This is it. The end of 2022, the year which started quite promising after all the COVID-19 regulations being lifted (in case you have forgotten – Covid also existed in 2022), but it all soon started to crumble down as Russia attracted Ukraine, global inflation spiked up, interest rates followed, and the crypto market crashed deeply down.
However, leaving all the negativity behind, the 2022 fintech rollercoaster had ups and down, and served us some very interesting stories. In this article, we will look over our selection of the most important and compelling global fintech news, funding rounds, company acquisitions, and regulations. Have a read!
Top 5 fintech news
FTX that’s a crash
The FTX collapse is the latest in a line of crypto failures in 2022 and the biggest so far, with billions missing and 1.2 million account holders turned into creditors. It will take years to settle this bankruptcy and the clients’ outlook for recovery is bleak (INNOPAY).
FTX collapse made large tokens sink at an unprecedented rate. FTX’s troubles have had a profound effect on the U.S. crypto market. Bitcoin’s price dropped below $16,000 twice in November due to FTX’s issues. On Nov. 9, Ethereum fell below $1,100. On Nov. 9, CoinDesk reported that Alameda held a lot of Solana, sending it below $13. On Nov. 13, Solana fell below $13, losing approximately $700 million in assets. On Nov. 10, Tether devalued by 3%. Thus, investing in cryptocurrency became dangerous. And while Sam Bankman-Fried’s Prison Sentence Could Stretch to 115 Years we still live in a world where crypto consumers are barely protected…
Texting on Private Apps Costs Wall Street Firms $1.8 Billion in Fines
Morgan Stanley, Goldman Sachs, and 14 other largest financial institutions were charged $1.1B to US regulators. In September, the Securities and Exchange Commission (SEC) fined 16 of Wall Street’s major financial organizations $1.1 billion for failing to supervise employee correspondence. The large banks that admitted wrongdoing and settled with the regulator include Bank of America, Barclays, Citigroup, Goldman Sachs, and Morgan Stanley. Each will pay $125 million to the S.E.C. (The New York Times)
Layoffs in unicorn land
With Investments and funding decreasing rapidly, Fintechs of all sizes faced challenging economic and market conditions this year as they adjusted to the post-pandemic ‘new normal’, causing many to initiate waves of job cuts. Klarna and Stripe laid off over 10% of their employees, while Robinhood, Plaid, and Swyftx had to say goodbye to more than 20% of their team… Seems like fintech companies are not only saying goodbye to 2022…
Ethereum goes greener!
In 2022, Ethereum ticked off several boxes on its checklist toward creating a global computer and decentralized financial system. Most notably, the second-largest blockchain finally completed its radical shift to a new, vastly more energy-friendly system for powering its network. In other words, Ethereum managed to merge just in time before the big crypto collapse and took a ‘greener’ way down the crypto market hole.
But the year was also marked with problems – from concerns around censorship to record-shattering hacks on Ethereum-linked infrastructure. To find the major themes and events that have defined Ethereum’s rollercoaster year read more here.
13 Major European Fintechs Launch The Open Finance Association
A group of 13 fintech including the likes of Token, TrueLayer, Plaid, Worldline, and Yapily have launched the Open Finance Association (OFA) to further open up financial data and payments through API tech.
