-based provider of buy now, pay later (BNPL) technology solutions Sinbit raised $130m in Series D funding.
The round was led by returning investor Group 11, with participation from returning investor Zeev Ventures, and new investors Migdal Insurance, Harel Group, AltaIR Capital, and More Investment House.
The company intends to use the funds to expand its merchant presence. The BNPL technology player offers access to payment options to people everywhere. The technology is offered in-store and online at 7,300 locations.
RegTech Ideagen scores £100m
Santander UK and NatWest backed UK-based software management solutions company Ideagen with a funding package worth up to £100m to support its growth strategy.
The package comprises a three-year revolving credit facility split evenly across the two banks. £75m of the package is committed and there is scope for a further uncommitted £25m to support future growth.
As part of its targeted acquisition strategy, Ideagen – which provides quality, audit and risk software to organisations operating in highly regulated industries – has acquired 21 companies in the UK and overseas in the past decade and its next phase of growth will involve moving into additional new markets through further acquisitions.
Amount becomes unicorn with $99m round
Tech provider for banks and financial institutions Amount raised $99m in a Series D funding round at a valuation of just over $1bn.
WestCap, a growth equity firm founded by ex-Airbnb and Blackstone CFO Laurence Tosi, led the round. Hanaco Ventures, Goldman Sachs, Invus Opportunities and Barclays Principal Investments also participated. The investment comes just over five months after Amount raised $86m in a Series C round led by Goldman Sachs Growth at a valuation of $686m.
The funding will help Amount’s mission is to help financial institutions “go digital in months — not years”.
Uncapped snags $80m
UK-based provider of a platform for online companies to fund their growth and inventory costs Uncapped raised $80m in funding.
The round, which brought the total capital raised to date to $120m, was led by Lakestar, with participation from existing investors which include Mouro Capital, Global Founders Capital, White Star Capital, Seedcamp and All Iron Ventures.
The company intends to use the funds to expand its business reach with a host of new products and services due to launch in the near future, to increase its headcount from 35 to 100 people by the end of the year, with a particular focus on engineering and product roles.
Rally reels in $80m
NYC-based platform that allows retail investors to invest in collectable assets Rally raised $30m in Series B funding.
The round was led by Accel, with participation from existing investors Upfront Ventures, Social Leverage and others. Additionally, Rally has secured a $50m debt facility from Upper90 Capital. The company will use the funds to accelerate expansion into new categories including cash-flow producing assets like intellectual property, royalties, real estate and more.
ComplyAdvantage extends Series C to $70m
The data technology company transforming financial crime detection ComplyAdvantage bagged new investment by the Growth Equity team in Goldman Sachs Asset Management.
The investment is an extension to the company’s oversubscribed Series C funding in July 2020. ComplyAdvantage will use this new investment to build on the rapid growth it has experienced to date and cement its position as a critical part of the value chain for companies managing evolving risks around anti-money laundering, know your customer processes and broader financial crime.
Visa collects $65m
New York-based investment management platform for advisors Vise raised $65m in a Series C funding round.
The funding round was led by Ribbit Capital with participation from the company’s existing investors including Sequoia Capital. Vise has raised a total of more than $125m since 2016. Its platform leverages AI technology for its investment management platform to facilitate financial advisors.
Thunes nabs $60m
Singapore-based company that connects payment players in more than 100 countries Thunes raised $60m in Series B growth funding.
The round, which brings total funding to $130m, with $120 million in the last six months, was led by Insight Partners, with participation from existing shareholders.
In just four years, Thunes, which is regulated by the Monetary Authority of Singapore and the Financial Conduct Authority in the UK, has gone from strength to strength in the cross-border payments landscape.
Leif lands $60m
New York-based company specialising in technology dedicated to increasing access to education Leif raised $60m in funding led by LL Funds and Insita Group.
Leif is a technology company that has developed an end-to-end platform that enables the design, origination, and program management of Income Share Agreement and other outcomes-based tuition finance programs. The company partners with schools to provide students with an outcomes-aligned form of education finance.
