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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Stripe backs Step - the digital bank for teens
The Series C round raised US$100m in capital from a number of backers, including Coatue, TikTok star Charli D’Amelio, actor Jared Leto, and Will Smith’s Dreamers VC, for the enterprise.
Step provides a free FDIC-insured bank account and Visa card to teenagers. The accounts are backed by Evolve Bank and there is no subscription charge for its usage. Users don’t pay for their accounts and there are also no overdraft fees.
The mobile banking app enables parents to set controls and limits on spending and encourage responsible finances. According to data released by the company, 88% of the platform’s users say this is their first bank account.
To date, Step has seen great success in the marketplace. The company has raised more than $175m from investors and now has 1.5m users.
Stripe, which was founded by Irish brothers Patrick and John Collison, previously led Step’s $22.5m Series A round in 2019.
Step's Series B funding round also brought in $50m, and has a distinctly celeb-tinged reputation with investors including Justin Timberlake and the pop duo The Chainsmokers.
Users get access to a free, FDIC-backed bank account, a spending card and P2P payments platform to send and receive money instantly.
CJ MacDonald, chief executive of Step, said the company is aiming to improve the financial futures of the next generation. “Step is the only banking platform that enables teens to start building a positive credit history before they turn 18 and does not charge fees of any kind.
He has previously spoken about the importance of financial literacy for young people. “Money is just one of those things where I think the more educated and equipped you are early, the better decisions you can make down the road,” he told . “And you can also prevent yourself from making costly mistakes. I mean, the average American doesn't have $400 in emergency savings and pays $350 a year in banking fees. If we can help this next generation just ultimately be smarter and more educated as it pertains to money, I think we'll all be better off.”
Kyle Doherty, managing director at General Catalyst and Step board member, explained, “Gen Z is flocking to modern financial solutions that can be easily embedded within their digital lives and Step has a unique model for how to do this right.”
The news follows on from Stripe’s recent announcement that it plans to acquire TaxJar. The fintech, which builds software for online businesses that automates the reporting and filing of sales taxes, will most likely be integrated with Stripe’s billing services.
Currently, No terms have been disclosed but the Boston start-up had raised more than $60m from investors including Insight Partners.
Stripe chief financial officer Dhivya Suryadevara said of the move, “With TaxJar, we will help millions of internet businesses running on Stripe with their sales tax and make it easier for them to sell internationally.”