The Monday Roundup: what we are watching this week | February 27th

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.

VCs’ darlings: FinTechs

💸Storied venture firms Sequoia Capital and Andreessen Horowitz (a16z) invested more in FinTech than any other category in 2022, according to research from CB Insights.

There were over 100 investments were made by Sequoia last year, despite the global downturn. And fintech represented nearly a quarter of the firm’s deals.

The trend at a16z was similar. According to CB Insights, of the 206 deals that a16z participated in last year, almost a quarter went to fintech companies — more than any other industry. Around 60% of these fintech investments closed in the first half of 2022, with the remainder closing in the second half of the year.

Sequoia-backed 25 companies in the financial services space last year. Its top three fintech targets, as identified by CB Insights, were capital markets, payments, and payroll and benefits — with each category representing 16% of its investments.

📲The Monetary Authority of Singapore (MAS) and the Reserve Bank of India (RBI) launched the linkage between Singapore’s PayNow and India’s Unified Payments Interface (UPI). This will enable customers of participating financial institutions in Singapore and India  to send and receive funds between bank accounts or e-wallets across the two countries in real-time. They can do this using just the mobile phone number, UPI identity, or Virtual Payment Address  (VPA). The linkage provides customers with a safe, simple, and cost-effective way to make cross-border fund transfers.

The PayNow-UPI linkage is the world’s first real-time payment systems linkage to use a scalable cloud-based infrastructure which can accommodate future increases in the volume of remittance traffic. It is also the first linkage to feature a non-bank financial institution as a participant.

The service will be made available to Singapore customers of DBS Bank and Liquid Group under a phased approach, where these institutions will progressively increase the number of eligible user groups and transaction limits from today till end-March 2023. Indian customers of all participating Indian banks will be able to receive funds through the service from the onset. Sending of funds is limited to customers of four Indian banks at the time of launch, with this scope to be gradually expanded.

The Joint Vision

🤑Propel, an innovative FinTech company dedicated to credit inclusion, announced a new $250 million syndicated credit facility for the company’s CreditFresh line of business (“the credit facility”). The new credit facility replaces and upsizes the previous CreditFresh facility by $90 million.

The CreditFresh portfolio has experienced significant growth since its inception, driven primarily by the expansion of the company’s transformative bank partnership programs. The new credit facility will enable the company to continue supporting this growth trajectory and unlocking the significant opportunity in this line of business.

“We are pleased to have closed this credit facility, which will enable us to continue executing on our strategic plan and provide sufficient liquidity to support the growth of the CreditFresh portfolio. Completing a significant transaction in this market environment and receiving strong interest and support from large, institutional lenders is representative of Propel’s strong fundamentals, resiliency and growth prospects. Through this facility, we continue our long-standing partnership with Bastion, and establish new relationships with industry leaders like Hudson Cove.” said Clive Kinross, Propel’s Chief Executive Officer.

🤖New Delhi and Berlin released a joint innovation and technology vision during Chancellor Olaf Scholz’s visit to India. The joint Vision, which includes a focus on deepening ties between industry and spurring cooperation on the development of advanced technologies like Artificial Intelligence and 6G, is the most comprehensive economic document signed between the two major economies to date.

“India and Germany share responsibility for global peace, stability, sustainability, and prosperity. Their cooperation on innovation, technology, and industry aims at benefitting humanity and is firmly guided by their shared democratic values and respect for universal human rights,” according to a press release by the Ministry of External Affairs.

The MEA press release mentioned the joint vision is not the first time both countries have sought closer participation in the field of technology. “India and Germany share a long history of cooperation in science and technology, research and innovation, institutionalized under the framework of the Inter-Governmental Agreement on ‘Cooperation in Scientific Research and Technological Development’ signed in May 1974. Mirroring the overall deepening of the India-Germany Strategic Partnership, cooperation in these areas has become wider, deeper, and more comprehensive in the face of the evolving needs and skills of the two countries,”

What is the buzz

🪙The Executive Board of the International Monetary Fund (IMF) discussed a board paper on Elements of Effective Policies for Crypto Assets that guide IMF member countries on key elements of an appropriate policy response to crypto assets.

The paper’s objectives are in line with the IMF’s mandate to support economic and financial stability across its membership. The paper addresses questions raised by IMF member countries on the benefits and risks of crypto assets and on how to structure appropriate policy responses. It operationalizes the principles outlined in the Bali Fintech Agenda (IMF and World Bank 2018) and includes macro financial considerations such as implications for monetary and fiscal policies. The proposed principles are fully aligned with the relevant standards of the Financial Stability Board and other standard-setting bodies.

Efforts to put in place effective policies for crypto assets have become a key policy priority for authorities, amid the failure of various exchanges and other actors within the crypto ecosystem, as well as the collapse of certain crypto assets. Doing nothing is untenable as crypto assets may continue to evolve despite the current downturn.