In the same way you can’t make lemonade without lemons, you can’t have fintech without internet connectivity.
The current climate is a catalyst for increased adoption of digital services in a compressed period of time – particularly financial services. Consumers and businesses are increasingly reliant on digital payments, trading tools, payroll, wealth management, insurance, and increasingly connected devices (aka IoT) - which all require an internet connection. In 2019, 75% of consumers used at least 1 fintech app (compared to 18% in 2015) and likely to be much higher in 2020.
Digital infrastructure has yet to evolve to meet the growing demand for global fintech consumers. In developed markets, connectivity is mainly supplied through fiber-optic broadband. In the US, 21m remain without any broadband connection at all, and almost one-third of rural Americans. In the UK, 63% of homes suffer broadband outages or significantly slower internet speeds at least once a month.
In developing markets, access to the internet is predominantly via mobile, also the means of delivery of digital financial services. In Africa, where only 24% of the population has mobile internet, mobile money transactions on the continent account for over 70% of the global transactions.
The World Bank estimates reaching internet penetration globally of 75% (from ~50% today) in all developing countries would add as much as $2t to their collective GDP and create more than 140m jobs around the world.
The same way the global economy long relied on a vast network of infrastructure from roads and ports the new economy will require the digital foundation in the form of electrical grids, mobile connectivity, and internet provision.
We don’t want to be hunting for data in the loo!
Rural areas promised better internet as the UK government pledges £5b towards speedy broadband - The Chancellor pledged £5bn towards speedy broadband in rural areas. The government also announced a £510m investment into 4G coverage. Read more
Tracking COVID-19’s impact on global internet performance (updated April 15) - Percent change compared to the week of March 2, 2020, some examples (fixed internet speed/mobile internet speed): Italy -12%/-8%, UAE +10%/-15%, US -5%/-3%, and UK -3%/+1%. Read more
Coronavirus exposes America’s broadband problem - 21m Americans remain without any broadband connection at all and it is especially a problem in rural areas: the Pew Research estimates that a third of rural Americans do not have broadband at home. Poor internet access in rural areas was already an issue before the pandemic. Read more
Airwallex - Australia based cross-border financial startup raised $160m in Series D financing led by ANZi Ventures and Salesforce Ventures. Read more
BioCatch - Tel Aviv based financial institutions-focused security startup raised $145m led by Bain Capital Tech Opportunities. Read more
Credit Kudos - London based credit scoring through open banking raised £5m in Series A funding led by AlbionVC. Read more
Everee - Utah based payroll software for SMBs raised $10m in Series A funding led by Origin Ventures and Signal Peak Ventures. Read more
Frank - New York based student financial aid platform raised $5m in an interim strategic round led by Chegg. Read more
NoBroker - India based property rental and buying marketplace raised $30m in a Series D extension led by General Atlantic. Read more
Onfido - London based virtual identity verification platform raised $100m in Series D funding led by TPG Growth. Read more
Previse - London based invoice factoring technology startup raised $11m in new funding led by Reefknot Investments and Mastercard. Read more
Robinhood - Menlo Park, CA based personal finance and brokerage startup is raising $200m of additional capital at an $8b valuation led by Sequoia Capital. Read more
Savi - Washington, DC based student loan wellness platform raised $6m in Series A financing led by Nyca Partners. Read more
Setu - India based API infrastructure provider for fintech raised $15m in Series A financing led by Falcon Edge and Lightspeed Venture Partners. Read more
Sprout.ai - London based insuretech claims management startup raised $2.5m in Seed funding led by Amadeus Capital Partners. Read more
Taxfix - Berlin based mobile tax filing app raised $65m in Series C funding led by Index Ventures. Read more
Trade Republic - Germany based no-fee brokerage app raised $67m in Series B financing co-led by Accel and Founders Fund. Read more
FinTech Collective Newsletter
Curated News with Context
Delivered every Saturday, the weekly newsletter, produced by our team, provides a tightly edited rundown of global fintech news, along with a bit of our original analysis.