#195
Leapfrogging
“Leapfrogging”, or using the lack of existing infrastructure as an opportunity to adopt the most advanced methods, has been a highly effective strategy for developing nations over the last few decades.
Providing mobile connectivity for billions of people is probably the most celebrated example. But it’s not just physical infrastructure that can be leapfrogged, and we saw that recently when Kenya issued the world’s first mobile-only government bond!
Given the 27m users of mobile money in Kenya, the mobile-only M-Akiba bond promised the government access to a brand new capital base. The bond offered minimum purchase amounts at $30 vs. the $490 previously required for government bonds, a 10% interest rate and a tenor of 3yrs.
The Kenyan Treasury raised KSh247m ($2.45m), just 25 per cent of the target, but 85% of the buyers had never purchased a bond before!
With 70% of Africa’s population under the age of 35, Africa looks like a fertile ground for the development of leapfrog fintech businesses. As Vinay Gupta from the Harvard Business Review says, "We should not be surprised if the world's next leading megabrands and global platforms are born far away from the traditional centers of technology development."
Come on Africa!
Portfolio News
Neighborly launches Networks Accelerator for community broadband - Congratulations to portfolio company Neighborly, which recently announced its Networks Accelerator to expand community broadband access across the US. According to the FCC, 6 percent of Americans still lack access to fixed broadband service. Read more
Leapfrogging
World Bank launches world-first blockchain bond - The prototype deal, dubbed a “Bondi” bond (Blockchain Operated New Debt Instrument) is being viewed as an initial step in moving bond sales away from manual processes towards faster and cheaper automation. Read more
The world’s first mobile-only government bond in Kenya is popular, but missed its target - M-Akiba promised the government access to a new capital base as only 2% of government bonds in Kenya are bought and sold by individual investors. The mobile-only bond offered minimum purchase amounts of $30 vs. the $490 previously required, a 10% interest rate and a 3yr tenor. Read more
Industry News
JPMorgan disrupts online brokerage Robinhood - Has Robinhood the disruptor now become the disrupted with the news that JPMorgan Chase, the biggest bank in the US, is set to offer zero-commission trades, along with basic “robo-investing”? Read more
Look, no beard: Goldman Sachs' Marcus subverts the fintech story and launches in the UK - Marcus is not on Silicon roundabout. The boss isn’t 25 years old, does not have a beard and has not raised £50m in cash from VCs to burn through ahead of an IPO in 5yrs time. However if reports of a 1.5% interest rate are true, then Marcus will immediately leapfrog Virgin and Sainsbury’s Bank to the top of the savings best buy tables. Read more
Fintech eyes opportunity in $15 billion title-insurance business - California regulators gave title insurance startup States Title the go-ahead to operate as the state's first tech-focused title insurer. The title insurance business is currently dominated by a handful of established players. Read more
Ant Financial delays plans to IPO - The digital payments affiliate of Alibaba has postponed plans to IPO due to declining profitability and tightening liquidity. In spite of its first-quarter losses, the company breached a $150b valuation in late May. Read more
Why banks are giving tellers raises, instead of firing them all - It turns out people want to find answers without assistance... until they can’t and immediately want help from a qualified banker. Read more
Wall Street erases the line between its jocks and nerds - Whilst a new breed of "traders who code" has emerged, some execs are wary of blurring the role of trader and techie too much, worried that a few lines of glitchy code written by a relative novice could wreak havoc. Read more
Move over millennials, it’s gen Z’s turn to kill industries - This Bloomberg article explores how the “post-millennials”, the generation that will make up 32% of the global population by 2019, might put malls, cash, print magazines and even the NFL in mortal danger. Read more
Saudi Arabia has called off both the domestic and international stock listing - In what would have been the largest IPO ever at a valuation of $2 trillion, Saudi Arabia has halted its plans for a public listing. The advisors have been disbanded from the project for now. Read more
Gemini and other exchanges join forces to police crypto trading - Gemini, Bitstamp, Bittrex, and BitFlyer announced the creation of the "Virtual Commodity Association," a self-regulatory organization to monitor cryptocurrency trading. Read more
90% of employees at major crypto exchange binance receive salary in BNB - Binance puts the (digital) money where its mouth is. According to Binance CEO Changpeng Zhao, 90% of the exchange's employees choose to receive their salary in BNB. Read more
Monzo eyes $1.5b valuation - The London based digital bank approaches unicorn status as its valuation nears $1.5b. It aims to raise $150m in its next round of funding. Read more
Equity Group Holdings eyes payments and e-commerce in Ethiopia – The company's fintech arm, Finserve Africa, is in talks with six Ethiopian banks to collaborate on cross-border mobile payments and e-commerce. Remittances from Ethiopians summed to $4.6b last year. Read more
Select Financings
Bungalow - San Francisco based residential real estate platform has raised $50m in debt financing and $14m in Series A funding, co-led by Khosla Ventures, Atomic VC, Founders Fund, Cherubic Ventures, and Wing Ventures. Read more
ComplySci - New York based regulatory technology software provider has received a strategic investment from Vista. No other terms of the agreement were disclosed. Read more
Consero Global - Austin based accounting software provider has secured $50m in private equity funding from BV Investment Partners. Read more
KoinWorks - Indonesia based P2P lending platform has raised $16.5m in Series A financing, led by Mandiri Capital. Read more
Paidy - Tokyo based e-commerce payments startup has received a strategic investment from Visa for an undisclosed amount. Read more
Previse - London based invoice payment startup has raised $7m in Series A financing, co-led by Augmentum Fintech PLC and Bessemer Venture Partners. Read more
Root Insurance - Columbus based car insurance startup has raised $100m in Series D financing, led by Tiger Global Management. The company is now valued at $1b. Read more
Upgrade - San Francisco based online lending startup has raised $62m in Series C funding at a $500m valuation, led by CreditEase Fintech Investment Fund. Read more
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