News Briefing - Crowdfunding, SME And Alternative Finance

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1.UK – FinTech

Monzo Bank finds large footprints come at a cost in times of crisis. AltFi reports:

“Digital bank Monzo may see a nearly a 40 per cent drop in its valuation as it seeks its latest round of fundraising.

The latest suggested valuation places the fintech at about £1.25bn, a huge step down from its £2bn valuation it received in June last year following a £113m Series F raise. 

Monzo is looking to raise between £70m and £80m to help it weather the coronavirus-related storm, in news first reported by the Financial Times.

Despite the drop in valuation, AltFi understands Monzo was able to attract both new and existing investors for the raise.

In early April it was confirmed that Monzo’s founder and CEO Tom Blomfield would be forgoing his salary for the next 12 months and top executives would take pay cuts to ensure that their staff still received their salaries. 

Monzo has also had to furlough 295 members of staff amid the ongoing coronavirus pandemic.”

 

2. UK  - FinTech

Maxxia surveys the alternative-finance options for SMEs seeking funds.

 

3. UK – FinTech

AltFi reports on Freetrade, an investment platform that was launching its sixth crowdfunding campaign in May and was setting out to raise £1m.

“The investment platform has now hit over £5m from more than 5000 investors and has now set its sights on a £7m crowdfunding target.

According to Freetrade, the £1m initial target was reached in just over four and a half minutes after having raised an additional £3m from existing shareholders.

Freetrade’s latest crowdfunding effort is the largest to have taken place in the UK in 2020 so far and is its sixth on crowdfunding platform Crowdcube.

With Freetrade, customers can buy stocks in the likes of Amazon, Greggs, Tesla, Fevertree and Apple and can use an ISA to invest up to £20,000 per year in a tax-efficient account.”

4. UK – Equity

Ceros runs a comment piece on the Enterprise Investment Scheme from Deepbridge Capital.

“When contemplating taxefficient investments it is important to understand the similarities and, indeed, the variances between delivering advice on mainstream investing and issuing client recommendations to utilise unquoted early-stage stocks. 

One of the key differences to contemplate, and a key understanding that should be imparted by any good manager in the tax-efficient space, is that of the investment process. For example, how does the manager identify investment opportunities, what are those opportunities and what timescales are likely when it comes to deploying funds into those investments? 

Most managers in this space will likely source investee companies from a myriad of places, possibly including academia, corporate advisers, accountants, professional introducers, incubators, etc.”

 

5. US – FinTech

 

Crowdfundinsider looks at job security in the US, UK and elsewhere in the FinTech sector.

“Although certain Fintech firms may be dealing with a funding freeze or they may be generating lower revenues, the UK’s financial technology industry most likely won’t experience as many problems due to COVID-19, when compared to other sectors. This, according to a recent report from research firm Beauhurst.

The research study by Beauhurst reveals that about 22% of UK-based Fintech jobs may be under immediate or moderate risk of being lost because of the Coronavirus crisis.

Although this may potentially have serious consequences, it’s still only a small fraction of the estimated 61% of jobs currently at risk in the UK, as tracked by Beauhurst’s database of the country’s 28,000 most innovative or promising startups.

The percentage of Fintech jobs at risk is also significantly lower than the 40.7% of early-stage tech startup jobs that may be lost due to the pandemic.

Job security for Fintech professionals may be greater than other sectors because there’s a reduced risk of these businesses falling apart during these challenging times. That’s because most Fintech services are offered completely online, so these companies don’t normally require a physical presence to serve customers.

Only 3% of UK-based Fintech service providers are at “high risk” due to the COVID-19 outbreak, according to Beauhurst’s study. This figure is considerably lower than the estimated  17% of “high risk” jobs in the nation’s larger startup ecosystem.”