Altruist gets $50m
The all-in-one platform for modern financial advisors raised $50m in Series B funding to make personalised financial advice less expensive, more efficient and more inclusive. The round was led by global venture capital and private equity firm Insight Partners, with follow-on participation from Series A investor Venrock, as well as Vanguard.
Altruist serves Registered Investment Advisors with an integrated digital platform that allows them to open accounts, invest, build models, report and bill, all in one place. Automations across the platform save advisors time by eliminating mundane operational tasks.
InsurTech Super hauls in $50m
InsurTech Super, which provides subscription-based care for the home, finished a Series C round with $50m, bringing its total funding to $80m.
The round was led by Wells Fargo and other new investors like Asahi Kasei, AAA, Gaingels and REACH, a technology scale-up program created by Second Century Ventures.
The company plans to use the money to expand in the market and hire more employees. It also plans to add to its service offerings, with more artificial intelligence (AI) capabilities added for better customer experience. Super is working on home warranty innovations, capturing more data on the home, service provider and on homeowners.
Card issuer Lithic wins $43m
New York-based card issuing platform provider Lithic raised $43m in Series B funding.
The round was led by Bessemer Venture Partners with participation from Index Ventures, Tusk Venture Partners, Rainfall Ventures, Teamworthy Ventures and Walkabout Ventures.
The company, which has raised a total of $61m to date, intends to use the funds to expand the tools and technologies to issue and manage virtual cards, including enhancements for Privacy.com to continue serving its security-conscious customers.
ProducePay adds $43m to its account
CA-based financing, analytics, and marketplace startup focused on the global fresh produce market ProducePay raised $43m in Series C funding.
The round, which brought brings total equity and debt funding raised to date to over $300m, was led by G2VP and co-led by International Finance Corp. and IDB Invest. Other participants in the round included current investors Anterra Capital and Coventure and new investors Astanor Ventures, IGNIA and Finistere.
The company will use the new capital to invest in technology development and infrastructure, grow its direct sales team and further expand throughout Latin America.
ThetaRay raises $31m to weed out fraud from money transfers
Software provider that mimics human intuitive decision-making to detect financial fraud ThetaRay raised $31m in a funding round. The funding round was led by Jerusalem-based JVP and Benhamou Global Ventures, which were joined by the Saints fund, and existing investors OurCrowd, Bank Hapoalim Ltd. and California-based fund SBT.
The firm’s solution enables global banks, financial institutions and businesses to simplify the volume of international money transfers, speeding up the completion of transactions without fear of them being used for money laundering, terrorist financing, human trafficking and drug trafficking. The solution is based on advanced machine learning that can detect signs of money laundering before it is performed.
ThreatLocker locks in $20m
Maitland-based cybersecurity firm ThreatLocker Inc. raised $20m in a Series B funding round that brings the total capital raised by the company to $24.5m.
Founded in 2017, the company offers enterprise-level cybersecurity tools aimed at securing both servers and endpoints. By implementing a zero-trust policy, ThreatLocker aims to prevent unauthorized software intrusions.
ThreatLocker claims its application whitelisting, storage control and privileged access management solutions can prevent remote access attacks, malware, data theft and internal IT disputes.
StudentFinance raises £3.7m to grow in the UK
Madrid-based StudentFinance which connects education with employment via Income Share Agreements (ISAs), raised $5.3m in seed funding.
The investment round was led by Giant Ventures and Armilar Venture Partners. Existing investors Mustard Seed Maze and Seedcamp, along with Sabadell Venture Capital and a host of angel investors.
The funding will be used to expand into the UK and other European markets. The firm also plans to reach €500m of ISAs.
CoinBurp gobbles up $2m
cryptocurrency platform CoinBurp closed an initial seed and private rounds of funding, co-led by both Moonrock Capital and Alphabit Capital – with more than $2m secured and oversubscribed by over 1000%.
With the aim to become the Coinbase for NFTs, CoinBurk has long-term experience as a cryptocurrency trading platform and has now moved with the market and started building within the decentralized and NFT space. The post-funding milestones are gearing up to launch the $BURP utility and governance token.
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