Who is the visa-backed startup powering Monzo and Revolut?
Currencycloud is a p...
As Currencycloud obtains US$80mn in its series E funding round backed by Visa, FinTech Magazine takes a closer look at the startup
Currencycloud is a payment platform that functions on an international level by leveraging smart technology inorder to simplify finance. Developers are able to use the company’s API building blocks in order to embed customised payment solutions into a customer’s product in a way that suits them.
“We call the segment embedded finance,” Currencycloud CEO Mike Laven told CNBC, “We’re probably the most important business that you’ve never heard of. But that’s conscientious on our part. We do not have a strategy where we compete with our customers.”
It may be surprising that a company responsible for backing so many fintech unicorns such as Revolut, Starling and Monzo could fly so under the radar, but Laven understands that fame does not always equate to investment. He said: “Their end-user customers, for the most part, will never see that we’re there. We’re a piece of embedded finance in the tech stack. It’s not as sexy, but it’s an incredibly good business.”
Nikolay Storonsky, Founder & CEO, Revolut has also praised the firm: “What made Currencycloud so appealing for us is that they’re very start-up friendly – they’re a start-up themselves, with great technology, a really good API – they’re helping their clients,” he said.
The latest funding round was not only led by Visa, but with a branch of SAP, venture firm Sapphire. The round also attracted funding from Google, BNP Paribas and SBI.
[image: Mike Laven, CEO, Currencycloud]
“Currencycloud is re-imagining how money flows around the global economy and embedding it into platforms of the future.” said Laven, “Transfer of value is fast becoming the newest layer in the modern technology stack, and Currency Cloud is positioned to provide the infrastructure to make this happen. With these new strategic investors, we are well placed to be the go-to provider for the next wave of Fintech innovation”
“I’m delighted to be joining the board of such an exciting technology company,” added Colleen Ostrowski, SVP and Treasurer at Visa. “Currencycloud is re-shaping the way that the platforms of the future are moving money around the world, and there is huge potential for the company to drive further innovation in the cross-border payments industry.”
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Robinhood faces $35mn fine from New York DFS
The company’s crypto division was issued with a wrist slap in 2020, following the red flagging of several “matters requiring attention”. Robinhood revealed it had reached a settlement with the New York State Department of Financial Services regarding the issues, which related to “alleged violations” of cybersecurity and anti-money laundering rules.
The news follows on from the announcement earlier this week that the trading platform favoured by armchair investors, which almost broke Wall Street earlier this year, has an expected valuation of $35bn following its IPO.
Critics of the platform say Robinhood encourages “risky behaviour” among inexperienced (armchair) investors. The app has also been criticised for not informing customers that much of its profits are generated by routing their trades to Wall Street firms taking the other side, or so-called "payment for order flow."
Robinhood said last month they expected the DFS fine to be at the $15mn mark, adding it would be “the bottom of the range for our probable loss in this matter”. The $35mn penalty is on top of the record $70mn Robinhood incurred from US financial regulator FINRA in June, for “lax vetting and outages.”
However, the settlement indicates the company’s IPO will go ahead as planned, despite initial concerns the investigation could see the float delayed until later this year.
Robinhood floats imminent
Despite the regulatory hiccups, Robinhood priced its IPO between US$38-US$42 per share, giving the platform the US$35bn valuation and analysts predict the firm’s debut on the Nasdaq could occur as early as next week.
Robinhood democratising investment
Launched in 2013 by Tenev and Bhatt, who were Stanford University roommates, Robinhood’s founders will retain most of the voting rights after the IPO. Bhatt reportedly holds 39% of the voting power of outstanding stock, while Tenev holds 26.2%.
The online brokerage, which came under fire for its handling of the GameStop trading debacle, which saw the platform limit stocks to investors, states its mission is to “democratise” investing and is one of the most highly anticipated IPOs of the year.
Robinhood was valued at $11.7bn in autumn 2020 following a private equity funding drive. The new valuation will mean represent a three-fold increase in the company’s market value in less than 12 months.