B2B Fintech Radar: August 26, 2022

On the radar this week:

Q&A with Daniel Andres and Dr. Teddy Amberg of Spicehouse Partners

ClaimLogiq, a healthcare payment integrity platform, raised funding as part of a recap.

BankiFi, a UK embedded small business banking platform, raised £4 million to expand into the US.

Ansible, a startup building a blockchain-based payments platform, raised $7 million in seed funding.

Rocketplace, an asset management platform for crypto, raised a $9 million Seed III round.

Primitive, a decentralized finance AMM and infrastructure provider, raised a $9 million Series A.

FOMO Pay, a Singaporean digital banking provider, raised a $13 million Series A.

Farther, a wealth technology provider for high-net-worth individuals, raised a $15 million Series A at a $50 million valuation.

Modern Life , a life insurance brokerage for financial advisors, raised a $15 million seed round.

Agora, a real estate investing platform, raised a $20 million Series A.

Pomelo, an overseas payment provider, raised a $20 million seed round and $50 million in lending debt.

Forage, a payments processor for accepting SNAP EBT (food stamp) payments online, raised a $22 million Series A.

Central Payment, a payments and card issuing provider, raised $30 million in growth equity.

Finix, a payfac-as-a-service company, raised $30 million in new capital.

Injective, a smart contracts platform for financial use cases, raised $40 million.

Truework, an income and employment verification platform, raised a $50 million Series C.

Q&A with Daniel Andres and Dr. Teddy Amberg of Spicehouse Partners

1. ​A year since the first lockdowns- is this a good time to be building or scaling an Enterprise FinTech (/ InsurTech) firm in Europe?

Yes. The Covid-19 pandemic has accelerated digitalization throughout industries by a couple of years. This digitalization trend will stay and continue to foster, especially in sectors such as fintech and insurtech. We firmly believe in the potential of start-ups in those (and adjacent) sectors. The resulting new or more efficiently structured business models offer tremendous opportunities.

Eir Partners invests in ClaimLogiq, the Leader in Healthcare SaaS Payment Integrity Solutions

CHARLESTON, S.C.–(BUSINESS WIRE)–Eir Partners announced the completion of a growth recapitalization of ClaimLogiq, the leading Software-as-a-Service and technology enabled payment integrity platform focused on pre-payment solutions. ClaimLogiq has developed a best-in-class technology that enables health plans to optimize payment integrity programs through a more proactive SaaS, Service and Hybrid model. The investment into ClaimLogiq supports Eir Partners desire to build a next generation payment integrity technology organization on the heels of success at CloudMed, Millennia and others.

Eir Partners strategy is to leverage ClaimLogiq as a platform investment and continue to aggressively invest in new product development and automation to broaden its portfolio of adjacent solutions. Additionally, the company plans to complement organic growth through synergistic acquisitions that deliver actionable data analytics, scalable partnerships and content rich results to increase savings and work in collaboration with health plan partners. Since the Eir Partners investment, ClaimLogiq has completed the acquisitions of itemized bill review company, Medliminal, and SyTrue, a health care focused natural language processing technology company.

Founded in 2013 and based in Charleston, SC, ClaimLogiq enables payment integrity programs at some of the largest payers in the country via a proprietary technology platform called TrueCost. This highly configurable platform will support the healthcare industry’s focus to a more transparent and proactive approach to payment integrity, enabling payers and service providers to deliver a more comprehensive and dynamic payment integrity program. This new platform is the only market offering that enables users to either perform their own payment integrity reviews, leverage ClaimLogiq subject matter experts, or operate a hybrid model that employs both methods, creating wide range scale and flexibility.

BankiFi secures £4 million for expansion into US

Machester-based fintech BankiFi has secured £4 million in funding to take its embedded bank-to-SME platform into new markets, with a focus on North America following the recent establishment of a US sales office

BankiFi provides an open cash management platform and architecture that transform a bank’s current digital banking infrastructure to address the specific issues of their SME portfolio.

The latest funding round is led by Praetura Ventures with support from Great Manchester Combined Authority. It follows a £2.2m injection by the same backers in September last year.

The firm, which has also received backing from Nationwide Building Society, Co-op Bank and TSB, was founded in 2017 by Mark Hartley, who previously scaled payments technology provider Clear2Pay, which was sold to FIS for circa €375m in 2014.

