The Monday Roundup: what we are watching this week | Nov 22nd

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’ old and new ambitions

🛫 N26 has confirmed its withdrawal from the US market from January 2022, leaving a customer base of nearly 500,000 Americans. The digital bank made the announcement just a few days after Co-founder Maximillian Tayenthal revealed N26 was scaling back its American operations saying it wanted to shift focus to its core European business. However, it is very likely that the Berlin-based FinTech, which was valued at $9 billion in a recent funding round, was struggling to gain active users in the US, facing harsh competition after arriving late to the party. Entering the US market is a difficult venture for European FinTechs. Just a few months ago British digital bank Monzo also abandoned its US banking license aspiration as the expansion proved more complicated than expected.
The View: “Learnings from N26’s two years of growth in the US market are being constantly applied as it further expands its product portfolio and scales its global business.” – N26 in a statement

🏳️‍🌈 BaaS company Jiko and tech suite Euphoria are partnering up to launch a banking app for the transgender community that will be called Bliss. The new product will be based on a fundamental “know your customer” process, allowing hyper customisation to accommodate individual needs, like alternative forms of verification. The announcement arrives as another step towards granting gender inclusion in financial services, helping the 2-6 million community of transgender people in the US to access banking products.
The View: “If you can build a banking services platform that puts money back in our users’ pockets while helping us build savings programs that work for trans people, you can set up and run a finance platform for anyone. Euphoria is now able to focus on providing our community and users with the best experience possible, and Jiko handles all of the back-ends of banking.” – Robbi Katherine Anthony, CEO, and Founder at Euphoria

Ups and downs of crypto platforms

👍 Cryptocurrency platform Gemini raised $400 million during its first-ever round outside financing led by Morgan Creek Digital. 10T, ParaFi, Newflow Partners, Marcy Venture Partners, and Commonwealth Bank of Australia also participated, bringing the firm’s valuation to $7.1 billion. With the new funding, Gemini is looking to expand geographically, with the first markets in the pipeline being the UK and Singapore. The company was launched in 2015 to cater for both individuals and institutional investors and recently, it has also started to foray into the NFT space.
The View: “In 2021, we diversified our revenue stream, expanded to new territories, acquired pioneering companies, and invested in industry-redefining innovations through the Gemini Frontier Fund. We also supported Bitcoin core development through the Gemini Opportunity Fund.” – Cameron Winklevoss, President of Gemini

👎 Cryptocurrencies marketplace BlockFi is facing SEC scrutiny over its high-yield crypto accounts. BlockFi’s Interest Account pays substantially higher customers interest rates on crypto (including USD-linked stablecoins) than USD deposits in a traditional bank, so state regulators are arguing that the product constitutes a security and that BlockFi has failed to register it as such with appropriate regulators.
The View: “Despite the mounting legal questions, BlockFi is growing at a rapid clip. It’s on pace to make $475 million in gross revenue this year, according to Zac Prince, one of the firm’s founders. “Things aren’t slowing down,” he said during a recent interview for the Bloomberg Financial Innovation Summit that aired on Nov. 5.” – writes Bloomberg

Where’s the buzz

In Deloitte’s annual ranking of the top 50 fastest-growing tech companies in the UK, FinTechs made the most entries. Ranking at number 1, ClearBank has emerged as the clear winner with a 21,000% growth in the last 12 months. Buti t is followed on the podium by Airtime Rewards, an app assessing spending behaviour and payments company Paysend, clearly showing the growth of the FinTech sector in the country. Of the complete Deloitte’s list, FinTech companies make up more than a fifth.