News Briefing - Crowdfunding, SME And Alternative Finance

crowd watching a football game

1. UK – FinTech 

 

Good growth, but a long path to profit ahead at Monzo. AltFi carries the tale: 

Monzo’s latest premium subscription service has got off to a good start.  

Monzo Plus now has over 50,000 active users since the subscription service’s launch just over a month ago, first reported by The Times and confirmed by AltFi’s own sources.  

While the numbers are encouraging, given paid for subscription’s are relatively new for UK consumers, particularly from fintech banks, the implied revenue run-rate at this level is just an extra £3m per year.   

The digital banking darling has a long way to go to help its premium offering move the dial on its growing losses.   

For argument’s sake, let’s say that Monzo Plus grows by 50,000 subscribers each month in its first three months (or the minimum length of time a user has to sign up to the service) to 150,000 users.   

Monzo’s latest premium offering would only bring in £9m in its first year, which doesn't even scratch the surface of its £113m losses recorded in its recently released numbers for 2019.” 

 

2. UK – FinTech 

Crowdfundinisider on a survey covering what looks like unsecured consumer refinancing with a new name (DeFi). 

 

“Blockfolio, which provides blockchain and crypto industry updates with detailed pricing, market data, news, and direct updates from key players, reveals that 32% of people responding to a survey said they do not know anything about decentralized finance or DeFi. 

The Blockfolio online survey, which gathered 8,897 responses, reveals that nearly a third or 32% of respondents said they have no involvement in DeFi, and they also asked a very simple question: What is DeFi? 

However, nearly 40% of those responding to the survey revealed that they’re “curious and learning” about DeFi. About 20% said they had tried these so-called decentralized finance services, while 10% claimed that they were deeply engaged with such platforms as they are involved in “high-farming crops.” 

DeFi aims to provide access to modern financial services, mostly borrowing and lending, but at more competitive rates. It also aims to eliminate the middlemen or intermediaries from transactions in order to potentially reduce costs and make the process more efficient. However, numerous reports of hacks and scams involving DeFi or decentralized cryptocurrencies indicate that the sector has not yet matured, and is a very high-risk area of emerging finance.” 

 

3. US – FinTech 

One of the first group of US direct lenders sells to Amex. 

“American Express has struck a deal to acquire the team and technology of online small business lender Kabbage. Financial terms were not disclosed. 

The card giant is acquiring Kabbage’s team and its full suite of financial technology products, data platform and IP built for small businesses. The firm's pre-existing loan portfolio is not included.

Kabbage was valued at more than $1 billion in 2017 after a $250 million investment from SoftBank. However, the firm has been battered by the Covid-19 crisis, laying off staff and suspending credit lines for some of its customers.

Its products include lines of credit, online bill payment, cash flow visualisation tools, e-gift certificates, and the ability to centralise funds through a recently launched business checking account.” 

 

4. US – FinTech 

 

The Federal Reserve Bank of Boston is working with the Massachusetts Institute of Technology (MIT) to develop a "hypothetical" digital currency platform. The UK government has “Britcoin” (really) under wraps – and US State and government-sponsored digital currencies have been waiting in the wings for years now. Finextra has the latest. 

“The partners are working on a "multiyear effort to build and test a hypothetical digital currency oriented to central bank uses," Federal Reserve governor Lael Brainard confirmed in a speech.

"Given the dollar’s important role, it is essential that the Federal Reserve remain on the frontier of research and policy development regarding CBDC,” says Brainard.

"The introduction of Bitcoin and the subsequent emergence of stablecoins with potentially global reach, such as Facebook's Libra, have raised fundamental questions about legal and regulatory safeguards, financial stability, and the role of currency in society. This prospect has intensified calls for CBDCs to maintain the sovereign currency as the anchor of the nation's payment systems," she continues.

However, she stresses that the Fed has not made a decision on whether to undertake the "significant policy process" that would be required to actually begin moving towards the issuance of a CBDC.” 

 

5. International – FinTech 

 

The largest mobile stocks broker in Europe, conquers plucky little Belgium. AltFi reports: 

“Commission-free trading app BUX is expanding its BUX Zero stock trading service even further across Europe, today launching in Belgium.  

Just last month, the fintech launched BUX Zero in France after having introduced the commission-free trading platform to Germany and Austria at the beginning of July.  

Since its launch in its home country of The Netherlands in September 2019, BUX Zero has now been made available in five countries across Europe.  

The fintech’s fee-free trading option has over 300,000 customers, including 100,000 in Germany alone, making it the largest mobile broker in Europe.”