Challenger banks proceed to make important waves on the earth of finance, with smaller outfits luring clients away from incumbents by offering a better means for them to not solely interact with primary banking providers, however to faucet right into a wave of know-how that brings extra personalization and sometimes higher offers into the equation. In the most recent improvement, Viva Wallet, a Greek startup constructing banking providers aimed toward small and medium merchants, has picked up financing of $80 million, cash that will probably be utilizing to develop its footprint and the providers that it’s providing to customers, particularly increasing its Merchant Advance loans business.
The firm is already reside in 23 European markets and plans quickly to develop that to Croatia, Hungary and Sweden.
The funding is notable partially due to who’s doing the investing. Tencent — the Chinese know-how large behind Wechat that can also be making major inroads into financial services — is within the spherical, alongside the European Bank for Reconstruction and Development (EBRD) and Breyer Capital.
Viva Wallet isn’t disclosing its valuation proper now, however Yannis Larios, the corporate’s VP of technique and business improvement, confirmed to us that it’s in the midst of closing a big Series D — last August sized at €500 million ($603 million) — that can worth it at €1.5 billion ($1.8 billion). This is a giant leap: he additionally famous that when Viva Wallet closed its Series C within the second half of 2019, it was valued at €305 million.
When it closes, the Series D will probably be used, in response to a report in Reuters, to assist Viva Wallet construct out a brand new type of mortgage guide round its Merchant Advances and different loans that it gives to clients. Essentially, if permitted by regulators, traders would get stakes in a brand new authorized entity, a particular goal car, that can maintain the loans. This isn’t sometimes how debt from loans is dealt with by neo-banks, however evidently the logic is that it may give the startups extra agility to scale quicker by eradicating among the danger from its stability sheet. (The draw back: probably much less accountability round these loans?)
The spherical is notable for coming at a time when Europe is slowly, hopefully poking its head out from underneath the burden of the Covid-19 pandemic, which has shaken and knocked over many an economic system already wobbling even earlier than the general public well being disaster. Focused totally on merchants, Viva Wallet is a chief instance of the type of tech business which may assist a few of these essential companies get well.
“We are excited to onboard Tencent, EBRD and Breyer Capital to Viva Wallet,” mentioned Haris Karonis, Founder and CEO of Viva Wallet, in a press release. “We are confident that our investors’ extensive know-how and network of partnerships will accelerate Viva Wallet’s plan to unify the fragmented European payments market. The technology innovations that we are bringing forward to European merchants will help them provide a frictionless, localised payment experience to all their clients, and liberate them from the hassle of maintaining legacy card terminals.”
If you assume that the world of neo-banks could be very crowded — and that particularly neo-banks focussed on the SMB alternative can also be getting crowded (among the different contenders embrace Finom, Wise out of the US, Monzo, Penta, Starling, and ANNA amongst many others)– one motive why Viva Wallet is getting some consideration is due to its traction and observe file up to now.
Larios says that the startup has been worthwhile as of Q1 of this 12 months, on the again of a business that has grown by greater than 40% within the final 12 months, with 60,000 merchants at present lively on its books. It’s on observe, he mentioned, for that quantity to be 100,000 by the top of this 12 months.
One motive for its success, he mentioned, is that it’s taken a really localized strategy to progress, establishing operations with bodily branches in every of the nations the place it’s lively — considerably of a retro concept in at present’s market the place banks are often shutting down their brick-and-mortar areas and going digital. “Viva Wallet is proving the resilience of its business model,” he mentioned.
The funding will probably be utilized in half to construct out its loans program but additionally to develop areas the place Viva Wallet is already sturdy. One of those is its level of sale Tap-On-Phone answer, which turns any Android system (smartphone, pill or enterprise system) right into a card terminal, to simply accept each contactless and PIN funds with out the necessity for separate {hardware}. (Most POS programs use small, separate terminals that can hook up with a pill or cellphone.)
He additionally mentioned there will probably be some M&A sooner or later to develop to extra markets extra shortly.
One space the place the corporate won’t develop is into the patron area. Other neo-banks like Revolut and Atom have leveraged their traction with youthful customers to maneuver into offering providers for the enterprises that they discovered, however Larios that that’s not a technique that Viva Wallet will take within the reverse, not least as a result of the patron market has up to now confirmed to be a tough-margin (and even bad-margin) recreation.
“Viva Wallet focuses on businesses only and will continue to do so!” he mentioned (exclamation his!). “The client phase isn’t offering any area for profitability and we’re seeing that every one competing neo-bank business fashions specializing in customers are principally burning cash away.
“We are focusing on the SMEs of Europe, providing a pan-European payments solution which however is very much localized to address merchants’ true local needs in terms of local payments acceptance, local IBAN accounts, local BIN business debit cards etc.” But whereas Viva Wallet might have numerous SMB clients — and the EBRD funding is unquestionably being made to endorse that — he factors out that it additionally consists of medium companies and a few enterprises — bigger merchants like grocery store chains, for instance — and that will probably be an space it would proceed to develop in.
This offers Viva Wallet sufficient specialization and differentiation, alongside its profitability in targeting these areas up to now, to usher in the large identify traders eager to faucet into financial restoration, each to assist that alongside and to journey the wave of that because it pays dividends.
“We are very excited to help Viva Wallet unify the fragmented European payments ecosystem across 23 countries. Viva Wallet is at the forefront of a paradigm shift for fintech and together, we expect to transform the payments industry in Europe” mentioned Jim Breyer of Breyer Capital, in a press release.
“Tencent shares Viva Wallet’s aspirations of creating value for users and partners through innovation. We look forward to supporting Viva Wallet in its expansion across Europe,” added Danying Ma, MD of Tencent Investment.
source https://infomagzine.com/greeces-viva-wallet-raises-80m-for-its-neo-bank-targeting-small-business-merchants-techcrunch/
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