The Monday Roundup: what we are watching this week | Oct 4th

By Gaia Lamperti

The Monday Roundup sets the scene for the week’s biggest news stories, industry deals, and upcoming events. For Prime subscribers only.

Neobanks in the spotlight

UK challenger bank Monzo had to give up on its plans to acquire a US banking licence after over two years of inconclusive conversations with the Office of the Comptroller of the Currency (OCC). Monzo abandoned the application when it became clear the OCC would not support the bank due to concerns regarding its reported £115 million loss and the ongoing FCA investigation over money laundering accusations. Monzo said it is still committed to expanding in the US and would do so through its existing partnership with Ohio’s Sutton Bank.
The View: “While this isn’t the outcome we initially set out to achieve, this allows us to build and scale our early-stage product offer in the US through existing partners and invest further in the UK. There are many routes to market we’re exploring that have been successful for other market entrants who are now major players.” – Monzo’s spokesperson.

There are rumours that Bangalore-based, millennials-focused neobank Fi (formerly known as epiFi) is in the advanced stages of talks with global investment firm B Capital Group to finalise a new round of $40-$50 million funding. Earlier last year, Fi raised $13.2 million in its Seed round, and now it could reach a valuation of $250 million.
The View: “B Capital Group, which last week co-led Indian social commerce Meesho’s $570 million funding, is in advanced stages of talks to back Bangalore-based neobank Fi, many aware of the talks told me. Falcon Edge Capital is also likely to invest, one person said.” – Manish Singh on TechCrunch.

The creators economy hype is taking over FinTech

Here’s where Patreon, the startup helping content creators to get paid by their fans, is planning to invest its $155 million funds raised last year: financing original content that will appear on its platform before anywhere else. In a landscape with giants like Netflix and Amazon, tech businesses have finally accepted that content is king and are realising they need to produce their own. With a valuation of $4 billion, Patreon is also planning to go public in the near future, but the timeline is still uncertain.
The View: “We focused on that foundational layer for many years, the whole first chapter of the company, and now it’s quite clear that creators want better native media features. They’re asking for them loud and clear.” – Jack Conte, CEO of Patreon

Last week, digital payments company Square announced a new partnership with TikTok to enable the social media’s users to set up online stores. The service, Square x TikTok, will bring the marketplace experience into the video app allowing merchants and content creators to monetise from their clips. The announcement comes after, earlier this year, Square partnered with Google to enable its customers to add their products o platforms like Google Search, the Shopping tab, Images, Maps, and YouTube.
The View: “TikTok is huge right now and only continuing to grow. With Square x TikTok we’re able to quickly and easily feature our products in our TikTok content and seamlessly direct buyers to our Square Online store. We’re really excited to give fans an easier way to shop, directly from the platform where they’re already spending their time.” – Jessica Thomson, Owner of Bee Joyful Shop and Square’s merchant.

Where’s the buzz

The Pandora Papers file leak will probably be the main headline of the week, as it exposed offshore deals and assets of more than 100 billionaires, 30 world leaders, and 300 public officials.

Industry experts have different takes on the scandal. According to Rachel Woolley, Global Director of Financial Crime at software provider Fenergo, the papers prove that the industry in its entirety is failing to stop criminals from exploiting the same loopholes. “Without accountability, there is no incentive to stop financial crime, especially where there are financial gains to be made in mature economies,” Wooley commented. “If we don’t act now and drive change from the top down, the wider repercussions will impact every one of us as criminals continue to launder proceeds made from serious crimes, such as human trafficking and cyber-attacks.”

Conversely, Nigel Green, CEO of independent financial advisory firm deVere Group, believes that the Pandora Papers are not representative of the wider offshore financial industry which typically helps hardworking people looking for better returns and more flexibility. “The vast majority of the millions of people who use companies providing offshore financial products and services are not representative of those high-profile names that have been disclosed in the Pandora Papers. Indeed, the overwhelming number are hard-working, law-abiding individuals using fully legal and compliant solutions in order to seek out better returns, more options and greater flexibility,” Green said.