News Briefing - Crowdfunding, SME And Alternative Finance

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1. UK – FinTech 

AltFi asks whether FinTechs have been “left behind”:

“While the big banks have access to almost limitless cheap funding through the Bank’s term funding scheme at near 0.1 per cent interest, the majority of FinTechs use the capital markets. 

The idea was to have the big banks acting as middlemen to funnel the term funding scheme cash to FinTechs/alternative lenders.

Apparently, this plan has been rejected by the big banks because of ‘commercial challenges’ and their inability to make it work in terms of profitability. 

I’m not in the least surprised because why would the established banks want to help nimbler, more fleet of foot competitors that are better positioned to employ the new technologies that will drive better informed lending and have higher customer satisfaction scores, i.e. those that are going to eat their lunch.

The Government and Treasury have been quick to introduce a raft of measures (CBILS, BBLS, etc.) that is providing much need finance to help SMEs deal with the COVID crisis.”


2. UK – FinTech


Card fraud, compromised accounts and incentive abuse could be a thing of the past as fraud-fighting upstart Ravelin closed a £16.4m funding round led by new investor Draper Esprit, according to AltFi. 

“Existing investors Amadeus Capital Partners, BlackFin Tech and Passion Capital all took part in the round, with cash being used to drive Ravelin’s technology and wider adoption. 

“We have been very busy in the two years since our last funding round in 2018,” said CEO Martin Sweeney. 

“Our approach to tackling fraud and risk for enterprise-scale businesses has resonated with the market and we’ve grown our client base rapidly." 

Since 2018 Ravelin has helped its customers block 5.6m fraudulent accounts which attempted to place some $70bn worth of orders. 

Unlike rules-based fraud systems, Ravelin uses machine learning models that are tailored to each client to detect fraud at scale.”


3. UK – Equity

UK TechNews reports:

“Logically, a tech start-up using AI to detect misinformation and to provide a fact-checking service to combat fake news, has raised £2.5m to further develop its product in time for the US election.

The company has secured funding from NPIF – Mercia Equity Finance, which is managed by Mercia and is part of the Northern Powerhouse Investment Fund, and XTX Ventures – the venture capital affiliate of XTX Markets, a leading global algorithmic trading firm.”


4. UK – FinTech


FinExtra reports an international payments initiative:

“The emergence of new players such as Libra has thrown into sharp relief how slow, expensive and unreliable traditional cross-border payments can be, says a Bank for International Settlement committee report which also offers some ideas for improving the situation.

BIS's Committee on Payments and Market Infrastructures (CPMI) has put together the report in response to Saudi Arabia making the improvement of cross-border payments a priority of its G20 presidency.

The report offers 19 building blocks for resolving the longstanding frictions and challenges in cross-border payments, which have been left behind by improvements in domestic payments and could soon be disrupted by new entrants such as Libra.”


5. International – FinTech

A European appeals court has ruled that Apple does not have to pay a $15 billion tax bill that had been levied by the European Commission which accused the tech giant of abusing Irish tax laws. Venture Beat has more:

The Court of Justice of the European Union found that European Commission officials had not demonstrated that Apple had gained an unfair competitive advantage through the Irish tax laws. Following a lengthy investigation, the commission had previously issued a finding that Apple had massively reduced its tax bills by overstating the amount of its business in Ireland and ordered the company to reimburse Irish authorities up to $15 billion.”