2020 in Fintech and Alternative Finance: Part 2

By Oliver Smith on Wednesday 30 December 2020

FeaturesAlternative LendingDigital BankingSavings and Investment

A boom in funding rounds, Open Banking and M&A were key fintech themes in the second half of 2020.

2020 in Fintech and Alternative Finance: Part 2
Image source: Clever Visuals on Unsplash.

After looking at the funding rounds, hires, layoffs and pure survival for many through the Covid-19 pandemic in H1 2020 yesterday, today we cast an eye over the stories which set the pace over the second half of 2020.

July

By July most of the fintechs affected by Wirecard’s demise were back up and running, while Curve even took the opportunity to overhaul its refunds system—although customers weren’t a fan, so by August Curve rolled back the changes.

A wave of fintech funding rounds were announced as venture capital funding taps were finally turned back on, with Penta, TransferWise, Farewill, Fundment, Radix, Coconut, Robinhood, Ravelin, Plum, Form3, Hippo, Selina Finance, Revolut, Thought Machine, ComplyAdvantage, Remitly and an unusual fintech called Lanistar all raised capital.

Lanistar would find itself in hot water, both with the regulator (which eventually withdrew its warning) and its initial investor Milaya Capital which pulled out of the fintech’s £15m funding round.

After many many delays and a false start, Monzo also relaunched its Plus subscription offering and in October would expand this with an even more expensive Premium option.

August

Results season arrived with good news for Starling Bank, middling numbers for Revolut, and “material uncertainty” for Monzo.

Adyen and Triodos Bank also posted results, while Habito closed a £35m funding round.

Robinhood closed its third funding round of 2020, with another still to come in September, and Curve repeatedly tipped the market that it is working on a £100m funding round… which still hasn’t happened yet.

And here at AltFi we reviewed Monzo’s Plus and Premium subscription offerings, and posted the question Can premium banking push fintechs to profitability?

September

In September German alternative lender Monedo filed for bankruptcy, with AltFi revealing that CEO David Chan became the new boss of credit card lender Jaja Finance the following month.

Starling Bank’s Marketplace reached its third anniversary. The bank launched both a “Kite” account for kids and negative interest rates for its Euro account holders, and CEO Anne Boden joined the government’s Board of Trade.

Open Banking reached 2m UK users just six months after it hit 1m, open banking provider TrueLayer raised an additional $25m in funding, Moneyfarm said 1-in-5 of its transfers are now using the technology and Tink reported a third of financial institutions are now spending over £90m on open banking.

October

In October longtime crowdfunding rivals Seedrs and Crowdcube announced their intention to merge the businesses… and just days later Seedrs posted widening losses of £4.7m with a “going concern” warning.

Here at AltFi, we published our long-awaited Alternative Lending State of the Market Report 2020, with data on the industry’s growth in the UK and Europe over the previous 12 months.

Freetrade joined the freemium game with its Plus subscription service, which would later bolster the account with 3 per cent interest for savers, and the arrival of the trading platform’s SIPP.

North American inventory financier Clearbanc arrived in the UK, Monument secured a limited UK licence for its digital bank for the rich, CrowdProperty reached £100m in cumulative lending, and PrimaryBid raised $50m.

Oh, and Anne Boden spoke out for the first time about the coup which created Monzo—the exec would reveal more in her book Banking On It and would speak exclusively about the experience the following month at AltFi’s Festival of Finance...

Boden would go on to announce Starling had broken even the following month, as speculation grew that the fintech was fast-becoming a takeover target for an incumbent bank.

November

Yes, in November here at AltFi we hosted our most ambitious digital event yet with dozens of speakers across 8 countries, including the CEOs of Bunq, Tide, Metro Bank, Assetz Capital and many many more.

Missed the Festival of Finance? Don’t worry; the whole thing is available on-demand.

OakNorth found itself with a new shareholder in the form of SMBC, Landbay secured £300m/year from an undisclosed asset manager, and PensionBee launched a £100m bid for customers to back its fossil-fuel-free pension fund… which it would hit just 34 days later.

PensionBee also came out with the surprise announcement that it is planning a stock market listing in the next 18 months, one to watch closely in 2021.

December

December brought not one, but two State of the Market Reports from AltFi, covering the worlds of Digital Wealth and Digital Banking.

Former Virgin Money CEO Jayne-Anne Gadhia earlier in the year had launched her own financial management app Snoop and raised £3.2m in equity and an additional £10m from crowdfunding and the government’s Future Fund. At the end of the year, rumours began to swirl that price comparison site MoneySuperMarket was considering a Snoop acquisition.

Australia’s increasingly bubbly digital banking market saw several new entrants in 2020, including Avenue, Hay and Alex to name but a few.

Things would come to a head in December as Xinja, one of the country’s older challengers who had championed a high-interest model decided to call quits on its banking offering with the shocking (but maybe unsurprising) decision to return its banking licence.

Finally to wrap up the year, here at AltFi we announced the AltFi Awards 2020 winners, with some brilliant names including LendInvest, YTS and ComplyAdvantage among the winners.

And that’s it for our extensive, but not exhaustive, look back at what happened in H2 2020. 

Missed the first half of the year? Take a look at Part 1 of this article here.

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