As explained by association officials in the press release announcing the launch, with the introduction of PSD2 in 2016 consumers and businesses were given the right, for the first time, to access their payment accounts via trusted third-party providers (Open Banking). Open Finance is presented as the next step in the evolution of Open Banking and it promises to give consumers and businesses greater control and visibility of their economic lives. Read more
Top 7 Fundings
More than €100 billion were invested in European tech startups, despite the backdrop of global political and economic instability. The environmental and social impact of startups became more important, with 35% of European VCs increasing their focus on what their investments can do in society. And 11 impact startups became unicorns this year, from a total of 31, and 60% of them were based in the UK, France, Sweden, or Germany. (TFN)
FNZ became one of the UK’s decacorns with a $1.5 billion round
London-based fintech decacorn is FNZ. It partners with financial institutions to enable them to provide multi-channel wealth management services to their clients across direct, intermediated, and workplace channels. The wealth management platform provider raised $1.4 billion in February this year. The investment round was led by Canada Pension Plan Investment Board and Motive Partners. Read more
Monzo bounces back post-pandemic with $500M funding
Monzo, the London-based digital bank, was among those to be significantly impacted during the COVID-19 pandemic. Its annual losses more than doubled. Monzo went to the extent of being uncertain to continue its operations due to the pandemic. Neobank Monzo, continued to raise funds and is valued at $4.5 billion now, making it Europe’s third-largest challenger bank. Read more
Checkout.com to become UK’s most valuable private tech company, raises $1B at $40B valuation
And at the beginning of the year, London-based payments processor Checkout.com raised $1 billion in series D funding to increase its valuation to $40 billion. Checkout.com will use the investment to strengthen its already solid balance sheet. Also, it will drive three key initiatives including its growth plans in the US, continued evolution of its proprietary technology platform and remain on the cutting edge of Web3. Read more
Bulgaria gets its first unicorn as Payhawk pecks $100M in Series B extension round
Payhawk, a platform that combines and simplifies processes for finance teams, Back at the beginning of March 2022 closed a Series B round with an additional $100M that made it Bulgaria’s first unicorn. The funding will enable the company to accelerate its presence in the mid-size enterprise market and continue its global expansion plans. The fresh capital will be used to further grow Payhawk’s product team by adding 60 additional senior software engineers in Sofia from the top 1% of the market. Read more
Italian BNPL platform Scalapay raises $524m in Series B funding
Scalapay, an Italian start-up that enables customers to buy now, pay later (BNPL) without interest, first raised $497 million in Series B funding in February, followed by a $27 million extension in May. The company had said that the new funding would go towards hiring new staff, product development, and brand building. Founded in 2019, the company has raised $727 million in funding to date. It hit unicorn status earlier this year with a valuation of over $1 billion. Read more
Biggest NL fintech Funding title goes to – $185M in Series C!
Mews, a leader in hospitality technology, just receantly announced it has closed its Series C round at $185 million. The equity investment was led by Kinnevik and the Growth Equity business within Goldman Sachs Asset Management with participation from Revaia, Derive Ventures and Orbit Capital; and returning investors including Battery Ventures, Notion Capital, Salesforce Ventures, Thayer Ventures, and henQ. This latest round brings the total amount raised to date to $225 million. The funding will be used to accelerate product innovation, global expansion and M&A. Read more
One more NL fintech funding star – in3 and $85.3M in Series B
in3, an Eindhoven, Netherlands-based Buy-Now-Pay-Later’ (BNPL) fintech company, raised $85M in Series B funding. The round was led by Force over Mass, Waterfall Asset Management and Finch Capital. The company intends to bus the funds to scale operations and business reach. Read more
Top 5 merges and acquisitions
Ranging from startups to big players, moves such as merging or acquiring other companies have been made by all. Let’s reflect on the industry’s biggest mergers and acquisitions (M&A) from 2022.
Dalberg strengthens its innovation capabilities through the acquisition of Ravel Innovation
Hitting halfway through 2022, one of the biggest M&As to take place was in the investment space. Dalberg, a social impact advisory group, acquired Ravel, a Singapore-based company that designs and runs corporate innovation programs. It claimed the new offering would help investments in innovation be more socially impactful. Dalberg aimed to incorporate Ravel’s innovation capabilities and networks into its global advisory, sector, and regional expertise. Read more
J.P. Morgan to acquire Renovite Technologies, Inc.
