What is fintech? | CNBC Explains
Currencycloud, a fintech startup that provides cross-border payments to a number of popular financial applications, raised $ 80 million in a funding round, supported by the Visa payment system.
Currencycloud, a UK-based company, sells payment software to banks and fintech firms to process their international transactions. While the company is not as well known as its consumer-oriented partners such as Monzo and Revolut, the company provides some essential features in the background for such apps to run..
«We call the segment embedded financing, ”Currencycloud CEO Mike Laven told CNBC, explaining that the firm is embedding its product in the platforms of large banks and fintech companies. – We are probably the most important business that you have never heard of. But we do it in good faith. We do not have a strategy in which we compete with our clients».
The company’s latest round of funding was co-financed by the venture capital arm of SAP Sapphire and Visa, and also attracted support from Google, the investment arm of the World Bank, French lender BNP Paribas and Japanese bank SBI. Visa Treasurer Colleen Ostrowski To Join Currencycloud Board Upon Completion.
According to Laven, Currencycloud views Visa as a strategic investor and is partnering with the payment system to provide its customers with access to Currencycloud technology. The company also works with a number of so-called claimant banks in the UK, including Revolut, Monzo and Starling, which have raised millions of users to bank with them using only an app and a debit card..
«Their end users, for the most part, will never see us there, ”Laven said. – We are part of the invested finance in the technical stack. It’s not that sexy, but it’s incredibly good business.». One of the company’s products, Spark, allows customers to collect, store, convert and process payments in 35 currencies..
The Currencycloud chief explained that the business fintech market is a sector that includes competing payment processors such as Stripe, Adyen, and Checkout.com, – «much more than a consumer business» and «more profitable», but «complicated».
Although his business is still not strong, Laven said that «we can get into the current round if we decide», but he had more room to grow before becoming profitable. «Now we are focusing not on profitability, but on the strength of our offerings and expansion into other markets.», – he said.
The company’s largest market is currently Europe, Laven said, although the company is investing more and more in North America and is currently looking to expand into Asia, where fintech is seeing significant growth in popularity. In China, for example, mobile wallets like Alipay and WeChat Pay have become commonplace, and many Chinese consumers use their phones to pay for purchases..
The investment in Currencycloud comes shortly after the acquisition of Visa Plaid, a $ 5.3 billion Visa company that specializes in APIs for linking fintech applications to consumer bank accounts. Investors are pouring money into these behind-the-scenes players: Checkout.com won a $ 230 million round and Stripe won $ 250 million last year.
Currencycloud has raised over $ 140 million from investors. The company claims it has spent $ 50 billion in global payments since its founding in 2012..