“With investments into technology companies starting to slow, this is a huge endorsement from our investors that proves we’re doing the right things as a business at BankiFi,” says Chris Fry, BankiFi CFO. “This latest investment means we can continue our global expansion and focus on supporting banks to make all aspects of cash management and payments easier for SMEs everywhere.”

BankiFi announced its expansion into North America last month, appointing financial services veteran, Keith Riddle, as it US lead.

Blockchain Payments Platform Ansible Labs Raises $7M in Seed Funding Round

Ansible Labs, a startup that is building a payments platform for blockchain accounts, has raised $7 million in a seed funding round that was led by early-stage crypto venture capital firm Archetype.

The capital will go toward hiring, liquidity and operating expenses ahead of the launch of the project’s first product, according to a fundraising deck provided to CoinDesk.

“We see off-ramp as a missing piece in the puzzle that is mainstream Web3 adoption and usage,” Ansible Labs co-founder and CEO Daniel Mottice told CoinDesk in an email.

The Ansible team has ties to global payments provider Visa, Mottice was product lead for Visa Crypto and helped build and launch Visa Direct Payouts, a service that allows financial institutions to push out payments to accounts around the world. Ansible co-founder and Chief Product Officer Matt Vanhouten also worked at Visa Direct and has a background in traditional finance with stints at Wells Fargo and JPMorgan & Chase.

“We’re ecstatic to support Dan and the Ansible team in building a pillar company at the intersection of fintech and crypto,” Ash Egan, a general partner at Archetype, said. “Ansible is solving a critical need only growing in importance as more businesses come on-chain and the creator economy in Web3 hits its stride.”

Other participants in the funding round included Castle Island Ventures, A* Partners, Arca, Soma Capital, Plural VC and Eniac Ventures.

The Web3 on-boarding process, also called an “on-ramp,” requires a user to set up a cryptocurrency wallet and send fiat currency to that wallet in order to purchase the crypto needed to interact with non-fungible token (NFT) marketplaces, decentralized finance (DeFi) platforms and other blockchain-based programs.

Withdrawing the crypto back into fiat is called an off-ramp. While both on-ramp and off-ramp processes come with technical and regulatory complexities, Ansible Labs sees off-ramps as an underserved market.

Rocketplace raises $9M in seed funding to build the ‘Fidelity for crypto’

Rocketplace, a startup that aims to build a “next-generation asset management platform for crypto,” has raised $9 million in a seed funding round.

A few things about this raise stood out. For one, the funding comes at an interesting time in the crypto world — during the so-called “crypto winter” and a period that has seen other major players in the space such as Voyager and Celsius go bankrupt and others such as Robinhood and Coinbase conduct mass layoffs. Secondly, Rocketplace — which offers commission-free trading of more than 30 tokens — claims to “not be just another crypto exchange.”

It wants to go a step further by making fund distribution and management the center of its offering. This is based on the belief that there will be an “explosion” of new digital financial products offered in the crypto space, and that all of those products will need distribution.

Meanwhile, points out CEO Louis Beryl, customers will need appropriate disclosures and compliance, especially as regulation increases in the industry.

Also notable is the track record of the founding team.

Beryl and Ben Hutchinson (COO) previously built online lender Earnest together. That company sold to Navient in 2017 for about $155 million. Beryl was also a partner at both a16z and Y Combinator, and also founded Solid Energy Systems, which went public via a SPAC merger on the NYSE earlier this year.

Launchpad Capital led Rocketplace’s seed round, which also included participation from TTV, Accomplice, Menlo Ventures and Soma Capital. Accomplice led its pre-seed round, which totaled $8 million across two tranches and included checks from Launchpad and Better Tomorrow Ventures.

Primitive raises $9 million to build AMM discovery platform

Decentralized finance (DeFi) infrastructure and product developer Primitive announced it has raised $9 million in a Series A round led by Bain Capital Crypto. 

Other investors in the round include 1Confirmation, Nascent and Robot Ventures, according to a press release issued Thursday. 

Founded in 2020 by Alexander Angel, Primitive builds innovative products focused on Automated Market Makers (AMMs). 

What is an AMM?