One of the largest organizations in fintech, J.P. Morgan made significant moves in 2022 too. In September, it signed an agreement to acquire cloud-native payments technology company Renovite. The strategic acquisition helped J.P. Morgan Payments build its next-generation merchant acquiring platform, bolster the firm’s payments modernization strategy and support its journey to the cloud. Renovite officially became part of J.P. Morgan Payments. Read more
SoFi Technologies, Inc. Acquire Technisys
SoFi Technologies acquired Technisys for $1.1B. This all-stock purchase represented 10% of SoFi’s market capitalization in February. SoFi now owns Technisys’ main banking platform, which powers mobile banking apps, opens accounts, and tracks consumer deposits. SoFi is offering offers personalized financial services to its banking customers using Technisys. It will also allow other banks and FinTech companies to use the Latin American bank-dominated platform. Read more
VISA pacing its way towards open banking market by aquiring Tink
Visa bought Tink, which has been a leading fintech startup in Europe, to establish itself in a fast-growing open banking market. The current regulations allow the largest US card network to access European customers’ data at competing institutions, if the customers have granted consent. First announcing the deal in June 2021, the takeover builds on an existing strategic partnership between the two companies, and values Tink at more than $2 billion. Tink retained its brand and management team, and its headquarters remained in Stockholm.
Worldline acquired 40% stake in Online Payment Platform
Marc-Henri Desportes, deputy CEO of Worldline, says: This (deal) enables Worldline to get access to the exciting growth market of digital marketplaces and platforms via OPP’s European footprint and market leading scalable technology.” He added that with “OPP’s European footprint and market leading scalable technology,” Worldline can continue to work towards becoming a “truly global paytech leader.” Worldline is expected to close on the 40% acquisition by the end of 2022. The deal also includes a call option to buy the remaining 60% in 2026. Worldline has their shopping list ready for 2023.
Top News From Regulators Perspective
2022 has been a busy year for regulators, to say at least.
Are Markets in Crypto Assets (MiCA) regulations in progress?
The European Union is set to be the first major jurisdiction in the world to agree on how to regulate the digital asset sector, via its Markets in Crypto Assets regulation (MiCA). Under the recently agreed text, providers of crypto services – which means anything from trading to custody to fiat exchanges – will need a license and be monitored by a financial regulator from one of the EU’s member states. However, as of today, European Union lawmakers won’t vote on the Markets in Crypto Assets regulation (MiCA) until February, likely meaning further delays in the landmark licensing regime for crypto companies within the bloc, a spokesperson for the European Parliament has told CoinDesk. So, in 2023, are we there yet?
Digital Markets Act (DSA)
The rules have changed and the EU’s most significant update to digital business regulation since 2000 is now in force. Increased transparency and accountability are clear hallmarks of the new DSA. Think fast — because according to the Czech Republic Minister for Industry and Trade, Jozef Sikela, the Digital Services Act (DAS) could become “the gold standard” other countries will soon seek to emulate. Read more
EU’s Digital Operational Resilience Act (DORA) Wins Final Approval
European Union (EU) regulators have approved a new proposal to subject financial services firms to stricter regulations to prevent and mitigate cyber threats. DORA is aimed at bolstering the IT security entities, such as banks, insurance companies and investment firms operating in the bloc. From now on, financial institutions need to ensure that they will be compliant under the DORA otherwise they risk not insignificant periodic penalty payments. Were you prepared for DORA’s entrance?
Central Bank Digital Currency (CBDC) is taking off!
While the past year saw the value of the crypto market shrink to $1.4 trillion from its 2021 high of $3 trillion, governments around the world increasingly experimented with a different form of digital money — a national legal tender. Perhaps fearing that the future of money might pass them by, the central banks of 114 countries have this past year been undertaking a variety of investigative programs researching, and even acting out, the feasibility of issuing sovereign, virtual currencies backed by a federal banking system. As of December 2022, all G7 economies have now moved into the development stage of a central bank digital currency (CBDC). According to OMFIF’s annual report, “Future of Payments”, two-thirds of the central banks OMFIF surveyed said they would issue a CBDC within 10 years and none said they would issue one later than that. Are DeFi and TradFi finally finding their way toward something closer to UniFi?
Holland Fintech 2022 wrap-up
2022 to say at least has been an eventful year, both for the global fintech community and us. After 52 Newsletters, 12 Holland Fintech meetups, 30 other events, and the Amsterdam Fintech Week’22 we can’t wait to see what 2023 will bring for us and share with you what we have planned! As for now, we are sending you the best Happy New Year wishes from The Netherlands, Germany, France, Lithuania, and Portugal!