In an age where the traditional form of in-person payments is being restricted due to Covid-19 restrictions, the rise of PayTech seems almost inevitable. With more people than ever now using payment technologies, the demand for funding is also climbing.
PayTech is currently experiencing a boom in popularity since people began to take their financial matters online en-masse. Buy now, pay later (BNPL), point-of-sale systems and mobile payments have all seen huge hikes in demand over the last year, with 52% of deals larger than $10m in value in the first half of 2021, up from 43% in 2020 and 48% in 2019.
This demand is translating in funding for PayTech companies rising to new heights. Who are the key players that are driving this demand? Here are some of the biggest PayTech deals from last year.
Paysafe – $2bn
The largest PayTech funding haul of the year went to London-based Paysafe, who raised $2bn from a post-IPO equity round in March. Paysafe is a mobile payment provider that offers services such as a digital wallet, an online payment and money transfer service and a prepaid card service called Paysafecard.
The post-IPO funding round – concluded in the first quarter of 2021 – included eight different institutional investors. Paysafe used some of the new capital to acquire Peruvian payments firm PagoEfectivo.
Affirm – $1.4bn
US BNPL company Affirm raked in the second highest funding round for PayTechs in 2021, with the business securing $1.4bn from a post-IPO equity round headed by SV Angel and GGV Capital in January. The company used some of this funding for M&A activity – including the acquisition of Returnly – a firm that streamlines the returns and post-purchase payment processes for e-commerce businesses.
Back in January 2021, Affirm began trading on the Nasdaq and saw its shares jump by more than 100% in the first day.
Klarna – $1bn
Swedish BNPL giant Klarna also got in on the funding last year and reeled in a huge $1bn in March. The round – which was four-times oversubscribed – made Klarna become the highest-valued private FinTech in Europe.
The company highlighted that it would use the newly raised capital to speed up its international expansion and increase its market reach. Klarna will also pledge 1% of the capital raised to a new initiative focused on key sustainability issues around the world.
SumUp – $892m
UK-based global payments service provider SumUp scored a $892m debt facility in March 2021 to help support its acquisition plans.
The round was backed by big hitters in the industry such as Goldman Sachs, Bain Capital and Oaktree Capital Management. The injection of funding was earmarked for growth efforts in the company, including acquiring and support existing merchants as well as bolster M&A efforts and refinance its existing debt facilities.
GoodLeap – $800m
GoodLeap – a US digital marketplace for sustainable solutions – raked in $800m in funding in October, raising its valuation to $12bn. GoodLeap claims it is the US’ number one point-of-sale platform for sustainable home solutions.
The round was headed by MSD Partners and saw participation from BDT Capital Partners and Davidson Kempner Capital Management
Mollie – $794m
Dutch online payments processor Mollie was also benefactor of increased PayTech funding in 2021, scoring $794m in a venture funding round. Following this round, Mollie became the third-largest FinTech unicorn in Europe, securing a valuation of $6.5bn.
The round was headed by Blackstone Growth and saw investment from EQT Growth, HMI Capital, Alkeon Capital and General Capital. Mollie claimed the funding will be used for international expansion, team scaling and continued product and engineering investment.
Klarna – $639m
Arriving on the top ten list for the second time this year, Swedish firm Klarna pulled in a second eye-watering investment when it bagged more than $639m in a private fundraising round. The round – headed by Japan’s SoftBank – helped to boost the company’s valuation to almost $46bn.
The company revealed at the time that the cash influx would help the firm continue to expand globally and to develop new products.
Stripe – $600m
BNPL behemoth Stripe also found itself on the top ten list this year, scoring $600m in a funding round that valued the company afterwards at $95bn – nearly tripling from $36bn from April 2020.
Following this round, Stripe became the second most valuable private FinTech company globally behind Ant Financial, which currently rules the roost at $150bn. The Stripe round was backed by investors such as Allianz SE, AXA SA, Sequoia Capital and Baillie Gifford amongst others.
Pine Labs – $600m
FinTech unicorn Pine Labs was also a big raiser this year, after it closed an investment round of $600m led by Fidelity Management & Research Company and BlackRock Inc.
With the fund raise, the company claims it is looking to list in the US markets within the next 18 months from when it raised the capital. The firm added that it wants to become the first FinTech from India to list offshore.
Other key investors in the round included Tree Line, Kotak, a fund advised by Neuberger Berman Investment Advisers and IIFL AMC.
Moon Pay – $555m
Rounding off the top ten PayTech deals is MoonPay – a business that builds payment infrastructure for cryptocurrencies – which raised $555m from a a Series A financing raise.
The funding round was headed by Tiger Global Management and Coatue and also saw participation from Blossom Capita, NEA, Paradigm and Thrive Capital. This capital raise brought the company’s valuation to $3.4bn.
MoonPay claimed the funding would be used to continue its growth, speed up international expansion and broaden its team, as well as bringing it ‘significantly closer’ to achieving its goal of giving the next billion people access to cryptocurrency by 2030.
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