AMMs power decentralized exchanges (DEXs), a type of exchange that enables transactions to occur directly between traders without the need for a third party to settle the trade. 

On a centralized exchange, professional market making firms such as Susquehanna Capital Group and Wolverine Trading provide liquidity for traders. 

To remove the risk of liquidity being controlled by a select few parties, decentralized exchanges leverage AMMs that offer liquidity pools. Anyone can contribute assets to the pool and the AMM uses algorithms to price the assets in the pool, balance the pool, and trade with DEX users.

FOMO Pay secures $13 million in Series A investment round

FOMO Pay, the Singapore-headquartered major payment institution that enables the digital economy with global virtual banking solutions for financial institutions and enterprises, today announced that it has secured a USD 13 Million investment for its Series A round led by Jump Crypto. Other participating investors include HashKey Capital, Antalpha Ventures, Ab Initio Capital, and Republic Capital.

With the injection of fresh funds, the firm will accelerate its growth and will invest in talent acquisition and its infrastructure. The firm will also strengthen research and development capabilities, as well as a geographical expansion. The firm will also:

• Extend its client base to embrace digital payments and accelerate digital adoption with more main-stream institutions stepping into the digital asset space.

• Expand geographically with first-mover advantage on license and compliance into other jurisdictions.

• Diversify product offerings following the crypto adoption curve including working closely with regulators on Central Bank Digital Currency (CBDC) projects.

Commenting on the successful closing of its Series A fundraising, Louis Liu, Founder and CEO of FOMO Pay said, “2022 has so far been a breakout year for FOMO Pay – we are seeing significant growth across all business lines. Our volumes for the first half of 2022 have already surpassed the full year 2021 levels and our client pipeline is extremely strong. We attribute this success to the hard work of our team and their effort to always put customers first.”

“This is a milestone year for us as we turn eight years old. We will continue to strive hard towards building Asia’s first licensed payment ecosystem with interoperability between fiat and cryptocurrencies, and we are grateful to the unwavering support and belief from our investors, stakeholders and partners. We are extremely proud and grateful to be one of the front-runners in this industry in Singapore. Singapore has been at the forefront of innovation with a world leading licensing and regulatory framework. Our goal is to work in harmony with all stakeholders, on both developmental and regulatory approaches to achieve the vision of Singapore as an innovative and responsible global digital asset hub,” further added Liu.

FOMO Pay was the first firm in Singapore granted approval by the Monetary Authority of Singapore (MAS) for Digital Payment Token Services. It is licensed to provide Merchant Acquisition Service, Domestic Money Transfer Service, Cross Border Money transfer and Digital Payment Token Service.

Farther, a wealth tech firm, banks $15M Series A as valuation hits $50M

Building wealth is a long process and can be complex, but Farther is bringing both technology and advisors to the table to make these kinds of services more accessible.

The wealth technology company was co-founded in 2019 by Taylor Matthews and Brad Genser, who say Farther is “a new kind of financial institution” catering to high-net-worth professionals building generational wealth but want the freedom of both an automated system and a professional.

Prior to Farther, Matthews, CEO, was an investment banker and management consultant before co-founding Essmart, a social enterprise company in India, and then moving over to a leadership position at fintech retirement advisory firm ForUsAll. Meanwhile, Genser, CTO, is a military veteran who previously worked at Goldman Sachs leading an artificial intelligence team in private wealth.

Capitalizing on their experiences, the pair created Farther to provide tools that are two-fold: one set for advisors to expand their businesses and one for clients to invest in ways that align with their goals using automation, artificial intelligence or one of the advisors. Advisors set the costs for using the platform.

Wealth management is big business with many startups bringing unique approaches. For example, PINA in Indonesia targets the middle class with investment services that don’t have high minimums and fees, while Tifin has both a consumer investment marketplace and one geared toward businesses.

Modern Life Launches to Public with $15M Funding Led by Thrive Capital & 12 Unicorn Founders to Empower Life Insurance Advisors

NEW YORK, NY / ACCESSWIRE / August 9, 2022 / Modern Life, a tech-enabled life insurance brokerage for advisors, announced today that it has exited stealth with $15M in seed funding from marquee investors. Thrive Capital led the funding with participation from 12 unicorn founders from Hippo, Plaid, Reddit, Flatiron Health, Newfront, At Bay, Vouch, Cedar, and Lattice.

