2019 In Fintech And Alternative Finance: Part 2

After looking at the funding rounds, explosive expansion into new markets and growing consumer confidence of H1 2019 yesterday with our look back on the key themes of January-June on AltFi.com, today we cast an eye over the stories which set the pace over the second half of 2019.

July

After the resignation of Theresa May, July saw peak Brexit uncertainty strike as Boris Johnson was chosen to be the UK’s next Prime Minister. At this time German digital bank Fidor chose to close its British operations due to “market uncertainties”.

Property Partner, a retail darling of the alternative property investment market, unveiled a raft of changes to its business including a new CEO and a host of new fees. In September new boss Warren Bath sat down with AltFi to detail the startup’s dramatic plan to reach profitability in 2020.

Curve raised $55m to enable its expansion into six European markets and, just six months after its last funding round, N26 increased its valuation to $3.5bn following an impressive $170m extension of the earlier round… but then N26 Co-Founder Maximilian Tayenthal quickly drew criticism by saying profitability isn’t “one of our core metrics”.

August

Not content to let N26 take all the attention, in August Klarna became Europe’s most valuable fintech at an even higher $5.5bn valuation.

Scalable Capital also raised a €25m series C funding round, but AltFi revealed that not all is well in the world of digital wealth advisors with 1 in 4 shutting down over the previous 24 months.

US free share trading giant Robinhood was given a green light by the UK regulator to launch, and by September AltFi revealed that Australian rival Stake had also been given the go-ahead. Yet as we enter 2020, neither has fully launched to the public.

September

In September, GoCardless announced its expansion into the US, joining a wider cohort of “fintechs going global” with 2019 seeing Monzo, Revolut and OakNorth expanding into the US.

It wasn’t all good news however, as Funding Circle and Metro Bank were both ejected from the FTSE 250 given the disappointing performance of both stocks in recent months.

Closer partnerships were among the top trends of 2019, and September saw Investec joining forces with Moneybox to offer a 95-day savings account, a partnership that echoed that of OakNorth and Monzo who in March partnered on offering savings accounts to the digital bank’s customers.

Profitable fintechs, once a rarity, quickly became all the rage in the later months of 2019. In August Anne Boden declared Starling would reach profitability in 2020, TransferWise clocked its third year of profit in September, and Iwoca and LendInvest both ended the year in the black.

At the end of September gold payment app Glint fell into administration, as exclusively revealed by AltFi, only to emerge months later after an unsuccessful hostile takeover battle ended.

October

Crowdfunding was undoubtedly boosted by the interest in fintech during 2019, and in October Crowdcube revealed the sector was responsible for 38% of funds raised on the platform.

September’s shock departures of Funding Options’ CEO and Managing Director were quickly followed by the promotion of Simon Cureton to the top job on an interim basis.

Not satisfied to leave 2019 without its own bumper funding round Revolut reportedly appointed JP Morgan to oversee an incredible £1.2bn debt and equity raise… which at the time of publication, has yet to emerge.

Finally, in the third quarter of 2019, the official account switching figures started to hint at the digital earthquake of consumers beginning to move their bank accounts away from incumbents with 13,000 heading to Monzo in Q3. But will the trend continue?

November

In November MarketInvoice, the UK’s largest invoice marketplace for SMEs, took the bold step of rebranding to MarketFinance as it dramatically expanded its offering to include direct business lending.

At the same time Zopa, the UK’s first peer-to-peer lender, found itself in hot water after failing to raise the £100m needed to complete its banking licence application after three years. Luckily in December the platform managed an 11th hour £140m cash raise, at the expense of a lower valuation which stung its earlier investors.

Finally in November Sir Martin Gilbert was officially appointed as chair of Revolut’s board.

December

In December the long-awaited FCA rules from July came in to force, triggering a swathe of retail departures in the industry including Plum’s partnership with Ratesetter, Thincats and Landbay.

Lastly Christmas brought a flurry of executive departures and appointments, including at Crealogix, Nutmeg, Metro Bank and the Bank of England, and senior hires at Curve, NN Investment Partners and Assetz Capital to name only a few.