The first month of 2021 is setting the tone for the year to come. Fintech is still everyone’s favorite child, with many massive corporations entering the fintech ring, like US-owned Walmart. Portugal’s fintech scene continues to grow as the country looks to become Europe’s “Tech Tiger.” But the country leading Europe’s top venture capitalist investment destination is still…
The UK
The UK remains the leading European fintech hub when it comes to funding startups. According to a report published by Innovate Europe, they ranked second globally, after the US, with €3.3 bn funds raised in 2020 for venture capital.
After the UK, Germany, and Sweden are the next two European countries high on the list.
“Germany was second with €1.1bn of investment across 71 deals, up 50%. Sweden ranked third with €1.0bn of capital raised, with France (€431m) and Switzerland (€242m) closing out the top five.”
The UK might hold the crown for fintech funding, but that doesn’t mean there isn’t steady growth among other European countries. One such country is Portugal.
Portugal aims to become Europe’s next fintech hub
According to TechCrunch, in 2019, there was €285 million available for investment, and the top 25 later-stage companies raised a total of €117.8 million. This funding, made available by the Portuguese government, forms part of government initiatives to boost the startup industry.
Portugal already has a host of successful startups, including Farfetch, Talkdesk, DefinedCrowd, Outsystems, and Feedzai, to name a few. They are acting as magnets for international investors, which will, in turn, help bolster the startup scene even further.
It might still be early days for Lisbon’s startup community. Still, with more and more success stories, emerging unicorns, and qualified founders starting their businesses with the assistance of government stimuli, Portugal might just become Europe’s rising fintech star.
Plaid launches minority-focused incubator
To support more minority and underrepresented founders, Plaid, a US-based company, is launching an incubator program for early-stage fintech founders. Called FinRise, the nine-month-long accelerator targets startups led by Black, Indigenous, and People of Color (BIPOC).
The program will begin with a three-day virtual boot camp followed by ongoing support from the Plaid team for the subsequent nine months. Nell Malon, Plaid’s growth manager, explains the process further. “After the workshop, participants will work with their dedicated account managers and have access to ongoing programming support structures … our goal is to provide ongoing support at every stage of our participant’s journey over the course of nine months,” says Malon.
The company doesn’t plan on investing directly into any of these startups. However, Malone noted that this could change down the road.
Miami and Austin to become the next Silicon Valley(s)?
Northern California has sustained itself as the tech capital of the world with its influx of talent and venture capital firms to sustain the industry financially. But there is growing concern that the region has gotten too expensive and overhyped for its own good.
Now, other areas in the United States are looking to capture some of the Silicon Valley magic for themselves. Miami is quickly becoming a tech-friendly city, as its Mayor, Francis Suarez, is already taking meetings with executives at Google, Twitter, and Tesla. Suarez is enticing these businesses by running his city like a tech business itself. He is expected to name a Chief Technology Officer for the city. Suarez is even working on a measure that would allow residents to pay their taxes in Bitcoin and is considering holding some of the city’s reserve assets in the cryptocurrency itself.
Then there is Austin, Texas, which has convinced Oracle and Hewlett Packard to move their headquarters from California to Austin. Even Tesla CEO Elon Musk has settled down there too. While some believe companies are moving to Texas for the reduced taxes on their business, it also helps that moving to a city with a lower cost of living means they can pay their workers less money and increase savings in this way as well. Dan Ives, a financial analyst with Wedbush Securities, notes, “When you look at Austin: It’s creating a mini Silicon Valley at half the cost for an average employee.”
Walmart gets into the fintech game
Retail giant Walmart hopes it’s better late than never when it comes to fintech. The company announced it is set to create a fintech startup of its own in partnership with venture capital firm Ribbit Capital. While much is not yet known about the new company, Walmart said that the partnership “will bring together Walmart’s retail knowledge and scale with Ribbit’s fintech expertise to deliver tech-driven financial experiences tailored to Walmart’s customers and associates.”
President and CEO of Walmart US, John Furner, mentioned that its customer base has always turned toward Walmart to save money. “For years, millions of customers have put their trust in Walmart not only to save them money when they shop with us but help them manage their financial needs,” he said.
And that’s it for the month! Follow this space to stay on top of the must-know fintech news.