“In our conversations with advisors across the country, we heard emphatically how challenging it is to get their clients life insurance coverage. From in-person medical exams and 50+ page application forms to countless client and carrier touchpoints, advisors face an arduous, opaque, and lengthy process – often more than a quarter long,” said Michael Konialian, Co-Founder and CEO of Modern Life. “We’re bringing the best of technology, data, and design to streamline the process end-to-end while still supporting large and complex risks. We are proud to support leading advisors as they navigate a new and dynamic industry landscape that is changing more rapidly now than at any point in the last 150 years.”

Proptech Firm Agora Closes $20 Million Series A Round

Israel-based Agora, a real estate investment management proptech startup, announced on Wednesday that it had closed a $20 million Series A round. The funding will be used to grow the company’s technology and headcount in the U.S.

The round was led by Manhattan-based global venture capital and private equity firm Insight Partners, with participation from Aleph, an Israel-based venture capital firm. Agora closed the round in three weeks, said Bar Mor, CEO and co-founder of Agora.

The fintech/proptech SaaS startup was founded in late 2019 in Tel Aviv and raised $9 million in previous funding rounds, Mor said. Along with further building out its tech platform, the newly raised funding will go toward tripling the five-member staff in its Manhattan office, he added.

The company provides customizable, secure software that helps real estate firms automate their back-office processes and increase operational efficiency. Agora automates fundraising, investment management, reporting, payments, document sharing and tax operations.

Pomelo exits stealth mode with $20M seed to rethink international money transfer

Eric Velasquez Frenkiel had a seemingly simple thought when visiting his family in the Philippines, impressed by the cashless economy that had formed. Instead of sending money to his family once a year — a costly, fee-heavy affair — why can’t he just leave his credit card there?

As with many things in fintech, it wasn’t that simple. But the seed of the idea made the former enterprise chief executive turn his career into a bet on one of fintech’s most elusive problems.

Pomelo, Frenkiel’s new startup launching out of stealth today, wants to make it easier to send remittance payments and conduct international money transfers, with a credit twist.

To execute on that vision, Pomelo has raised a $20 million seed round led by Keith Rabois at Founders Fund and Kevin Hartz at A* Capital, with participation from Afore Capital, Xfund, Josh Buckley and The Chainsmokers. The round also included a $50 million warehouse facility, which will allow Pomelo to give upfront cash to people who want to make transfers.

Venture investors are not the only cohort showing interest; more than 120,000 people have joined Pomelo’s waitlist over six months, according to Frenkiel. (It’s important not to confuse this Pomelo with another Pomelo, a fintech-as-a-service platform for Latin America that has raised $9 million in funding.) Oh, fintech.

Here’s how the startup works: If someone wants to send money overseas, they make a Pomelo account, which comes with up to four credit cards. The creator of the account — let’s just assume that they’re the one that is sending the money — can set limits, pause cards and view spending habits.

Food Stamp-Focused Fintech Raises $22 Million

Each year, 42 million Americans receive food stamps–now known as SNAP benefits–which they can use at 250,000 retailers. But despite the surge in e-commerce and grocery delivery since the Covid-19 pandemic began, there are only about 100 retailers where you can use SNAP benefits to pay for online grocery delivery today.

Forage, a 17-person San Francisco fintech startup founded in 2019, is trying to fix this problem with software that helps grocers accept online SNAP payments. The company has raised $22 million in Series A funding led by NYCA Partners. PayPal Ventures, EO Ventures and angel investors like Instacart founder Apoorva Mehta also invested, valuing Forage at about $100 million.

Three years ago, Anthony Grullon, who grew up in Paterson, New Jersey, receiving SNAP benefits, had the idea for a consumer-facing app that let low-income consumers get discounts on groceries. While he was a Wharton M.B.A. student, he founded Forage with entrepreneur Justin Intal and software engineer Victor Fimbres. But in the summer of 2020, Grullon left Forage after getting in a car accident, during a period when he was battling mental health issues.

As Covid swept the country and many Americans opted to get groceries delivered instead of going to the store, Intal and Fimbres found a bigger problem than food discounts that needed solving: Few retailers accepted SNAP payments for online delivery orders. They pivoted the business, aspiring to become a sort of Stripe for SNAP payments. Intal left Forage in the spring of 2022 after deciding he wasn’t the right person to lead the company, while Fimbres stayed on as chief technology officer.

