Google Challenges Venmo & the Likes, Making Pay a Super Money App; African FinTech Chipper Cash Raises $30M Backed by Jeff Bezos; Starling Hits Profit

Hey 👋 fellow FinTechers! Hope you are all keeping well and safe during these difficult times.

P.S. Before we dive into what happened in FinTech last week, check out my Connecting the Dots Newsletter, where you will get much more. Every Friday👇🏼

Last week (16-20 November) was super hot and interesting one in FinTech this year. Google undoubtedly took all the attention with their complete redesign of Google Pay into a super money app. Further, Africa continues being hot FinTech destination with Chipper Cash raising $30M backed by Amazon’s own Bezos; Starling Bank became the first neobank to hit profitability, and more exciting developments and insights.

Without further ado, let us dive into what has happened in the financial technology sector this week. Let’s connect the dots.

Google Goes Againts Venmo & the Likes, Turning Pay Into a Super Money App

The Google Pay app has been given a makeover, growing from a simple payments tool to a full-blown financial management service and, from early next year, a gateway to a full bank account.

The hottest news this week undoubtedly came from Google that has completely redesigned their Google Pay app making it a super app📱

The revamped app is being rolled out in the US this week. It's a three-tab story:

💸Pay: tap-to-pay, peer-to-peer payments, and searchable transaction history. Google says it won't sell data or share it for ad targeting (I wouldn’t be too sure about this).

🔍Explore: shows rewards and discounts at shops. If you allow Pay to analyze your transactions, it'll also show personalised offers.

📊Insights: lets you connect your bank accounts for a spending overview, like Mint. You can even let Pay crawl your Gmail and Google Photos to find receipts.

THE TAKEAWAY

Every financial apps wants everything from you. The same is with Google Pay that wants to achieve "all-in-one" app status. Having a whopping ~150 million users in 30 countries, Pay is going head-to-head with the likes of Venmo, SquareCash App, Revolut and the likes. Is Google going to eat not only banks' & FinTechs' lunches, but their breakfast too? 🤔

African FinTech Startup Chipper Cash Raises $30M Backed by Jeff Bezos

Jeff Bezos's personal VC fund has joined a $30M Series B funding round for African cross-border payments startup Chipper Cash.

African cross-border FinTech startup Chipper Cash has raised $30M in Series B led by Ribbit Capital with participation of Amazon's own Jeff Bezos 💸

Founded in 2018, the company offers mobile-based, no fee, P2P payment services in 7 countries: Ghana🇬🇭, Uganda🇺🇬, Nigeria🇳🇬, Tanzania🇹🇿, Rwanda🇷🇼, South Africa🇿🇦 and Kenya🇰🇪

What's interesting is their business model. Parallel to its P2P app, the FinTech also runs Chipper Checkout - a merchant-focused, fee-based payment product that generates the revenue to support Chipper Cash’s free mobile-money business📲

The company has scaled to 3M users on its platform and processes an average of 80,000 transactions daily 🤯

THE TAKEAWAY

Africa is very hot VC destination right now, especially when it comes to FinTech. This newest funding round by Chipper is yet another brilliant illustration of the enormous potential and innovation happening in Africa nowadays.

Starling Bank Hits Profitability

Starling Bank has hit a rare neobanking milestone, achieving break even in October and on course to return monthly profits from here onwards.

Founded in 2014, Starling Bank just became the first neobank to breakeven in Europe.

Starling was voted Best British Bank in 2018, 2019 and 2020. Its retail banking app offers personal, business, joint, Euro, USD, child and current accounts on Android and iOS. The Starling Marketplace offers customers in-app access to third party financial services.

With nearly 1.8 million accounts, £4 billion in deposits and £1.5 billion of lending, the neobank has hit break even in October and fully expect to be monthly profitable from here onwards on an operating profit basis.

Starling generated £9 million of revenue for the month of October 2020, which represents an annualised run rate of £108 million. This thus gave them us a positive operating profit of £0.8 million for the month of October 2020, or £10 million on an annualised basis.

THE TAKEAWAY

Challenger banking can and should be a profitable business (unless you are doing charity), and Starling has shown that it’s possible. Since nobody has done it before, this should bring some serious confidence to their investors and might potentially explain rumours on their interest in raising a mega-round soon. At the end of the day, Starling's ultimate goal is a float on the London Stock Exchange. And I’m confident they have all the tools to achieve that.

Extra Reads & Quick Bites for Curious Minds🧠:

• Shopify has announced a partnership with Alipay to support merchants with cross-border payments. The new payment gateway will allow Shopify merchants to accept payments through Alipay from more than 1B annual active users in China alone.
• The UK's Financial Services Authority has issued a warning to would-be investors in Lanistar, a much-hyped FinTech startup aiming for a £1B valuation, stating that the firm is providing services or products without authorisation.
• BNP Paribas Asset Management has launched a service that lets users access voice-activated market commentary and thought leadership through Amazon Alexa-enabled devices.

Graph of the Week

What's a bigger problem: Student loans or credit card debt?

Week in Brief

The Google Pay app has been given a makeover, growing from a simple payments tool to a full-blown financial management service and, from early next year, a gateway to a full bank account.

Jeff Bezos's personal VC fund has joined a $30M Series B funding round for African cross-border payments startup Chipper Cash.

Starling Bank has hit a rare neobanking milestone, achieving break even in October and on course to return monthly profits from here onwards.

Continue reading by subscribing to Connecting the Dots Newsletter. You will receive fresh news about FinTech with hot takeaways every Friday.

P.S. You might enjoy my earlier pieces as well:

👉 These are the Best Performing Stocks of the Last Decade

👉 Welcome to the Google Bank - Your Everyday Banking from Google, NOT a Bank.

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About: I am a business developer, sales professional, FinTech strategist, as well as Cryptocurrency and Blockchain enthusiast. I'm highly passionate about Financial Technology and Digital Innovation, and strongly believe that it will change the world for the better. Apart from my daily job at a global payments startup where I'm leading company's expansion into Europe , I'm an active member of FinTech community and a TechFin evangelist.

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