WhatsApp has 2b customers around the world and 400m in India alone. Facebook acquired the messaging app for $22b in 2014 and has yet to turn the faucets on to monetize its prized asset.
The path to convert eyeballs into dollars for a consumer internet startup has historically been through ads. Due to privacy concerns, Whatsapp was forced to scrap that attempt and is joining the inevitable movement of offering financial services as a meaningful lever for revenue growth.
WhatsApp’s payments business in India will pilot with 10m users via UPI (United Payments Interface). UPI was launched as a real-time inter-bank payment system. Just three years after its inception, the value of transactions through UPI represents 19% of India’s GDP, having amassed over 100m users and processed 1.25b transactions in March alone. Its success has led the US Federal Reserve to propose a real-time gross settlement service.
With the payments revenues limited due to the cap on merchant fees by UPI, the path to unlocking value lies in integrating a full suite of financial services. Whatsapp declared its intent to the local regulator to provide credit or loans (the same week Amazon launched PayLater in the country), in addition to launching message-based e-commerce orders with Jio a week after investing ~$6b in the telecom giant.
Financial products may become a foundational part of every technology company and large consumer brand – and once the faucet is open, it is tough to turn it off...
DeFi sees its first major token distribution with Universal Market Access listing - Exciting times ahead for DeFi (decentralized finance) with portfolio company UMA listing its decentralized governance token on the decentralized exchange Uniswap, the first-ever Initial Uniswap Offering (IUO). Read More
Ocrolus adds senior technical leadership - Portfolio company Ocrolus has built out it's tech ranks. Joining the team are CTO Pieter Nel, who helped develop the world's first mobile instant messenger; VP of Product Douglas Melchior, formerly of AppNexus and Goldman Sachs; and VP of Analytics David Snitkof, former co-founder of Orchard (acquired by Kabbage). Read more
Sigma Ratings extending help during pandemic via complimentary due diligence checks - Portfolio company Sigma Ratings is offering state governments, hospital groups or multilateral development organizations complimentary due diligence checks during COVID-19. Read more
Flutterwave launches SME e-commerce portal - Portfolio company Flutterwave accelerated the development of Flutterwave Store, a portal for African merchants to create a digital shop to sell online. With the acceleration of digital commerce, the product will allow SMEs to go digital. Read more
Turning On The Faucet
Factorial - Barcelona based HR automation platform for SMBs raised €15m in a Series A round of funding led by CRV. Read more
Finom - Amsterdam based challenger bank for businesses raised a €6.5m Seed funding round led by Target Global. Read more
Flagstone - London based cash management platform raised $15m in funding led by OMERS Ventures. Read more
Okra – Nigeria based API for fintech apps raised $1m in pre-Seed financing led by TLcom Capital. Read more
Oriente - Hong Kong based infrastructure for digital financial services raised $50m in Series B funding led by Peter Lee. Read more
Qoala - Indonesia based insurtech platform raised $13.5m in Series A financing led by Centauri Fund. Read more
Stash New York based consumer finance and savings app raised $112m in a strategic round of funding from LendingTree. Read more
Wise - California based challenger bank for SMBs raised a $5.7m Seed round led by Base10 Partners. 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.