Central Payments Closes $30M Growth Equity Raise

Central Payment, a payments-tech and card-issuing platform, today announced it has raised $30 million in growth equity financing that will spin it out from Central Bank of Kansas City.

“Since inception, we have remained steadfast in our belief that new technology and the stability of a bank charter create opportunity for banks in fintech and embedded finance when others may have perceived a threat,” Central Payments Founder and President Trent Sorbe said in a prepared statement.

The funding was led by Castle Creek Capital and included Launchpad Capital, according to the announcement.

“We see the future opportunity for banks in embedded finance and fintech. Central Payments’ team of fintech bankers and its Open\CP API platform are lynch pins for those relationships,” Tony Scavuzzo, managing principal at Castle Creak Capital, said in a prepared statement.

The investment is the first from Castle Creek Launchpad Fund I. Castle Creek and Launchpad Capital teamed up after Launchpad raised $90 million from 34 community banks, according to the announcement.

“We’re backing innovators and new financial technologies,” Launchpad Capital founder Ryan Gilbert, said in a prepared statement. “Central Payments’ origin inside a community bank and its positioning at the intersection of banking, payments and fintech made it an ideal first investment for our new fund.”

Central Bank of Kansas City will remain an investor in Central Payments.

The bank launched in 1951 to serve lower- and middle-income customers and CEO Steve Giles said in a prepared statement today that the institution will use funds of from the investment “to expand on the original vision.”

Finix raises an additional $30M to become the payments provider of choice for software platforms

Finix has raised $30M in new capital, bringing our total funding to $133M. New and existing investors chose to back Finix thanks to the growth we’ve shown in the last six months, including Q2 2022 being our best quarter ever in terms of new deals closed. Given the current funding environment, we also want to share that this financing (raised this summer) occurred at an increased valuation. 

We’re grateful to be backed by many incredible investors who believe in Finix’s mission of creating the most accessible financial services ecosystem in history, including The General Partnership (TheGP), Franklin Templeton, Acrew Capital, Amex Ventures, Bain Capital Ventures, Cap Table Coalition, Homebrew, Insight Partners, Inspired Capital, Lightspeed Venture Partners, Precursor Ventures, PSP Growth, and Vamos Ventures.

Here’s what Dan Portillo, co-founder and managing partner at TheGP had to say about their investment in Finix:

“The payments space is surprisingly young—only nine percent of payments are digital today. And if the last two years have taught us anything, businesses with modular and configurable payments technology are best equipped to benefit from commerce moving online. TheGP invested in Finix because we believe they are the only payments provider that offers software platforms the flexibility needed to succeed as they scale.” 

And here’s why Matt Harris, Finix board member and Managing Director at Bain Capital Ventures, is doubling down:

“The next generation of fintech is all about businesses embedding financial services when and where their customers need them most. Finix is a leading example of the type of state-of-the-art payments infrastructure provider that makes this embedded experience possible. BCV is proud to continue to support their growth.”

Injective Raises $40M from Jump Crypto and BH Digital to Accelerate Growth

NEW YORK, Aug. 10, 2022 /PRNewswire/ — Injective, a blockchain built for finance, today announced a new $40 million funding round led by Jump Crypto.

BH Digital, the crypto arm of famed hedge fund manager Alan Howard, has also joined the round.

Injective is the first fully decentralized smart contracts platform optimized for building decentralized finance applications such as exchanges, derivatives, prediction markets, and options. Finance dApps, such as Injective Pro and Frontrunner, leverage Injective’s interoperable blockchain alongside its out-of-the-box cross-chain primitives, such as an on-chain order book and binary options module, to power a new ecosystem of connected DeFi applications.

The new capital will allow Injective to increase utility for the native INJ token, provide liquidity to existing dApps built on Injective, and support new dApps on Injective via investments. Jump has previously engaged in similar comprehensive deals with popular blockchains such as Solana and Oasis.

