The payment tech space saw a flurry of activity in mid-January with two series D rounds and an aborted acquisition at corporate-backed companies.
Rapyd, a US-headquartered payment software developer backed by digital payment technology producer Stripe, raised $300m in a series D round led by investment management firm Coatue. Founded in 2016, Rapyd has built a cloud-based platform that enables users to make and receive cross-border payments while creating their own digital wallets, payment cards and financial services tools. The cash will help the company to expand its product and engineering teams as well as seek strategic acquisitions in Europe, the Americas, the Middle East, Africa and the Asia-Pacific region.
M-Service, the Vietnam-based payment technology provider backed by financial services firm Standard Chartered, secured more than $100m in series D funding, co-led by venture capital firm Goodwater Capital and private equity firm Warburg Pincus. M-Service is the owner of Momo, a mobile wallet with 23 million registered users that offers one-touch online payment service to its users through partnerships with 28 Vietnamese banks. The company aims to increase its user base to 50 million, at which time it would look to begin offering data-based services such as credit scoring to financial firms.
Payment services firm Visa agreed to terminate its $5.3bn acquisition of portfolio company Plaid, a US-based provider of banking and financial data transfer software. The deal had been agreed in January 2020 and would have enabled internet and technology conglomerate Alphabet, financial services firm Citi and payment service providers Mastercard and American Express to exit. However, the US Justice Department filed an antitrust lawsuit, citing a threat to competition in the debit card market. The companies have decided to cancel the deal instead of fighting the suit. Plaid has created an open banking platform that helps organisations build financial services applications for use by their customers, in areas such as personal finance management, lending, payments and wealth management.
The payment tech space in general has seen much attention from corporate venture investors, as the historical bar chart from GCV Analytics below shows. The number of corporate-backed deals in this space reached its all-time-high in 2019 but declined through 2020. The latter was likely due to the covid-19 pandemic and the unexpected boost it gave to this space, which may have driven valuations up significantly.
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