FinTech Futures: Top five news stories of the week – 28 June 2024
Here’s our pick of five of the top news stories from the world of fintech this week, featuring iBusiness Funding, Norm Ai, Nubank, Hyperplane, the European Central Bank (ECB) and more.
Klarna sells checkout business to investor consortium
Klarna sells checkout business
Klarna has finalised a deal to sell its online checkout service, Klarna Checkout (KCO), to a consortium of investors led by Kamjar Hajabdolahi, CEO and founding partner of Stockholm-based venture capital firm BLQ Invest.
Also involved in the consortium are Systematic Growth founder Ashkan Pouya and Martin Randel, co-founder and board member of vitamin drink company Vitamin Well AB.
According to sources at Swedish media outlet Breakit, the consortium will pay SEK 5.4 billion ($515 million) for the business unit, including “SEK 2 billion for the business itself and approximately SEK 3.4 billion in a revenue-sharing agreement”.
A report by Bloomberg adds that the sale removes any potential friction in how Klarna distributes its payment methods through payment service providers like Stripe and Adyen.
iBusiness Funding snaps up Funding Circle’s US business for £33m
Small business lending platform Funding Circle has entered into an agreement to sell its US business to iBusiness Funding, a software and lending service provider based in Fort Lauderdale, Florida, for £33 million.
The deal includes the division’s entire loan portfolio, which Funding Circle says “includes a £10m gain” before transaction costs.
Funding Circle adds it will review the proceeds of the sale “in line with our capital allocation framework” and expects to close the transaction “by the end of June”.
The planned sale of the division was first announced by CEO Lisa Jacobs earlier this year in the company’s full year financial results for 2023. The results, published 7 March, showed that the US business contributed to losses of £23 million for Funding Circle in 2023.
US regtech start-up Norm Ai raises $27m Series A funding
Norm Ai bags $27 million Series A funding
New York-headquartered regtech start-up Norm Ai has secured a $27 million Series A funding round to help grow its AI-powered regulatory compliance solution.
The round was led by US investment manager Coatue with additional support from Citi Ventures, Bain Capital Ventures, Blackstone, TIAA Ventures, New York Life Ventures, and the former president of Blackstone, Tony James.
The new cash injection, which brings the total raised by Norm Ai over the past 11 months to $38 million, will be used to continue the development of its Regulatory AI Agent platform and expand its client base.
Additionally, Norm Ai says that some of the funds will be used to hire for roles across AI engineering, legal engineering, software engineering, sales and more.
Brazil’s Nubank buys AI-powered data intelligence start-up Hyperplane
Brazilian challenger Nubank has acquired US-based data intelligence start-up Hyperplane for an undisclosed sum.
The deal will see Nubank utilise Hyperplane’s AI expertise to power its core machine learning capabilities as it looks to provide more personalised financial products and services to its customers.
The challenger says it intends to harness its new acquisition’s AI tech to build foundational models that its product and engineering teams can “consume” to upgrade its customer experience at “every step of their journey”.
It adds that its existing technology infrastructure and “integration path” will allow the instant application of Hyperplaneʼs AI capabilities from “day one”.
ECB publishes progress update on digital euro preparation phase
ECB publishes digital euro progress report
Privacy, offline functionality and possession caps are the key focus points of the first progress report delivered this week by the ECB regarding its digital euro preparation phase, which has been underway since November.
Piero Cipollone, ECB executive board member and chair of the High-Level Task Force for the digital euro, says preparations for the digital euro are “progressing well”.
Latest developments include the deployment of “state-of-the-art measures” to ensure user privacy in both online and offline transactions, and the formation of a newly created workstream to pinpoint holding limits.
