We are back with our weekly summary of the most important FinTech news. This week, we talk about the surge of investments in the crypto mining companies, and companies that expand their cryptocurrency offers. We will also look at some of the most interesting IPOs and funding rounds that occurred this past week, the development of Paypal’s BNPL services, JPMorgan’s digital wallet not reaching the level of its competitors, the United Arab Emirates launching their first neobank, Ripple ending their partnership with MoneyGram and much more.
The cryptocurrency trading platform, Falcon X, has announced yesterday that they have successfully concluded a funding round, securing a $50 million investment.
In the past year, the increased demand for cryptocurrencies has cause extraordinary growth for the platform, with the revenues increasing by 46 times.
“We believe FalconX is positioned to be an industry leader in the institutional cryptocurrency market,” said Scott Shleifer, partner at Tiger Global, a company that has led the funding round.
So far, some of FalconX’s investors are Accel, Coinbase Ventures, Accomplice, Lightspeed, and Avon Ventures.
On Thursday, SoftBank has gained $33 billion on paper because of the public debut of South Korea’s largest e-commerce, Coupang Inc, commonly referred to as the Asian Amazon.
The IPO of Coupang was the biggest that the U.S stock market has seen this year, with the company raising $4.6 billion in their IPO and opening 81% above the offer price on Thursday.
The 3% billion investment that gave SoftBank a 37% stake in Coupang give it roughly a $33 billion headline profit, would the prices hold.
After raising more than $170 million from investors and gaining a valuation of over $1 billion, the payments company Flutterwave is considering a New York listing, the CEO of FinTech said in one of the most exciting FinTech news.
Flutterwave, a company headquartered in San Francisco and established in 2016 by Nigerian Entrepreneurs are specializing in individual and consumer transfers in the African market. It is one of the FinTechs that are capitalizing on the opportunities that lay in the booming African FinTech market,
“We may consider the possibility of listing in New York or a possible dual listing in New York and Nigeria,” Flutterwave’s CEO Olugbenga Agboola told Reuters on Tuesday.
In a statement that the company released on Wednesday, Flutterwave admits that the pandemic has been a catalyst for digital payments in Africa.
“The company’s valuation is now in excess of $1 billion. The fundraise brings the total investment in Flutterwave to $225 million.”
The investing round was led by Avenir Growth Capital and Tiger Global Management LLC and included Early Capital Berrywood, Green Visor Capital, and Greycroft Capital.
“Flutterwave is at the forefront of innovation in payments technology,” said Jamie Reynolds, of Avenir Growth Capital.“We are excited to support the team as they build the last available payments infrastructure frontier in the world – connecting merchants and consumers intra-Africa and globally.”
John Waldron, the COO of Goldman Sachs Groups announced on Wednesday that the demand in bitcoin is growing and that Goldman sees it as a continuous trend that must be addressed. As Waldron said, currently Goldman is trying to choose a path to meet the consumers’ demand and at the same time ensure that all the regulations are met.
“Client demand is rising,” Waldron said. “We are regulated on what we can do. We continue to evaluate it … and engage on it.”
This month, the bank began dealing bitcoin futures for clients and restarted its cryptocurrency trading desk. They are also exploring a bitcoin exchange-traded fund.
“The pandemic has been a significant accelerant,” Waldron said. “There is no question in our mind there will be more digital commerce … and (use of) digital money.”
A couple of months ago, we have reported on the “Buy Now, Pay Later” service offered by PayPal. It gained huge popularity in the United States and the United Kingdom and the payment giant is now bringing it across the pond.
On Wednesday, PayPal announced that the BNPL feature will be available in Australia from this June. PayPal has more than 9 million customers in Australia and the Australian market has traditionally been open to adopting new technology and the regulatory framework is not as extensive as compared to for example the European Union.
Paypal’s payments general manager, Andrew Toon, said that the Australian businesses have “inundated” Paypal with request after initial Britain and US launch of BNPL services in 2020.
JPMorgan plans to discontinue the Chase Pay digital wallet by the end of March. While the option to pay through Chase Pay will be disabled in all the app and websites, the customers will be able to link their Chase credit cards to PayPal accounts or shopping sites and apps.
