Weekly update #62

Welcome to this edition of the weekly newsletter. The idea behind this is to gather all the information in the startup ecosystem in one place, with a special focus on the fintech market and the VC industry.

This is the first edition of 2025, coming after the Holiday season. While the newsletter is back, the Builder podcast will be live again in the upcoming weeks. In the meanwhile, you can recover the last episode here.

Coming back to us, during this short vacation, I’ve read a very interesting report from Simon Taylor of Fintech Brainfood, the “State of Fintech 2024”. In this very detailed work, you can find all of the main trends we saw together in fintech in 2024, with a snapshot of what’s coming in 2025. Here my main takeaways:

Let's start from a bold assumption: fintech is definitely back. There are many evidence to this statement, from the actual size and metrics of many fintech giants across the globe ( Nubank , Revolut , Stripe , etc.), to many indicators like the popular TWIF index, a price-weighted index of 15 publicly traded fintech companies. But the most interesting data I found is a very simple analysis of the numbers of fintech unicorns out there: there are approximately 221 fintech unicorns right now, of which only 33 went public in the last few years. The remaining 188 private unicorns account for approximately $703 billion in combined potential market cap. A very good sign, entering in what should be the year of liquidity events.

Another very interesting topic in this direction is that neobanks are now as big as traditional banks, and in many cases bigger. The picture above cannot obviously show many big players in this market, because they are not public yet, but I wanted to give you a couple of numbers for comparison: Nubank has now more than 100 million customers, and it is the most valuable bank in Latam. Revolut recently reached 50 million customers across 38 countries, hitting profitability for the first time. CashApp in the US has 57 million monthly active users. This is not an emerging market anymore, this is the new standard.

But obviously, it’s not all golden out there. Two big threats are coming for fintech overall, and banking in particular: frauds and credit risk. Financial crimes related to scams and App fraud are growing like never before, with a +44% in the last 4 years, while banks are becoming increasingly more reliable for customer losses to scams. Credit card loan risk margin has increased +34% from 2021 to 2023, making it harder for banks to actually provide and benefit from credit to retails. From a regulatory point of view, in the UK we saw the UK Reimbursement going live, trying to protect retail users from scams, while in the US the United States vs Citi in the SDNY may create a similar precedent.

Finally, a very interesting trend to follow for 2025: stablecoins are becoming the new trend in payments. After Stripe’s $1.1 billion acquisition of Bridge in 2024, there is a huge topic on the table as they move from trading pair to payments rail. It seems that they finally found their product market fit in the payment vertical, with volumes rising and more use cases coming day after day. This is for sure one of the main trends I will look closely at in 2025.

A final consideration from my side. We have been talking about neobanks and digital banking in general. This is a $3+ trillion industry, with many different players already positioning themself as global leaders, think about Revolut or Nubank. My question here is: why don’t we see a regional champion in the US? Chime is going to be public next year, and it is probably the best option there, but still they are far behind giant like Nubank or Revolut, and also behind different services like CashApp. I am starting to wonder if we will finally see a foreign company taking the lead in financial services in the US.

Anyway we saw some very interesting news in the market this week. Mastercard acquired recorded future, while NVIDIA completed the acquisition of Run.ai for $700 million. A lot of movement in India, with the government removing restrictions to WhatsApp use of payment services, as well as trying to limit the use of UPI for certain providers like Google Pay and PhonePe . In the meanwhile we saw a drama unfolding in Canada when accounting startup Bench Accounting shutted down right after Christmas, laying off 600 people, just to be acquired a couple of days later by Employer.com . In the VC industry, Accel closed a $650 million new fund to invest in India and Tacora Capital closed a $268.7 million second fund backed by Peter Thiel, but also some very interesting new funds from XGEN Venture and Juniper Capital . Finally, some very interesting rounds from fintech startups like ALLO , Clikalia , THENA , Alif Capital Holdings , Infinant | Grow Your Bank , Ver.iD and many more.

But let's take a closer look at the main news of the last seven days. 

Closed deals

• ALLO secures a $100 million debit facility to expand Bitcoin backed lending program
• Spanish startup Clikalia secures a $400 million facility from Macquarie Group
• Binance Labs announces a strategic investments in decentralized exchange THENA
• Central Asia fintech Alif Capital Holdings secures $20 million to expand Sharia-compliant financial service

Insights on the VC industry

• Tether.io invests $2 million to back Arcanum Capital new Web3 fund
• HashKey Group launches a $50 million grant program to support Web3 startups
• Juniper Ventures spins out of Climate Capital and closes a $10.5 million fund to invest in synthetic biology for climate
• Accel secured $650 million for a new fund to invest in India
• Tacora Capital, a Venture debt firm backed by Peter Thiel, secures a second $268.7 million fund

News on the market

• Canadian fintech Bench Accounting shut down operations and let go 600 employees
• Mastercard announced the acquisition of the cybersecurity company Recorded Future
• Netherlands based payment app Tikkie managed more than 157 million payments in 2024
• Indian government wants to limit UPI's transactions managed by fintech services like Google Pay and PhonePe
• HomeStreet Bank sells a $900 million loans portfolio to Bank of America
• India has removed restrictions on WhatsApp’s payments service, allowing the app to expands to 500 million users in the country
• After abruptly shutting down last week, accounting startup Bench Accounting will be acquired by Employer.com
• NVIDIA completes the acquisition of AI infrastructure startup Run:ai for $700 million
• After a successful Series A last year, Paris based fintech Aria is planning to expand to other European and UK cities
• Internal documents at SpaceX show that the company offered a very good deal at investors like Andreessen Horowitz and Gigafund in secondary shares sale
• Iraq's fintech QiCard strikes a partnership with Ant International to launch the super app SuperQi
• Checkout.com cuts a quarter of the workforce after a significant drop in revenue
• Thomson Reuters announces the acquisition of tax automation provider SafeSend for $600 million

A special look in the Italian market

• XGEN Venture annuncia un primo closing a €180 milioni per il suo Life Science Fund

And here some useful resources for everyone involved in the ecosystem:

Events you don’t want to miss

• Coming again in January!

You have a cool event you want to mention or to sponsor? Feel free to send me a DM.

Startups raising funds

• Loyyal - Loyalty platform from the MENA region, with entities in the US and South East Asia, provides a B2B2C platform to handle multiple loyalty programs and earn rewards all over the world. Raising a $6M Series A
• Freedhome - Proptech and fintech platform, enabling people to be able to gain profit from real estate by renting them to intermediaries. Raising a $1M seed round

• PopulaRise - The platform that allows companies of every dimension to promote themselves on social media through the collaboration with their clients. B2B2C SaaS. Raising $1M.
• Tutornow - Edtech that provides an online tutoring platform for students with learning disorders. Raising $500k to $1M.
• Weagle - B2B Tech startup that provides the very first browser designed for company, with total security for sensitive data. Raising $6 millions for their seed round.

• Shoppy Code:Gift card platform that offers a points based loyalty program. They share part of the profits coming from marketing budgets with their customers. Raising $500k.

Take also a look at the last edition of the newsletter, Weekly update #61