Injective is built with Cosmos SDK and utilizes an Ignite (formerly Tendermint) proof-of-stake consensus mechanism. It is compatible with other Cosmos IBC-enabled chains, but is uniquely interoperable with multiple layer 1s, such as Ethereum. Injective has already processed over 90 million transactions, surpassing popular blockchains such as Solana despite only being live for a few months. dApps built on Injective generated over $7 billion in cumulative volume, becoming one of the fastest growing ecosystems in the industry today.

Truework, which helps lenders verify borrowers’ income and employment, raises $50M

Truework, a company that builds technology for mortgage and consumer-centric lenders to instantly verify the income and employment of borrowers, has raised $50 million in a Series C round of funding led by G Squared.

Founded in 2017, San Francisco-based Truework integrates with payroll providers including Gusto, Zenefits and BambooHR, and enables mortgage providers and lenders (e.g. automotive, personal loans, and student financing) to verify and approve borrowers quickly within their own applications using Truework’s APIs. The company also supports background checks for employers and staffing companies seeking to verify potential new hires.

Truework estimates that it will power in excess of 12 million income and employment verifications this year.

While a large part of the Trueworks platform is about supporting so-called “instant verifications,” sometimes it’s not always possible to do so, depending on the individual’s personal employment history and status, meaning that a lender has to revert to collecting paper payslips and documents. As such, Truework recently rolled out a new tool called Truework Documents, which transforms physical documents that a user has uploaded digitally into structured data to make it easier to assess for fraud risk.

Truework’s raise comes as consumer borrowing continues to surge in the U.S., with vehicle loans in particular driving a significant part of that. On the flip-side, mortgage demand recently hit a 20-year low after the highs of 2020, but Truework co-founder and CEO Ryan Sandler reckons that the need for automated verifications is only going in an upward direction.

“The rising demand in 2020’s housing market within the mortgage space meant businesses needed more flexible solutions that could scale quickly and help improve verification efficiency,” Sandler wrote in a blog post. “While 2022 has seen some slowdowns to the pace of demand, the need for automated income and employment verifications is ever increasing. For consumer lenders, increasing competition paired with market uncertainty has driven demand for more robust and accurate data sets to build more resilient underwriting models.”

Financial Venture Studio Closes Second Fund to Help Founders Build the Future of Financial Services

Today we are thrilled to announce the close of our second fund to help founders build the future of financial services in the U.S. We couldn’t be more excited and humbled to continue to invest in and build the fintech ecosystem alongside some of the industry’s leading institutional investors and in partnership with a group of visionary founders.

Since launching in early 2018, we’ve strove to position ourselves as the first stop a founder makes in their entrepreneurial journey. The barriers to entry in fintech are high, and launching a new company is incredibly complex. Our goal is to speed up that process by proactively bringing partners from across the financial services industry to engage with our founders while providing deep operational support and early capital. We’ve seen that this approach consistently allows our founders to move faster, make better informed decisions and, over time, build category defining businesses. 

Since launching, we’ve invested in 50 firms, had one company go public, seen eight acquisitions – nearly all of which were accretive to our investors  –  and seen several billion dollars of enterprise value created by our portfolio companies. Within our portfolio, a stunning 94% of our companies have raised follow on capital, or have been acquired.

We’re particularly honored to partner with some of the industry’s leading institutional LPs on this journey, including pension funds, insurance companies, some of the world’s most successful software companies, banks spanning the spectrum from century old community banks to global powerhouses and dozens of the leading investors, founders and operators in fintech. We were thrilled to see that investors representing 97% of the capital in Fund I re-upped into Fund II, often doubling or tripling their commitments.

New Venture Fund Provides Investors Exposure to the Disrupting Fintech Sector

APPLETON, Wis., Aug. 17, 2022 /PRNewswire/ — Global Alternative Investment Management LLC (“Global Alts”) has announced the launch of FinTech Fund II which is available to Qualified Purchasers. The Fund’s investment objective is to opportunistically acquire a portfolio of companies and funds that seek to invest and profit from investments in financial technology. Such as software and digital services that improve efficiency and speed or decrease costs in the provision of financials services. The Fintech ecosystem includes services as insuretech, regtech, roboadvisory, banktech, digital lending, cybersecurity, digital signature, identity technologies, blockchain, machine learning, AI, and smartcontracts.

FinTech Fund II has raised $1.9 million to date and has deployed initial capital into four investments: a diversified blockchain fund that seeks out venture equity along with early stage and established token investments, a blockchain enterprise focused on developing wireless infrastructure network, a growth equity fund investing in high performing fintech companies, and an automated digital Latam freight enterprise.

