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Investment Roundup: Fintech Financing Heats Up

flame-icon_fire_hotWith funds flowing from some of the biggest names in payments, including PayPal and Ant Financial, March got off to a hot start for worldwide e-commerce and fintech investment. Providers around the globe have landed hefty financing rounds from heavyweights in venture capital, payments and financial services during the first half of the month.

The e-commerce arm of India’s Paytm raised $200 million in a funding round led by Chinese e-commerce giant Alibaba—cash it will use to expand its online retail operations, the company said. Reported in a regulatory filing, the financing deal gives Alibaba a 36 percent stake in the business unit, Paytm E-Commerce Pvt Ltd., in exchange for $177 million. The remaining $23 million was pledged by Saif Partners, an Asia-focused venture fund, which now controls 4.6 percent of Paytm E-Commerce, which operates the Paytm Mall e-marketplace. Paytm last year spun off Paytm Mall as a separate company in a bid to challenge Indian competitors Flipkart and Snapdeal and global giant Amazon, which has ramped up operations in the country since launching there in 2013. In 2015, Alibaba and its Ant Financial affiliate acquired a collective 40 percent stake in Paytm in exchange for more than $1 billion spread across two separate funding rounds.

Meanwhile U.K.-based Atom Bank has landed £113 million (US$138 million) from existing investors, including Spanish bank BBVA, Woodford Investment Management and Toscafund Asset Management. The infusion brings the total raised by Atom to nearly £250 million (US$304 million), ranking the mobile-only “challenger bank” among the most heavily invested-in U.K. fintech startups, according to reports. Since launching in April 2016 with services targeting SMEs, Atom has been building out its offerings, recently rolling out a mortgage lending service, and plans to add current accounts, debit cards and savings products—all delivered via mobile app.

Elsewhere in Europe, Germany-based solarisBank finalized a €26.3 million (US$28 million) funding round from a group of international investors, including Arvato Financial Solutions—the financial services subsidiary of German media conglomerate Bertlesmann—and Japan’s SBI Group. Founded in 2015, solarisBank provides APIs to power banking services for fintech startups. The firm received a pan-European banking license in 2016 and plans to use the new financing to expand its geographic reach across Europe. Already active in six European markets, solarisBank thus far has onboarded more than 20 companies to its banking platform.

South Korean P2P money transfer provider Viva Republic landed a $48 million Series C funding round with PayPal among the participating investors. The round was led by VC Goodwater Capital and joined by Bessemer Venture Partners, Altos Ventures and Partech Ventures, in addition to PayPal. Viva Republic’s Toss app lets users send up to $500 from their mobile phones. Since its early 2015 launch, Toss has struck deals with 18 of Korea’s 19 biggest banks and been downloaded more than 6 million times, facilitating more than $3 billion in transfers, according to the company. Viva plans to add additional capabilities to Toss, including consumer loans, micro-insurance and cross-border transfers, in the near future.

Meanwhile, cross-border payments platform Currencycloud has secured £20 million (US$24 million) in Series D funding with a new investment from GV (formerly Google Ventures) and additional financing from existing investors Notion Capital, Sapphire Ventures, Rakuten and Anthemis. Total investment in the 5-year-old company now stands at £44 million ($54 million). The new funding will be used to fuel Currencyloud’s continued growth and global expansion, the London-based company said. Its API-based cross-border payments platform is used by more than 200 challenger banks, prepaid providers and digital payments firms in 35 countries, and more than $25 billion has been sent through its platform, according to the company.

Another cross-border payments provider—blockchain-based Veem—also has received a cash infusion from investors. Formerly known as Align Commerce, the San Francisco-based company raised $24 million in Series B funding, led by the venture capital arm of National Australia Bank.  GV, SBI Investment and existing investors Kleiner Perkins Caufield Byers and Silicon Valley Bank also joined the round, which brings Veem’s total funding to more than $40 million. The company’s platform converts funds into bitcoin and pays recipients in their national currency, eliminating the need for banking intermediaries for cross-border payments. Already operational in 60 countries, Veem will use the latest funding to expand into more markets and offer payments in additional currencies.

Finally, Toronto-based Dream Payments, which operates a cloud-based platform that powers m-commerce and payments on mobile devices and the Internet of Things, has closed a $10 million Series A financing round. The round was led by FairVentures Inc., the innovation investing arm of Fairfax Financial Holdings. Connecticut Innovations, Real Ventures and a prominent group of angel investors were also key participants in the financing. The capital infusion will fund the expansion of the company’s platform into the U.S., the acceleration of the company’s third-party app ecosystem and its continued growth in Canada, Dream said.

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