September - 2021
Hi đ My name is Vincent, this is a great curated newsletter about VC, startups, fintech & mobility. Happy to connect: vcabanel@via-id.com
01.09 | 2021âs hottest fintech seed deals
Some investors shared their hottest seed deals, it tells something about current trends in financial services. Fintech doesnât lack of cash, with $234M poured into pre/seed fintech as of the writing of this note. Here are, to me, the most interesting ones:
Sunday (founded by Big Mammaâs people) who landed an impressive âŹ21.8M seed round (April 2021)
Tillit, a platform combining factoring with a BNPL model
Wajve secured âŹ5M in June 2021 for its âfinancial educationâ platform targeting the gen Z
Bridging the fiat and crypto world, Ramp raised $10.1M for its open banking API connecting crypto with fiat money
Fintechs are more and more deeply specialized, either on a use case or on a segment. Take Sundayâs funding. Tillit could be the most innovative one, with its B2B invoice and BNPL solution. This segment should escape to the incoming regulation for BNLP solution for consumers.
02.09 | On-demand grocery delivery startups: European benchmark
The q-commerce market is still fascinating to watch, in 2021, 8 startups launched. There should be a strong M&A activity soon, the craze canât last forever. Sifted made the job for benchmarking the European market:
In June, those companies raised + âŹ1.5B
The economics: it costs âŹ50/âŹ100K to open a dark store, couriers are paid by the hour (Gorillas pays âŹ10.50/âŹ11 per hour its couriers), 70% of COGS is going directly to the wholesaler (because of their size, they canât negotiate their prices), average basket size is âŹ20-âŹ40
What the VCs are looking at: % of orders delivered on time, orders fulfilled by a courier every hour, the time spent by couriers waiting, the accuracy of the pickers in the warehouse, inventory management, customer satisfaction
The companies could be divided into 2 categories: the ones that want to compete with the supermarket (Gorillas, Blok) and the targeting the âconvenienceâ customer such as Zapp
How much will it take to explode? Well, it will depend from the retention rate of the customers. Weâll soon see if itâs a nice-to-have or not.
03.09 | 377 Y Combinator Pitches Analyzed
The Y Combinator Demo Day for Summer 2021 welcomed 377 startups. For one minute, founders have to pitch their idea using only one slide. TechCrunch covered the event:
At a glance: 47 countries were represented, 50% of YC startups have their HQ outside of the US
The Demo Days lacked of crypto startups, but fintechs were highly represented
377 projects referenced in two articles, this is great to grasp whatâs happening in the startup world :)
07.09 | In-car digital payments
Ryd landed âŹ10M from BP Ventures for its in-car digital payments provider technology:
Ryd allows users to pay for services online, within the app or with smart car systems. Its technology offers flexible payment options
BP Venturesâ investment aims at developing tighter links with the startup, and develop its digital offering for customers
3K partners (service stations) are part of Rydâs network, in 7 countries. The solutions has 1.4M customers and concluded a partnership with Mastercard. The fintech plays on two markets: connected car data (with a projected size of $19B by 2030) and the non-fuel retail sales market (estimated at $285B by 2030)
âSeamlessâ happens to be the magical word when it comes to develop news services for customers. This is exactly what Ryd is working on, seamless integrated payment, making customers forgetting theyâre actually paying for something (think integrated in-app payment when you order an Uber)
08.09 | Another UK-based insurtech unicorn
Marshmallow, offering a digital car insurance, raised $85M. The startup developed an innovative approach, based on D2C and data analysis:
Some figures: +100K policies sold, a 100% growth compared to 6 months ago
Its data analysis models allows the startup to offer really competitive rates, and developing a wider range of products for a more diverse set of customers
Incumbents, which are not (overall) used to provide flexible car insurance, are less positioned to provide flexible car insurance products. This is Marshmallowâs chance, given the fact many car owners are questioning themselves about whether they should continue to drive a car
Flexible car insurance is such a promising market. With less car ownership, the development of subscription-based models (either leasing or pure subscription), demand for adaptive insurance product will increase.
