Let’s start the week with the tech news overview, catching you up on some of the key tech stories from the past week. It has for sure been a good week for Monzo, as the company closes its latest funding round and reaches $4,5 billion valuations. Not quite a good week for the mobile payments app developed by Irish banks that is now under formal investigation by the Competition and Consumer Protection Commission. Meanwhile, a P2P lending platform is switching to a different sector; Israeli AI-powered fintech is quadrupling its valuation, Visa launches a crypto advisory service, Paymentology and Tutuka merge as they try to create a payments powerhouse, Gibraltar integrates blockchain into its legacy services, EU creates a blueprint for Quantum Network Architecture, Aussie biotech develops needleless vaccines, and Eli Lilly invests heavily in Chinese biotech as it tries to come up with novel therapies for metabolic disorders.
The challenger bank Monzo has just closed its latest funding round, raising over $500 million. This puts the fintech at roughly a $4.5 billion valuations. The latest funding round was led by Abu Dhabi Growth Fund. Coatue and Alpha Wave Ventures, Accel, and Goodwater also participated in the round. The investment is not surprising, Monzo has managed to double its revenue this year, with around 100 thousand new customers each month. Moreover, about a quarter of the company’s current revenue comes from the products that were launched since the pandemic started.
TS Anil, CEO at Monzo, said: “This round comes off the back of a fantastic year for Monzo. We’ve seen record revenues, launched new products and tools, and continued to top the charts for our services. We’ve hired some incredible talent.”
“This investment means we’ll grow further and faster as we continue on our journey to reinvent banking and become the one app that sits at the center of our customers’ financial lives,” he added.
Irish banks have decided to launch a payments app in order to compete with the booming fintech sector. However, it now looks like they are facing issues as the Competition and Consumer Protection Commission (CCPC) is launching an investigation into the app.
Yippay, as the payments app is called, was developed by a joint venture between AIB, Bank of Ireland, KBC Ireland, and Permanent TSB. Almost €6 million has been raised to fund the development of the app, according to the Companies Registration Office filing from November.
The first submission to the CCPC was unsuccessfully made in January and shortly after rejected due to the lack of detail. The second submission happened around April and is now pending regulatory approval, with the planned launch in early 2022. However, the subject of the launch may have to be pushed forward due to the investigation by the CCPC that just started.
“Following an extended preliminary investigation, the CCPC has determined that a full investigation is required in order to establish if the proposed transaction could lead to a substantial lessening of competition in the State,” stated the authority.
Zopa is among the P2P lending pioneers and it may come as a surprise to many that the company has decided to concentrate on its new banking operation. Zopa chief Jaidev Janardana has released a blog post in which he states, “Due to our prudent, data-led approach to lending, we have delivered positive returns to our investors for 16 consecutive years – including throughout two financial crises. Since launching our platform, the average return has been 5%. Even during the Coronavirus pandemic and the subsequent lockdowns we were still able to deliver an average return of 3.9%.However, over the last few years, customer trust in P2P investing has been damaged by a small number of businesses whose approach led to material losses for retail investors.”
“Linked to this, the changing regulation which followed raised the operational costs of running a P2P business, as well as the cost of attracting new investors to the Zopa platform. To offset these increased costs and ensure we have a sustainable and profitable business, we’d need to reduce investor returns to a point where they’d no longer be attractive and commensurate with the risk that investors take on,” he followed.
The digital bank has shown signs of early success, raising £220 million in a funding round back in October. So far, it has gathered £675m in deposits, issued more than 150,000 credit cards and it looks like near-term profitability is within its reach.
Tipalti, the AI-powered commercial payments unicorn based in Israel has just completed its Series F funding. The valuation of the company now stands at $8.3 billion, meaning it has quadrupled since October of last year.
“I think the market has a proper appreciation for the size of the market opportunity we’re facing,” CEO and co-founder Chen Amit said. “Our multiples over the last 12 months have increased because of that new appreciation.”
The funding was led by G Squared and included participation from several new investors such as UK hedge fund Marshall Wace and 01 Advisors. The round closed at a $270 million investment and according to Amit, “This latest investment will enable Tipalti to add more to our product lines and capabilities in the next 18 months than we have over the past 10 years combined.”
“We are on a journey to transform financial operations, relieve finance leaders from those mundane, cumbersome, risky tasks, and elevate the financial capabilities for high-velocity organizations to rival those of the Fortune 5000,” he added.
“We are delighted to extend our support of Tipalti, which we believe provides a best-in-class solution for a massive greenfield segment looking to transform payables processes through automation. Tipalti’s platform works to provide its clients with extraordinary savings and productivity gains, thereby creating operating leverage to support growth. The company’s customer acquisition and retention rates are among the best we’ve seen, and we are confident its strong management team will continue to build on Tipalti’s success,” said Larry Aschebrook, Founder & Managing Partner, G Squared.
Visa decided to open a crypto advisory service through which they could support their clients as they enter the crypto sector. As crypto is no longer a niche and significantly more people expect their banks and financial institutions to support and offer cryptocurrencies, we can see not only fintechs but the traditional payment institutions open their doors to crypto.
