London fintech growth, Harvard dives into cryptocurrency, Nordics and Baltics new VC firm, and more

Finance Tips

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London is set to overtake San Francisco as the fintech “unicorn capital of the world,” according to a new report by London-based recruitment firm Robert Walters and research group Vacancy soft. There are 29 fintech unicorns in the world, with nine of those in San Francisco and seven based in London.  CNBC reports:

According to Innovate Finance, the U.K. is a world leader when it comes to securing VC investment in fintech, ranking third globally behind China and the United States. Global VC investment in fintech last year reached a record $36.6 billion, Innovate Finance’s data shows, which was secured across 2,304 deals — a 148% year-on-year increase.

London’s top fintech unicorns include Revolut, TransferWise, and OakNorth. The report flagged challenger bank OakNorth as one to watch, noting the company’s “phenomenal” income growth from £77.1 million ($100.81 million) to £177.6 million in just 12 months — a year-on-year revenue increase of 268%.

The report also noted that fintech is affecting the U.K.’s traditional banking sector, yet cautioned that Brexit could impact fintech growth rates.

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A new early-stage venture capital firm targeting the Nordic and Baltic regions officially launched its first fund earlier this month. ByFounder’s first fund closed at €100 million and “will be used to back tech startups at pre-seed, seed and in some instances Series A.” ByFounder’s is unique in that it combines institutional investors with more than 50 entrepreneurial backers. It’s LP structure includes founders behind renowned companies such as Skype, Zendesh, and Kahoot. TechCrunch sat down with managing partner Eric Lagier, who explained:

ByFounder startup

Evidently, our current portfolio is a mix of tech companies across verticals like healthtech, edtech, fintech, foodtech, IoT, B2C and B2B. Common to all of them is that they’re founded by great Nordic and Baltic teams with global ambitions. Successfully scaling a business is incredibly hard, but it’s crucial to do so almost from day one. We created byFounders to give the next generation of new Nordic entrepreneurs access to the collective learnings and leaders behind today’s unicorns.

Lagier also noted the changes within the Nordic and Baltic startup ecosystem, in that founders are no longer relocating to the U.S. in search of capital, talent, and markets:

The reality is that today you don’t need to relocate your business to get funding and be successful. This is a trend we’re increasingly seeing and contributing to in the Nordics.

The Nordics and Baltics have incredibly strong ecosystems that have in part been created by the willingness of our governments to work with entrepreneurs and tech companies, as well as by universities and society embracing tech-focused education. I believe the change in dynamics, in part, has been caused by seeing companies relocate, making nations’ lose out on wealth creation and a highly skilled workforce.

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Germany’s financial regulator has ordered fintech unicorn N26 to improve it’s staffing and engineering teams. Headquartered in Berlin and one of Europe’s leading fintech startups, N26 has around 2.5 million users across the globe. This new order from financial regulator BaFin comes after concerns were raised by banks and customers over N26 taking days to respond to fraud issues. The Telegraph reports:

Fintech unicorn N26

A spokesman for N26 said: “N26, as with all licensed banks, is subject to regular audits, including those by regulatory bodies such as BaFin, the German Financial Authority. Any findings are promptly reviewed, implemented and monitored in coordination with BaFin. We strive to meet all requirements consistently and take any required actions as quickly as possible.”

“As a bank it is imperative to continuously evaluate and improve all our structures, safety measures and service levels. To this end, we continuously invest in our security systems, customer support, and in hiring the right talent.”

N26 chief executive Valentin Stalf said that they should have hired more people before, but now have fixed their issues—while they sometimes took days to respond to other banks last year, now they reply within hours.

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Harvard University is taking the plunge into cryptocurrency. Bloomberg reports: The university’s endowment is backing Blockstack Inc., a crypto-company that “seeks to hold a $50 million digital-token offering.”  According to a regulatory filing, Harvard Management Co.—with two other investors—have “already purchased about 95.8 million of the company’s tokens valued at about $11.5 million.” Bloomberg reports:

Harvard joins a small group of institutional investors that have jumped into crypto assets. Two pension plans in Virginia invested in a venture-capital fund for the blockchain and digital-assets industry earlier this year, while in 2018 Yale University made a similar investment.

Most institutional money managers have shunned the largely unregulated digital assets, deterred by concerns about money laundering and market manipulation. While some argue crypto is not ready for institutional prime time, crypto bulls have been hoping deep-pocketed buyers enter the market to help depressed prices rally.

Blockstack’s offering will support the development of its decentralized computing network, which uses the digital currency.


Both Harvard Management and Blockstack have declined to comment.

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