09.09 | JP Morgan goes (strongly) in the car industry
The American bank is about to acquire 75% of Volkswagen Financial Servicesâ Volkswagen Payments, the financial-arm of the German automaker:
The app offers financial services for car buying or leasing, but also for car-related expenses payement (such as gas, electricity, parkingâŚ)
The incumbent will strenghten its online payment offering, and could use this new app to go into new markets
In-car payments should reach a total $4B in 2021, according to JP Morgan. Maybe the incumbent learnt from the 2010s fintech-era, and donât want to miss the market opportunity because of lack of technology-related solutions!
10.09 | PayPal acquires a BNPL Japanese unicorn
Paidy is swallowed by PayPal is a $2.7B deal:
The Japanese fintech was founded in 2014, and started to commercialize its zero-interest payment service in 2020
Its last funding round size was $120M, in March (the startup was then valued $1.3B). PayPal Ventures led its Series C extension round
Part of the reasons why PayPal made this acquisition is regional footprint
Month after month, PayPal buils a super financial services ecosystem, from BNPL to crypto. Is PayPal the Google of financial services?
13.09 | Renault accelerates in used-cars
After Bipiâs acquisition by RCI Bank and Services (financial arm of Renault Group), the bank invested in Heycar, a platform specialized in selling used-cars:
Among Heycarâs shareholders: Allianz, Daimler and Volkswagen. According to Luca de Meo, this move is aligned with âRenaultâs strategy to increase value creation at each key step of vehiclesâ life cycleâ
Heycar will launch in the French market, and is currently operating in Germany and the UK
Heycar will be integrated into Renaultâs sellers network, RCI Bank and Services will offer financing solutions dedicated to used-cars. Renault will also leverage one of its companies, Carizy, dedicated to P2P used-cars selling
OEMs are moving strongly into used-cars, think about InMotion Venturesâ investment into Caura. With less components available to produce cars, used-cars have kind of a momentum, but itâs also a great solution for many people that canât afford to buy new car, especially EVs.
14.09 | In which fintech & mobility tech startups the UK Gov is invested?
The UK gov launched the Future Fund to invest in startups weakened by the Covid. 15 months after its launch, Sifted makes the review:
As of today, the Future Fund invested in 158 startups (equity), issued convertible loan notes for 1.190 companies (ÂŁ1.14B)
Among the fintechs: Snoop provides its users opportunities to save money based on their expensesâ analysis (both for saving or save money on bills) and raised ÂŁ15M in July; CIRCA5000 allows its users to pour money into impact-oriented companies, therefore offsetting their carbon emission; Monese is a digital banking app; Funderbeam offers its users a solution to trade shares to investors and startup employees and riased âŹ3.3M in April
Amont the mobility tech startups: Zeelo runs electric commuter bus services (raised $12M in Auguest, with participation from InMotion Ventures; Motorway developed a marketplace for used-cars auctioning, and raised ÂŁ48M in June
Unsurprisingly, the highlighted startups (those who raised by August 31 among all the companies that received funding from the Future Fund) are mostly fintechs, weâre talking about the UK. In mobility, they are either into sustainable transport or used cars.
15.09 | Glovoâs acquisitions
Glovo, the Spain-based on-demand delivery (food and groceries) startup acquired Lola Market and Mercadao:
The startups have an âInstacart-styleâ model
Glovo is coming from a country which recently recognized delivery platforms riders as employees, therefore the startup imposed a new self-employment model and only hired âa fifthâ
TechCrunch analysis is that âby adding players in the supermarket and retail outlet picking delivery space, Glovo expands its coversage of shoppersâ needâ, hence it can increase the average basket order and providing both regular purchases and the âemergencyâ ones
Glovo claims its Q-Commerce division will reach âŹ300M GMV this year, planning to make 3x the result by the end of 2022
In the Q-Commerce war, both size and execution are key. Glovo is one of the pioneer of the dark storesâ model, and is well positioned into the game for this reason.