“The financial services industry is at a structural inflection point. We believe that the wave of unprecedented regulation and the proliferation of low-cost enabling technologies are providing the necessary catalysts for significant dislocation and democratization of market share,” says Prateek Mehrotra, Chief Investment Officer. In recent years, the fintech industry has innovated consumer and business applications at a rapid pace. “One of the biggest benefits of fintech is the competition it has introduced into the financial industry. With access to this innovative technology, customers now have an alternative to large organizations and banks, which usually are more expensive options.” Fintech has and will continue to be life-changing in terms of access, transparency, and convenience. We believe our lives are impacted at an increasing rate by disruptive technologies created by high-growth companies with innovative ideas that provide investors with unique opportunities.

The market correction in public equity and crypto markets will also impact venture capital and private equity valuations. While public market investors feel the impact of downturns almost immediately the repercussions on private market assets are more complicated. Low interest rates for the past 14 years inflated valuations and investor appetite for more risk. Forced selling by investors that borrowed too heavily or have cash needs may create opportunities in the secondary market, while need for capital in a tightening funding market will cause companies to raise capital at lower prices than previous rounds. In any case, we see the current environment as one that will generate opportunities to acquire the next generation of fintech companies at better prices.

Lord Hammond enlisted to back £1 billion UK fintech fund

A group of senior industry figures are leading plans to create a new £1 billion fintech fund to accelerate the growth of promising UK scale-ups, Sky News has learned.

Lord Hammond, the former chancellor, is among a host of heavyweight figures being enlisted to back the new venture, which has been provisionally named the Fintech Growth Fund. Other names cited include fintech veteran Al Lukies and the Fintech Alliance’s Phil Vidler.

Hammond already acts as an advisor to UK crypto startup Copper and challenger OakNorth Bank.

City sources told Sky News that the fund would seek to raise capital from institutional investors and be independent of the government.

Companies including Barclays, London Stock Exchange Group and Mastercard are said to have been approached about providing small amounts of seed funding to get the new vehicle operational.

The war chest would aim to plug a gap in funding identified by Ron Kalifa as part of his Government-backed review into UK fintech.

“With a £2bn fintech growth capital funding gap in the UK, many entrepreneurs prefer to sell rather than continue to build their promising company,” his report said. “There is £6trn in UK private pension schemes alone, a small portion of which could be diverted to high growth technology opportunities like fintech.”

The aim would be to provide funding to companies as they progress beyond the Series B stage of capital raising, when they typically seek to raise tens of millions of dollars to ‘scale up’ their operations.

Insiders approached by Sky News said plans were being assembled for an announcement about the fund’s launch as soon as this autumn.

Upper90 raises $180 million for credit and equity fintech fund

Upper90, a hybrid fund that provides tailored credit and equity to to e-commerce, fintech, and supply chain finance startups has raised $180 million in a capped initial closing for its third fund.

Since raising Fund I in 2018, Upper90 manages and has syndicated over $2.2 billion across 43 portfolio companies, including the likes of Octane, Crusoe Energy, Mundi, Thrasio, Filmrise, Heroes, Clutch, Karat, Beacon and Settle.

The new fund was sourced from an investor base of 300 entrepreneurs to help founders scale with less dilution. The firm’s investment model combines tailored credit and equity for technology businesses that have predictable revenue or collateral.

Billy Libby, co-founder and CEO of Upper90, comments: “Over the last 10 years, founders have faced fifty percent dilution through Series B rounds. Upper90-backed founders, conversely, own materially more by utilising credit earlier for the healthier parts of their businesses. With pressure on valuations, access to alternative financing solutions is top of mind.”

The firm was founded in 2018 by executives from Seamless-GrubHub and Goldman Sachs.

“Somewhere along the way founders started getting judged on how much money they raised instead of how much ownership they retained. This is backwards,” says Jason Finger, co-founder and chairman of Upper90 and co-founder of Seamless-GrubHub. “Debt has been viewed as a four-letter word but, in reality, by looking at how it is utilised in real estate, it is clear that online business models that have predictability or asset collateral can massively enhance equity returns by being thoughtful with credit.”