Fintech developments continue to make waves in both predictable and surprising ways, from record funding to biotech.
A new record Venture capital-backed fintech firms raised US$39.57bn from investors globally in 2018 – a record figure, according to Anna Irrera for Reuters. This is an increase of 120% from the previous year, as reported by data provider CB Insights (download the report
here), and this funding was raised through 1,707 deals.
Irrera reports that 52 mega-rounds (investments larger than US$100m) were responsible for the increase in funding. These accounted for US$24.88bn, including a US$14bn investment in Ant Financial, an affiliate company of Alibaba Group. Irrera writes: “In the last three months of the year, five companies joined the coveted ranks of fintech ‘unicorns’”, companies valued at more than US$1bn.
However, Irrera refers back to the CB Insight report that estimates the new funding could delay initial public offerings – the rush for raising capital on public markets could be decreasing.
Reuters article
Children of the revolution It isn’t just multimillion/multibillion-dollar companies benefiting from fintech. UK-based fintech company Revolut offers banking services, including a prepaid debit card, currency exchange, cryptocurrency exchange and peer-to-peer payments, and it is soon to launch an app aimed at improving children’s financial literacy, reports Scottish business news website Insider.co.uk.
Customers who have an account with Revolut will be able to add their children to their account, and children will be able to choose their own card and begin using a current account and money management platform. The Revolut Youth app is for children over seven, with a more advanced version for teenagers.
Although children will have access, their parents will ultimately retain control over the account, and will be able to manage their children’s pocket money and view transactions. Revolut is quoted: “The long-term goal is focused on allowing children to earn the trust to have more financial freedom. This means promoting financial literacy”.
Insider.co.uk article
Invest in BEST?Fintech and biotech are coming together, according to John Nosta, founder of digital health think tank NOSTALAB, reporting for
Forbes. Agenus, a biotech firm specialising in immuno-oncology, has announced it is launching a biotech electronic security token (BEST), which will be blockchain-based.
It will be a targeted financing option, intended to drive efficiency in drug development. The token will allow qualified investors to directly invest in a single biotech asset alongside traditional financing.
The first asset to be tokenised is AGEN2034, an immunotherapy treatment. The advantages of this tokenisation of future US asset sales are, according to Nosta:
- Direct investment in a lead compound now in clinical trials
- A higher potential level of liquidity and tradability
- Valuation based on revenue per dose
- A broader reach to potential investors ranging from businesses to patients
Nosta also says that this open source of financing could help the investing landscape to be more open and inclusive across socioeconomic barriers.
Forbes article
Consumers are surfing these growing fintech waves with a new level of empowerment and participation in financial services, whether that’s as a child or an investor in biotech assets. What uncharted waters will we find ourselves in next?
Seen a blog, news story or discussion online that you think might interest CISI members? Email bethan.rees@wardour.co.uk.