16.09 | Qonto quits the path to a full banking license
Qonto announced it will not look after a full banking license anymore, hereâs why:
In January 2020, the neobank raised âŹ104M, announcing its willing to snap a credit license in addition of its payment one
Qontoâs CEO told Maddyness the path for a full banking license requires time and capital, and prefers its partnership with October: the lending platform for SMEs
Some figures about Qonto: 450 employees, opening offices in Milan, Berlng and Barcelona, 200K customers. The fintech aims at targeting +250 employees companies
This is a smart move for Qonto, which can focus on creating great customer experience and relying of October which is one of the best player in the lending fintech segment. The pandemic clearly highlighted that neobanks arenât actually banks, which surprised lots of their users when they asked for a credit.
17.09 | Fintech funding in Europe (Q2 21)
As of today, fintechs in Europe raised more than the entire 2020 year:
In H1â21, European fintechs raised $12.8B (1.5x higher than all 2020)
Insurtech and wealth management fintechs led the growth in Q2â21: with insurtech totalling $1.8B (400% QoQ) and wealth tech sector accouting for $1.3B of total raised in the fintech sector
Money is flowing into European fintech like crazy, notably because of âfintech infrastructuresâ (open banking solutions) and the availability of the needed technology. Cash has to be well managed, and is a solution for building project, and fintech helps to do so.
20.09 | The startups making cars more intelligent
Sifted studied the startups developing solutions for the connected cars, and there are lots of uses cases:
Health monitoring: cars could detect cardiac events in drivers thanks to hidden sensors, B-Secur works on it. The startup is a biometric company doing heartbeat detection tech with OEMs (Honda, Daimler and Jaguar)
Remote driving: Vay builds a driverless fleet of cars driven by humans, according to Sifted âthe teledrivers have the advantage of not getting tired, drunk or distracted, thereby cutting down on accidentsâ. Another startup in this game is Ottopia, which recently raised from Hyundai Motor Group. The startups develops a system for driving remotely vehicles that are âthousand of miles awayâ
Gesture controls: Ultraleapâs technology is about allowing drivers to control cars with gestures (volume monitoring, turning on and off air conditioningâŚ)
Cybersecurity: since vehicles become even more connected, the more the technology inside, the more entry points for cyber attacks, and Upstream wants to tackle this issue
Both OEMs and startups are looking to develop innovative tech-based solutions, either for improving the driver experience or the overall carâs features. For sure the concept of vehicle, as we know it today, will be so much different in the coming years.
21.09 | Acquisition strategy in micromobility
Zoov published a nice white paper about acquisition strategies for micromobility operators, here are the main points:
Market size for shared mobility market weights +$60B (in the 3 major markets: China, Europe and US
Acquisition strategy is split in 3 main topics: awareness, consideration and decision. Sign ups are followed by a successful trip around 50% of the time in the shared mobility industry. Here are the main goals for each step: brand awareness (awareness), app download and sign up (consideration), completed trip and subscription purchase (decision)
When it comes to PR, itâs essential to prove your vehicles are safe, you can demonstrate product improvements and educate users to secure your operations
Shared mobility is such a competitive industry, itâs hard to stand out of the crowd and secure customers, because of the undifferenciated nature of vehicles. Itâs all about the brand, the reliability and fleet availability!
22.09 | Going fast: tutorial
I wrote about Sundayâs seed round in my Aprilâs newsletter, which was already impressive ($24M). They strike again with a $100M funding for their QR-code based checkout solution:
Customers can use a QR code to pay their bill. The solution accepts Apple Pay, Google Pay, AmEx, Visa and Mastercard
Sunday is integrated with Oracle, Brinks, Tiller etc. Business model is based on processing fees (no subscriptions or setup costs)
Main value proposition for restaurants is time saving and better table turnover rate. 1500 restaurants are using it, the fintech already counts +170 employees
Making payment more seamless and painless for users is a must, and Sunday got it. What a journey for a spin-off!
