It’s amazing to see new people keep subscribing to Pocket Change. It’s truly flattering, but it’s also an obligation to keep my New Year’s resolution. Expect that you will get the fintech newsletter in your inboxes more frequently from now on.
Hello, Amazon. Goldman Sachs is ready to collaborate with Amazon to finance small business loans (for Amazon merchants). The project could kick off as early as within a few weeks (more here). Also, Techcrunch breaks down the reasons why fintech is so focused on loans to SMEs (paid content).
Let’s double. Speaking of Goldman Sachs, the company is thinking about positioning itself as a “banking-as-a-service” provider. The company has recently shared its five-year plan to double consumer deposits at Marcus, an online savings platform, to around $125 billion.
Records everywhere. In 2019, the UK fintech companies raised $4.9bn of capital. This is more than the rest of the top 10 European countries combined. Greensill and OakNorth led the way raising over $1bn in total. Full report by Innovate Finance. Australia has followed the trend, seeing record fintech funding in 2019 as well, with AMP and Athena Home Loans as frontrunners.
Adyen on a signing spree. One month after closing a global deal with McDonald’s, the Amsterdam-based payment platform scored an exclusive partnership with Subway to power their payments online and in-store in over 20,000 stores in North America.
#Visa bought #Plaid to quietly kill it. Who makes money for Visa? Their issuing banks (and credit unions). Who are Plaid's customers? Neobanks and non-banks wanting to pull deposits out of existing banks and credit unions. In the end, organizations follow the most direct economic incentives.
If you ask me, I don’t subscribe to this point of view. I believe it’s more about “skating where the puck is going to be” (as the quote by Wayne Gretkzy goes) and gaining access to customer data to build new products or services on top of that.
Yet, there are two sides to the record-breaking story. The large chunk of the money is going to scaleups, that is fast-growing and mature startups (e.g. Wefox, Lemonade, Hippo), leaving the new players with peanuts.
We can witness the same trend in Europe, where three deals accounted for half of the capital raised in 2019 – WeFox alone took 25%.
One additional key point by our friends at astorya.vc:
“The majority of such startups are trying to just build better landing pages and ads retargeting to sell in the B2C model (MGA). Little or no technology (e.g. data science for risk underwriting) raises the question of whether these are tech startups or just specialized marketing agencies.”