“We’ve seen a material shift in our clients’ mindset in the last year, from a desire to explore and experiment with crypto, to actually building a strategy and product roadmap,” says Carl Rutstein, global head, Visa consulting and analytics.
Terry Angelos, SVP, global head of fintech at Visa, says: “As consumers change their approach to investing, where they bank, and their views on the future of money, every financial institution will need a crypto strategy.”
Paymentology and Tutuka are planning to merge and create what could be the next payments powerhouse. In a newly-merged entity that will most likely run under Paymentology’s name, financial institutions and fintechs will be able to process cards that are associated with Visa, Mastercard, or UnionPay. As Paymentology will be able to leverage the global reach of Tutuka and add it to its multi-cloud platform, the company will be able to serve both developed and emerging markets both and process more than $10 billion worth of transactions annually.
Rowan Brewer, CEO at Paymentology, said: “Banks and fintechs are racing to provide customers with digital and data-driven features. They are highly receptive to working with a single issuer-processor that can provide that, across the globe.
“People want to be able to pay with a virtual card – sometimes online, sometimes tapping their phone – but everything, digitally. Banks, digital banks, and fintechs need support and expertise to help them issue cards and process payments,” he added.
The government of Gilbraltar will integrate blockchain into its legacy systems in order to simplify the current government processes. The first step will be a pilot that will assess how the use of blockchain can improve the functioning of public services. In order to implement it, the government of Gibraltar has worked mostly with a Gibraltar cryptocurrency platform Bitso and IOVIlabs that stands behind the RSK blockchain.
Gibraltar’s Minister for Digital and Financial Services, the Hon Albert Isola MP, said: “Gibraltar has successfully positioned itself as a forward-thinking jurisdiction for innovative businesses developing and offering blockchain-related solutions. The implementation of blockchain technology into our processes in partnership with our stakeholders working here will further improve the way in which our community interacts with the government.”
“We have already begun the process of digitizing many of our services through the introduction of the eGov system earlier this year. I am confident that the RSK Blockchain will serve as a solid foundation on which to build the intended program of services in a coordinated and phased manner further complimenting the work already undertaken,” he added.
A consortium including companies such as Deutsche Telekom, Telefonica, Thales, and the Austrian Institute of Technology (AIT) revealed it has a blueprint for a quantum network architecture that will secure EU’s crucial telecom infrastructure. Since April of this year, the consortium has been working on exploring quantum security and during the QSAFE (quantum network system architecture for Europe) earlier this month, the initial results of its research have been delivered, laying the groundwork for European quantum communication infrastructure (EuroQCI).
“The study will serve the European Commission as a basis for the next steps on the journey to establishing a European quantum communication infrastructure,” said Deutsche Telekom, in a statement. “All aspects – costs, security, technology, network dimensioning, planning, operational model, etc. – are included in the study.”
Quantum Security spending is expected to reach $3.5 billion annually in the next three years, and reach up to $30 billion annually by 2030. EU does not plan to wait until 2030 and it wants to have the EUROQCI up and running by 2027, involving both a terrestrial and satellite component.
“The EuroQCI will safeguard sensitive data and critical infrastructures by integrating quantum-based systems into existing communication infrastructures, providing an additional security layer based on quantum physics. It will reinforce the protection of Europe’s governmental institutions, their data centers, hospitals, energy grids, and more, becoming one of the main pillars of the EU’s new Cybersecurity Strategy for the coming decades,” the European Commission claims.
Vaxxas, Queensland-based biotech is developing a needle-free vaccine that could be a perfect solution for those who struggle with needle phobia as the booster shots are approaching. Moreover, Vaxxas chief operations officer Angus Forster claims it is not only those who are afraid of jabs but the underdeveloped countries and remote communities that will be hugely benefited by the simple application of the dosage. The would-be administered through a “high-density micro-array patch” applied to the skin for 10 seconds at a depth of a quarter of a millimeter.
“Our clinical research shows this elicits a more efficient and effective immune response than traditional syringes due to the abundance of immune cells immediately below the surface of the skin,” Forster said. “There’s also the opportunity to make the transportation of vaccines to rural and remote communities much easier as the vaccine patch can be stored at temperatures as high as 40ºC.”
Once Vaxxas manufacturing facility is ready, the company plans to produce 300 million doses a year.
In its newest partnership, Eli Lilly decided to invest in the Chinese biotech Regor Therapeutics as it seeks new opportunities for metabolic disorders therapies. In a $1.5 billion deal, only $50 million will come upfront and allow Lilly to access Regor’s CARD (Computer Accelerated Rational Discovery) platform. Regor its known for its expertise in structural biology, computational chemistry, therapeutic biology and medicinal chemistry. Under the agreement, Lilly will be developing, manufacturing, and commercializing the solutions to almost all countries globally, with China, Macau, Hong Kong, and Taiwan being the exceptions.
“Through this collaboration, we will have the opportunity to expand treatment options available to patients suffering from metabolic disorders,” said Ruth Gimeno, Ph.D., vice president, diabetes research and clinical investigation at Lilly. “Regor’s technology will also allow Lilly to further accelerate innovation and deliver breakthrough therapies in obesity and diabetes.”