The Monday Roundup: what we are watching this week | December 19th

By Puja Sharma

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

Cash cow

📈 As part of a long-term strategic partnership, Microsoft has bought 4% of London Stock Exchange Group (LSEG), which will use Microsoft’s Azure cloud service for its IT infrastructure and data. LSEG has entered into a 10-year commercial agreement with Microsoft that will accelerate its cloud migration plans by migrating its collaboration platform Workspace to Azure.

The partnership is expected to “meaningfully” increase LSEG’s revenue growth and the pair have agreed to co-invest in the product development roadmap for Workspace and other analytics initiatives. LSEG has also committed to a minimum cloud-related spend with Microsoft over the life of the agreement, amounting to $2.8 billion (£2.3 billion).

David Schwimmer, CEO of LSEG, said, “Bringing together our leading data sets, analytics and global customer base with Microsoft’s comprehensive and trusted cloud services and global reach creates attractive revenue growth opportunities for both companies.”

Satya Nadella, chairman and CEO of Microsoft, said, “Advances in the cloud and AI will fundamentally transform how financial institutions research, interact, and transact across asset classes, and adapt to changing market conditions.”

Nadella adds that the partnership will bring together LSEG and Microsoft Cloud, including Azure, AI and Teams, allowing users to “generate business insights, automate complex and time-consuming processes, and ultimately, do more with less”.

💷 EY has launched a London-based incubator for FinTech start-ups, with the consultancy firm reportedly set to pour millions of pounds into the sector in 2023.

Based out of its offices in Canary Wharf, EY’s FinTech lab, according to the report by City AM, forms part of the company’s “ambitious plans” to grow its fintech business in the UK, with more incubators set to open across the country.

Head of UK FnTech at EY, Chris Woolard, said, “Our overriding objective is to connect FinTechs, established financial services players, potential investors and the official sector and collaborate to bring new products and services to market, further enhancing the UK’s reputation as a global leader in fintech.”

Former Barclays FinTech Venture Studio head Mark Janetta, who has spent much of his career nurturing FinTechs and supporting their growth, has been tasked with leading the new project.

The media firm reported that EY has also announced a FinTech growth programme aimed at boosting start-ups, set to be managed by former Tech Nation CEO Katja Palovaara.

Ante up!

💸Coupa Software, a Business Spend Management (BSM), announced that it has entered into a definitive agreement to be acquired by Thoma Bravo, a leading software investment firm. This is an all-cash transaction with an enterprise value of $8.0 billion. Upon completion of the transaction, Coupa will become a privately held company.

The transaction includes a significant minority investment from a wholly owned subsidiary of the Abu Dhabi Investment Authority (ADIA). Under the terms of the agreement, Coupa shareholders will receive $81.00 per share in cash, which represents a 77% premium to Coupa’s closing stock price on November 22, 2022, the last full trading day prior to media reports regarding a possible sale transaction involving the company.

“This transaction is the result of a deliberate and thoughtful process that included engagement with both strategic and financial parties,” said Roger Siboni, Coupa’s lead independent director. “The Board evaluated the transaction against the company’s standalone prospects in the current macroeconomic climate and determined that the compelling and certain cash consideration in the transaction provides superior risk-adjusted value relative to the Company’s standalone prospects. The Board is unanimous in its belief this transaction is the optimal path forward and in the best interest of our shareholders.”

💰 Bondaval, a B2B FinTech based in London, has secured $15 million from Talis Capital in its Series A funding round, bringing the company’s total funding to over $25 million.

A number of existing investors participated in the round, including Octopus Ventures, Insurtech Gateway, TrueSight, Expa, and new investors Talis Capital, FJ Labs, and Broadhaven Ventures. Thomas Williams, general partner at Talis Capital, will join Bondaval’s board.

Founded in 2020 by Tom Powell and Sam Damoussi, Bondaval’s technology helps modernise and simplify B2B payment security, by fractionalising the underwriting process and cost. Bondaval says this makes it possible to cover risks “more comprehensively, expeditiously, and across more applications”. It gives credit teams the certainty that their receivables will be secured through its technology-enabled and non-cancellable MicroBonds.

Bondaval will use the funding to hire members to its team, expand into new markets, build more use cases for its platform and invest in its intellectual property.

What is the buzz

🌍Visa has pledged to invest $1 billion in Africa to accelerate digital transformation. The announcement was made during the U.S.-Africa Business Forum in Washington.

Visa will use the money to scale operations, deploy new technologies and deepen collaboration with its partners in the next five years. These include merchants, governments, financial institutions (FIs), FinTechs, and mobile network operators, according to a corresponding press release.

The inclusion of mobile network operators reflects the different role Visa plays in Africa’s payment ecosystem compared to the United States.

As well as acting as a partner to banks that issue credit and debit cards, Visa’s African operations require it to work alongside the continent’s mobile money and alternative payment FinTechs, which use solutions including mobile wallets and virtual cards to bring digital payments to unbanked populations.

“Visa has been investing in Africa for several decades to grow a truly local business, and today our commitment to the continent remains as firm and unwavering as ever,” said Visa Chairman and CEO Al Kelly in a statement. “Every day, Visa supports digital commerce and money movement in every country across the continent… We look forward to continuing to work closely with our partners to advance the financial ecosystem, accelerate digitization, and build resilient, innovative, and inclusive economies that will create shared opportunity and further spur Africa’s digital economy.”

With its structural role in global transactions, Visa’s investment could unlock untapped potential for payment digitization on the continent. Less than 50% of the adult population of Africa have made or received digital payments, and more than 40 million African merchants don’t accept them, according to the release.