Visa Buys Tink for €1.8B; Mollie Banks €665M at a Valuation of €5.4B; Revolut’s Users & Revenue Grows, Together with Losses

Hey, 👋 fellow FinTech enthusiasts and entrepreneurs! What a week it was in Finance & Technology... The best Weekly FinTech Digest yet is out!

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

Last week (21-25 June) was crazy hot and super interesting one in FinTech. The biggest news of the week undoubtedly is Visa buying European Open Banking platform Tink in an attempt to fill the Plaid-shaped hole 👀💸; Mollie, one of the fastest-growing payment service providers in Europe, has sealed a €665M Series C funding round at a valuation of €5.4B (Stripe competitor in the making? 🤔); while Revolut has shared its annual report for 2020 giving some interesting insights into its numbers 📊, and other super interesting news and developments.

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

Visa Buys Tink for €1.8B

Visa is to acquire the European Open Banking platform Tink for €1.8B.

The move by Visa fills a Plaid-shaped hole in its portfolio after a $5.4 billion deal to acquire the US data sharing outfit was scrapped following pushback from regulators.

Tink connects to more than 3,400 banks that reach over 250 million bank customers across Europe. Founded in 2012 in Stockholm, the company's 400 employees serve more than 300 banks and FinTechs in 18 European markets, out of offices in 13 countries.

Under the agreement with Visa, Tink will retain its brand and current management team, and its headquarters will remain in Stockholm, Sweden.

The transaction is subject to regulatory approvals and other customary closing conditions.

THE TAKEAWAY

FinTechs move fast - Visa moves faster 🚀 The move by Visa comes only a few months after the giant abandoned its acquisition of Plaid, another popular open banking startup. Originally, Visa planned to spend $5.3B to acquire the American startup but the company had to call off the acquisition after running into a regulatory wall. With the acquisition of Tink, Visa is hitting two birds with one stone. First, it’s a push to diversify revenues beyond credit card payments (where it’s one of the leading players). Second, it’s another value-add for their bank customers that could easy add new offerings. However, given that Tink is one of the leaders in Europe when it comes to Open Banking, it would make no surprise that antitrust authorities might be willing to take a closer look at this deal.

Mollie Banks €665M at a Valuation of €5.4B

Mollie, one of the fastest-growing payment service providers in Europe, has sealed a €665M Series C funding round at a valuation of €5.4B.

The round was led by funds managed by Blackstone Growth (BXG), Blackstone’s growth equity investing business, and included EQT Growth, General Atlantic, HMI Capital and Alkeon Capital. TCV who led a €90 million Series B investment in September 2020 also participated in the funding round.

The funding takes the total amount raised by the Dutch-headquartered company to €780 million

Launched in 2004, Mollie serves more than 120,000 monthly active merchants of all sizes across the continent. In 2020, the firm processed more than €10 billion in transactions and is on track to handle more than €20 billion during 2021. Mollie counts Deliveroo, Gymshark, Wickey and Otrium as customers.

THE TAKEAWAY

Stripe has a competitor in the making? 🤔 Payments is still a very hot space, and there’s a reason why. The top 10 players in payments have 50% of the market, but the other 50% is held by about 5,000 players. Stripe isn’t among top 10 - it’s among those 5,000. This essentially means that for the the companies like Mollie there’s still a lot of opportunity to grow and consolidate, while also underscoring just how big the market is for everyone.

Revolut’s Users & Revenue Grows, Together with Losses

UK FinTech upstart Revolut saw losses almost double last year as it pushed out more services to an increasingly global customer base.

Revolut has shared its annual report for 2020 that reveals that its user base grew steadily in 2020, with retail customers hitting 14.5 million compared with 10 million in 2019—and the company subsequently reached15.5 million in Q1 2021.

Other noteworthy numbers:

• Its business accounts crossed the 500,000 mark in 2020, more than double its 2019 count of over 220,000. 
• Its 2020 annual revenue grew 33.8% year over year (YoY), hitting £222.1 million ($284.87 million).
• Its annual loss soared by 92.98% YoY as well, reaching £206 million ($264.21 million), which the company attributed mainly to ballooning administrative costs. 

What’s interesting here is that the neobank’s paid account subscriptions revenue provided a larger slice of its top-line pie by contributing 33.86% in 2020, up from 23.79% in 2019.

Revenue from Revolut’s other large named segments—Card & Interchange, and Foreign Exchange & Wealth—also grew in absolute numbers, but their share of total revenue shrank slightly. 

THE TAKEAWAY

Revolut is blitzscalling and taking the Amazon approach to profitability. There’s almost nothing that Revolut hasn’t done yet (think crypto, stocks, credit/debit cards etc.). They are burning a lot of $$$ to achieve that, but it seems that their backers are confident and long-term looking. Maybe financial super app makes sense after all? 🤔 The challenge? Heavy reliance on its home market. Revolut still relies primarily on its home market, even while it expands abroad: 88.42% of its 2020 revenue came from the UK, 10.24% was sourced from the European Economic Area, and just 1.34% came from all other markets. 

Extra Reads & Quick Bites for Curious Minds🧠

• Website builder Wix has announced entering the point-of-sale business with Wix POS. The hardware and software bundle will help business owners accept brick-and-mortar payments while staying connected to their Wix storefronts online. The new offering comes through partnerships both with Hewlett-Packard, which produces the hardware tablet, and with Stripe, whose terminal card reader is powered by Wix Payments.
• UK-based supermarket chain Tesco has launched Clubcard Pay and is giving users extra points when shopping at Tesco, as well as rewarding spending at other shops.
• Toro, the investment platform of Santander Brazil, has acquired Mobills and Monetus to expand its operations in the country.

💸Money Moves💸

• US-based Splash Financial, a student loan refinancing marketplace and technology platform, has raised $44.3M during an investment round.
• Unit has raised $51M in a Collection B led by Accel to launch a product aimed at allowing companies to create live bank accounts and issue cards in minutes.
• Openpay, an Australia-based Buy Now, Pay Later (BNPL) provider, is set to acquire Payment Assist, a UK-based automotive BNPL provider, in a deal worth up to $39.8M.
• The South Korean operator of mobile financial app Toss has raised $410M in fresh funding, which values the company at $7.4B, Reuters cited Viva Republica.
• Small business-focused neobank Judo Bank has secured $174M in capital, as per smartcompany.com.au.

Quote of the Week/Food for Thought💭

Wrong answers only! 👀

Graph of the Week 📈

European start-ups have raised EUR 43.8B in the first 6 months of 2021, figures from the Dealroom show. VC funding in the continent has already surpassed the record EUR 38.5B euros invested in all of 2020. More notably, European tech firms are pulling in far larger sums of money per investment than in previous years.

Week in Brief

Visa is to acquire European Open Banking platform Tink for €1.8B.

Mollie, one of the fastest-growing payment service providers in Europe, has sealed a €665M Series C funding round at a valuation of €5.4B.

UK FinTech upstart Revolut saw losses almost double last year as it pushed out more services to an increasingly global customer base.

Continue reading by subscribing to Linas's Newsletter. You will receive fresh news about FinTech with hot takeaways every week.

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

👉 The Perfect Pitch Deck: How Coinbase Raised Seed Capital and Began Journey Towards $100B Worth Public Company

👉 Cutting Through the Noise: Bitcoin Fundamentals & Why it Was Created

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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 the company's expansion into Europe, I'm an active member of the FinTech community and a TechFin evangelist.

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