Chase Pay option was created in 2015 and it was meant to compete with Apple Pay and other digital wallet rivals. In 2017, JPMorgan has started the cooperation with PayPal to link Chase Pay to PayPal accounts and use reward points to make purchases.
However, Chase Pay did not reach the level of its competitors. The mobile app of Chase Pay has already closed last year.
Since the beginning of the year, everybody’s eyes have been on bitcoin and its performance. This week, Bitcoin has been doing relatively well, with a strong rise on Tuesday, narrowly missing the all-time high record of $58,354 that was seen on February 21.
Tuesday was the fifth consecutive day with gains, trading 3.3% up and reaching $54.206. This year alone, bitcoin has risen 87% and outperforms conventional asset classes by far.
As expected, the surge in bitcoin has caused the shares of cryptocurrency miners to surge as well, with Riot Blockchain rising by 28% and Marathon Digital Holding by 22%
In the last weeks, we have seen a surge in investment in Chinese companies that are looking at expanding their cryptocurrency services. Even with challenging official attitudes towards cryptocurrencies that are common in China, this part of the market has been booming in the last months, as Bitcoin and other cryptocurrencies have shown a performance we have never seen before.
After Bitcoin has outperformed itself, surging more than 300% since Q4 of 2021, companies around the world started looking for opportunities to capitalize on that growth.
“Bitcoin prices present us with a unique opportunity to establish mining operations,” said David Feng, co-CEO of a new company Code Chain that has just ordered 10 000 bitcoin mining machines.
“Everyone can feel this euphoric atmosphere in the market, and Coinbase’s listing would lift the mood further,” Jiang Changhao, co-founder and CTO of the Beijing-based Cobo, a crypto custodian and wallet service provider, added.
On Monday, the blockchain payment company Ripple announced that it will discontinue its collaboration with MoneyGram International, a money transfer services company. The reason has not been disclosed. However, the CEO of Ripple, Brad Garlinghouse said that he is open to future cooperation with MoneyGram.
In what was supposed to be a to year deal, Ripple bought a $30 million stake in MoneyGram in 2019. Because of the partnership, MoneyGram could use Ripple’s products for cross-border payment and forex settlement.
On Monday, PayPal announced that it will buy the Israeli startup Curv. The deal with the digital asset security provider is not a surprise as PayPal is looking at higher support for cryptocurrencies.
The deal will close in the first half of 2021, but specifics have not been disclosed as of yet. Curv will be a part of the cryptocurrencies-focused unit that is a recent addition of PayPal.
On Sunday, the first independent digital banking platform was launched in the United Arab Emirates. The Dubai-based neobank YAP is cooperating with RAK bank that secures the funds of the customers under its banking license. YAP is also looking at strategic partnerships with banks in other countries, including Saudi, Pakistan, and Ghana.
Being a neobank with no physical branches, YAP does not offer services such as loans and mortgages but rather focuses on peer-to-peer payments, remittances services, spending and budgeting analytics, and bill payments.
“The fintech revolution has become very popular in other parts of the world and we saw a gap and unique need for this service in the Middle East,” said YAP CEO and founder Marwan Hachem. “There are a lot of fintechs right now looking at partnering with banks, but that requires a lot of discussions, relationship building … It is not an easy thing to do”
Last Friday, Cipher Mining announced that it will go public via SPAC merger with the Good Works Acquisition Corp. The deal is valued at roughly $2 billion and is expected to close in the second quarter of 2021.
After the announcement, Good Work’s shares have gone up by 15.9%
Despite the uncertainty in the cryptocurrency regulations environment, many crypto companies are planning SPAC mergers to go public.
“I do see a future where the SEC will continue to analyze and hopefully embrace bitcoin in particular. All of the crypto is a much bigger question,” Cipher Mining CEO, Tyler Page, told Reuters. “We wanted to get to market quickly and efficiently and after evaluating different paths, the SPAC market allowed us to get to market the quickest.”
If you are interested in FinTech news, check out: