Early stage European FinTech deals include StepEx, Foros, Dyme etc. We feature Q&As with Nigel Verdon of Railsbank and Maximilian Schausberger of Elevator Ventures.
If you are an early stage startup in Europe building the next big thing in FinTech, reach out to Frank Schwab or Samarth Shekhar.
Scaling Enterprise FinTech: with Nigel Verdon of Railsbank
1. Tell us a bit about yourself and your company.
Railsbank is the leading global Banking-as-a-Service (BaaS) platform. It enables banks, businesses and brands to define the future of consumer and SME finance.
Marketers, product managers, developers, CEOs and founders are able to take their financial product vision and rapidly prototype, launch and scale using Railsbank’s open finance platform which consists of operations, regulatory licensing and a rich set of APIs.
Railsbank was founded by myself and Clive Mitchell in 2016, in London.
My own background started in the financial services industry. My first job working as an engineer in the motor industry and seeing the high levels of automation and “just in time” manufacturing achieved back in the late 1980’s early 1990’s. In the banking world this is called “straight through processing (STP)” and the financial world could learn much from manufacturing/process engineers in the motor industry.
I then learnt so much working in the capital markets business in one of the most innovative banks in the industry Swiss Bank Corp (today called UBS). This was back in the early-mid 1990s when this “internet thing” appeared on the scene.
Swiss Bank Corp were really the first real innovator to leverage technology in the capital markets area of banking to leapfrog the competition (e.g. better risk management, better options pricing etc.).
I built my first startup, Evolution, based on my experiences at Swiss Bank Corp to take the “internet enablement of capital markets” to many amazing customers like Goldman Sachs and UBS.
Roll on to 2007 and I had just left Dresdner Kleinwort Wasserstein to set up Currency Cloud. I founded Currency Cloud because the experience of a traditional currency broker at the time (name not mentioned!) was charging me 4% “no commission” and asked me to fax back my confirmation note and payment details to them! I didn’t own a fax machine!
So, with a colleague, Nick Bourner from Evolution (who is now currently Chief Architect at Railsbank) we built the Currency Cloud platform to offer straight through processing of physical FX and payments via APIs (we were the trail blazers in the API led fintech industry).
At Currency Cloud, we worked on jump-starting many fintech 1.0 clients like Transferwise, Revolut, Azimo and World Remit, which were born out of a demand by consumers to take more control over their finances and after the trust lost in banks in the aftermath of the credit crunch.
However, the Currency Cloud experience gave me an insight into how the old world banking industry worked, with a realisation that both the banking infrastructure and the banking industry itself, was clearly not adapted to the new digital world, and certainly had no clue about what a well designed API led business should look like. So, this experience led me to co-founding my current startup Railsbank, focused on solving this industry pain point for customers.
Scaling Enterprise FinTech: with Maximilian Schausberger of Elevator Ventures
1. A year since the first lockdowns- is this is a good time to be building or scaling an Enterprise FinTech (/InsurTech) firm in Europe?
Despite all the difficulties that 2020 has brought for entrepreneurs, some sectors have also benefited. We see Enterprise FinTech benefiting from an increased need for digitalization and for efficient operations in banking and insurance. As an example from the financial sector, Raiffeisen Bank International saw double-digit growth in its mobile banking users over the first half of 2020 (see here). This also creates many opportunities, which seem to have fueled investor appetite in 2020.
These two Q&As are part of Scaling Enterprise FinTech | The Handbook, featuring Q&As on the journey to scale, lessons learnt etc. with 16 founders and 10 leading investors.
London fintech StepEx raises £1.1M to transform postgrad student finance
Finance for postgraduate and technical qualifications remains outdated and prohibitive. Notably, the best courses are too expensive for a majority of potential students and Government loans do not cover these costs.
Outcome-based finance is an effective solution and opens up enormous economic opportunities for people who would otherwise not be able to pursue these courses that unlock significantly higher earning potential. It is claimed that this model could increase cumulative lifetime earnings by as much as £8 billion.
Foros raises €1.2 million, sees the forest for the trees
Vilnius-based green investment platform Foros has taken on its first outside funding and raised €1.2 million. The fresh funding is slated to help the platform further develop its forest investment and management services available in Lithuania and Latvia, push expansion into Estonia and Finland, and develop a forest carbon impact calculator.
Founded in 2017, the Foros platform facilitates the buying and selling of forest land via auctions as well as a forest management service, aptly titled Foros Grow. This service provides for sustainable tree growth through selective logging, removing weaker trees from a forest, thus promoting the long-term health and growth of stronger trees.
Amsterdam-based fintech Dyme of ‘Dragon’s Den’ fame raises €2M from Peak Capital, others
Keeping track of finance can be a tricky thing! People have much more money today than they did generations ago, but the amount of knowledge on managing money hasn’t kept pace, say experts.
Thanks to technology, we have a lot of convenient ways and solutions to stay on top of our personal finances. A host of new consumer finance brands is transforming how people spend, manage, and save their money.
Traydstream Raises $8M in Series A Funding
Traydstream Limited, a London, UK-based fintech company, raised US$8m as part of a Series A funding round.
Backers included institutional and private investors.
The company intends to use the funds to continue to expand operations and its business reach.
Led by CEO Sameer Sehgal, Traydstream is a global provider of an AI powered platform to digitalize and automate trade finance document checking. The company combines Machine-learning and Artificial Intelligence (AI) with Natural Language Processing (NLP) to create intelligent pattern recognition and near-instant verification of regulatory compliance.
White label fintech platform Toqio secures $9.4M Seed led by Seaya and Speedinvest
The upside of the Open Banking regulations which have swept jurisdictions like the UK and the EU is that many more challenger banks have appeared. The headache for either incumbent banks or for upstart startups is the very proliferation of these new banks and financial tech products.
But as we know, in gold rushes, the people selling the picks and shovels usually win. Thus, startups have turned their attention, not to launching full-stack banks, but to full-stack platforms that other people can launch their fintech startups and products upon.
Remittance service Monisnap raises €10 million
According to the World Bank Group, approximately 1.7 billion people, or roughly 22% of the global population do not have a bank account. When you narrow that number down to emerging populations, the figure jumps as high as 75% in some cases. With these numbers front and centre, it’s not hard to see why sending money back home, or remittances as the process is formerly known, make up as much as 28.4% of the GDP in some parts of the world.
Founded in 2017 with the goal of providing a full-featured set of financial services to those that seek to remit money back to their relatives, Monisnap has raised €10 million from Serena and a number of undisclosed existing investors. To date, the startup has raised €12.5 million.
Insurtech Hyperexponential Receives $18 Million in Funding Round led by Highland Europe
hyperexponential (hx), a UK-based Insurtech, has raised $18 million in a funding round led by Highland Europe, according to a note from the company. hx states that it is already profitable and the funding will help boost growth and build out its software for the commercial insurance industry.
hx reports that it has created a web-based SaaS platform called Renew that is custom-built to assist actuaries, data scientists, and underwriters.
hx was launched in 2017 by co-founders Amrit Santhirasenan and Michael Johnson, both software engineers and actuaries with more than a decade of experience in senior roles at leading insurers. hx says revenues have increased up to threefold each year since launch.
Danish B2B fintech Pleo hits unicorn status
Pleo, the Danish outfit behind an expense management tool and linked smart company cards, has hit a $1.7 billion valuation thanks to a $150 million Series C funding round co-led by Bain Capital Ventures and Thrive Capital.
Founded in 2015 by former staffers from Danish startup Tradeshift, Pleo provides firms with an out-of-the-box business spending platform that offers smart company cards and automated expense reports for employees.
The new funds will be used to continue growing Pleo’s 17,000+ strong customer base as it aims to reach one million engaged users by the end of 2025.
Accenture Buys Sentor
Accenture (NYSE: ACN) acquired Sentor, a Stockholm, Sweden-based independent provider of cyber defense and managed security services.
The financial terms of the deal were not disclosed.
Sentor’s approximately 80 cybersecurity professionals will join the Accenture Security team in Sweden, extending the firm’s local resources and capabilities and addressing the demand for local cybersecurity and managed security services.
Founded in 1998 and led by Åse Holmberg, CEO, Sentor is a provider of cyber defense and managed security services. The company’s portfolio includes advisory services, security testing, managed detection and incident-response capabilities, powered by a 24/7/365 security operations center in Stockholm.
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