CFTE Newsletter – 22nd July to 29th July

Fintech detectives, CBI Insights, on the mark again 
CBI Insights, the tech market intelligence supremo’s released their Global Fintech Report for Q2, which made for very interesting reading.

  • $5.2bn raised in Q2, taking the years total to over $8bn and on track to beat 2016’s high of $13.5bn+
  • 5 new Fintechs join the unicorn (aka startups with $1bn+ valuations) club in Q2 meaning there are now 26 globally.
  • 500 startups (who we share our offices with) is still the biggest investor in global Fintech companies

Proxy war between Asia’s tech giants is bubbling nicely
Didi Chuxing, the company that ousted Uber from the Chinese ride-sharing market, and Japan’s Softbank have invested $2.5bn in Singapore’s Grab, another ride-sharing startup.

Grab dominates the market in SE Asia along with Go-Jek, its Indonesian based competitor – who received funding from another Chinese tech giant, Tencent. Both offer payment services to their network of users. It’s this kind of cross fertilisation of services that is accelerating the growth of the mobile payments in the region and underlines the rich variety of opportunities for Fintech to flourish in Asia.

Edging closer to a cashless world
In terms of development, the payment sector is far ahead in market maturity relative to other sectors in Fintech. As such, the market is buzzing with activity as the major players jostle to gain the edge over the competition. Here’s just a small piece of the action:

  • Amazon seems intent on diversification wherever possible, with Amazon Pay they’re shaping up to take on PayPal, Visa et al.
  • TransferWise has teamed up with Apple to allow users to make transfers via Apple Pay.
  • PayPal, whose user base tops 210m, made its move into China’s estimated $5.5tn mobile payments market by teaming up with Baidu. Although, they have their work cut out since Alibaba and Tencent dominate the market with their mobile wallet services.

So incumbents do like Fintech!
UK Based insurance group Aviva seems to be embracing Fintech with open arms. The insurer launched its first incubator in partnership with Founder’s Factory. In a bid to streamline insurance processes, it’s already chosen the first five startups across AI, VR and blockchain to invest in. The company clearly see’s big potential in Fintech and has taken an even more ambitious step of developing its own startup in-house called Oncare, a platform to help keep track of patient records.

US tech giant’s still tearing up the market
Major tech companies report their earning calls for the week:

  • 24th July, Alphabet (Google parent company): YOY revenue up 21% to $26bn. YOY profits were $6.87bn, however, with EU antitrust fine they dropped to $4.1bn. The amount it earns on cost per click (CPC) fell more than was expected, shares subsequently fell by 3% when earning announced. 
  • 26th July, Facebook: Company beat expectations on all fronts! YOY revenue up 47% to $9.3bn, YOY profits were up 71% to 3.89bn, the majority of revenue coming from mobile as the social media giant adds more video ad units to increase its total ad inventory. Its ad revenue grew at twice the rate of Google.
  • 27th July, Amazon: YOY sales grew over 24% to $37.96bn, beating Wall Street expectations. However, Amazon totally missed the mark with its EPS and that sent shares tumbling. It matters little since investors generally focus on its top line growth as opposed to bottom line. Just as well because operating profit is down 77% on previous year at $197m! It does mean Jeff Bezos is no longer the richest man in the world

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