23.09 | Embedded finance report
Sifted published a nice report about embedded finance with OpenPayd:
Embedded finance is the integration of financial services into products and services of non-banking players
Most common use case is integrated payment (alternative payment options for shopping)
By 2025, embedded finance will reach a âŹ230B market size, the major segment being payments, followed by insurance and lending
OEMs launched their banking units in order to increase their sales volumes by providing credits to purchase them to customers, this is another example of embedded finance. Booking.com launched last summer its fintech division to offer customers a credit card (with the goal of increase bookings on the platforms). Shopify launched its financial services suite, hence developing a more integrated ecosystem
Embedded finance growth is mainly fueled by fintechs and tech companies: those players developed integrated distribution strategies (BaaS, Credit-as-a-Service, Payment-as-a-Service and so on). During the last 3 years, a neobank launched every 5 days somewhere in the world, because of the easy access to open banking platforms and off the shelves financial solutions
B2B is the major opportunity, with the rise of alternative funding (Uncapped, SilvrâŚ) and B2B BNPL solutions, banks met a bunch of new disruptors in their core business
Disintermediation started a long time ago when first digital payment solutions emerged. Now banks are attacked on every part of the value chain. However, they still have a legacy to defend, thanks to their big balance sheet they can focus on risk management, and imagine how to partner with fintech to acquire new customers.
27.09 | Android Autoâs new face
Android Auto evolved to make its dashboard less distracting:
Google Assistant driving mode displays âglanceable, tappable cardsâ for music, text messages and other apps
Google aims at making drivers being focused on road, not on their phones. This is a real issue: drivers selecting music had âslower reaction times than those who were high from smoking potâ according to a study
Last but not least, drivers will be able to pay by Google Pay at gas stations after selecting the pump right on their screens
Vehicles are not something that bring you from A to B anymore, but a true smartphone on wheels. Customers expectations about seamless experiences is high, and Google is the most well positioned to develop technological-based driver solutions.
28.09 | Swan raises $18M
The eFounders fintech raised âŹ18.7M in Series A, a fund led by Accel. Swan develops a BaaS platform:
The fintech operates in the growing embedded finance segment, providing financial services to non-financial companies, which act as a âdistribution channelâ for banking services
Swanâs clients are SaaS companies, marketplaces and fintechs, they are connected through API to the platform. Existing clients are Alma, Expensya, RideâŚ
The product allows to assign an IBAN for each account, and to offer both virtual and physical payment cards thanks to its e-money license
Swan is one of my favorite BaaS fintech, coming from the best startup studio in the world, go on guys!
29.09 | Will the SPAC bubble burst?
âLess than 10% of SPAC offerings since 2015 have produced positive returnsâ, says John Clark from Royal Park Partners. An interesting AltFi article makes a review of the SPAC-mania:
80B SPAC deals occured in the US alone in 2020 (!)
Critics says that SPAC sponsors have way too much equity before a merger, hence having great incentive to merge with any company in order to get paid
Because of forward-looking financial statements during the IPO process, it shadows the harsh reality behind companiesâ operations
Honestly, is enough companies willing to go public through a SPAC ? My answer is no. Is enough good companies willing to go publich through a SPAC ? You know the answer. The only loser will be the retail investor!
30.09 | Bike-as-a-Service is rising
Dance raised $19M for its subscribtion-based e-bike service:
The Berlin-based startup bet on designing its own e-bike, the Dance One
Pricing is âŹ79/month with no-long term commitment. Basically, all you have to do is riding, if you have an issue, someone will come to fix it
The subscription model is clearly something big, and for biking it addresses one of the most critial entry barrier: thief