Key takeaways

• Regulations

  • The UK joins global efforts to regulate the cryptocurrency industry: Following several cryptocurrency regulatory developments in the US as well as the EU's finalization of the Markets in Crypto Assets (MiCA) regulation earlier in 2023, the UK announced a set of recommendations in October 2023 to regulate the cryptocurrency industry by 2024. It intends to subject cryptocurrency companies to restrictions similar to those of banks and other financial institutions.

• Funding

  • Overall funding volumes declined despite BNPL startups attracting mega deals: The FinTech sector saw total funding decline 40% YoY to USD 4.3 billion in Q4 2023 (compared with USD 7.2 billion during Q4 2022). The sector witnessed 11 mega deals (USD 100 million+) compared with 21 in Q4 2022, collectively raising more than USD 2.8 billion (~66% of total). During the quarter, the Buy Now, Pay Later (BNPL) industry, accounting for four mega deals, emerged as the highest-funded industry, comprising 37% of total funding. Tabby, a leading BNPL provider, notably secured the most funding, leading up to its planned IPO in Saudi Arabia. The company successfully obtained a USD 700 million credit line from JP Morgan and further raised USD 250 million in Series D funding, reaching a post-money valuation of USD 1.5 billion. These funds were earmarked to strengthen its balance sheet in order to meet growing demand for its BNPL offering.

• Product updates

  • Increased adoption of AI-powered products across multiple industries: During Q4 2023, we counted ~60 product launches, with the rising adoption of AI-powered products, particularly GenAI. This trend was observed across industries such as Neobanks, Business Expense Management, and Wealth Tech & Sustainable Finance, as companies look to incorporate GenAI assistants to complement their core offerings. For example, Bunq, a Dutch neobank, launched Finn, a GenAI chatbot to replace the search function within its app, enabling users to enquire about their finances in natural language, covering aspects from spending habits to account details. Furthermore, other new product launches by startups were mainly geared toward complementing and diversifying existing offerings.

• Partnerships

  • Activities centered around expanding market reach and developing new AI-powered products: Most partnership activities within FinTech during the quarter were related to growing business and market reach by leveraging counterparties’ expertise and market presence in new geographies. Similar to product updates, partnerships were focused on developing new AI-powered products, particularly within the Business Expense Management and Neo Insurance industries, with disruptors such as Basware and Ramp partnering with Microsoft to develop GenAI products and services.

• M&A

  • We counted 14 M&A transactions within the FinTech sector in Q4 2023. Most were centered around enhancing existing product offerings by acquiring companies that provide complementary services. The most valuable deal was JAB Holding’s acquisition of Embrace Pet Insurance for USD 1.5 billion, as the company sought to strengthen its presence in the global pet insurance industry. In addition, companies were using M&As as a strategic approach to swiftly penetrate new markets and diversify their geographical presence.

• Outlook

  • Adoption and integration of GenAI technologies to intensify: As GenAI applications continue to disrupt the market, the FinTech sector is poised for significant integration of this technology. Companies are strategically incorporating GenAI assistants to offer customer support, along with enhanced insights and analytical capabilities. Moreover, this disruption is expected to yield substantial improvements in internal workflows, with companies leveraging tools like Microsoft Copilot to boost employee productivity as well as ensure regulatory compliance and enhance fraud detection and prevention within the FinTech landscape.
  • Funding volumes expected to recover in 2024, as inflationary and regulatory headwinds ease: In November 2023, the US inflation rate hit its lowest point in five months, registering at 3.1%, according to the Consumer Price Index, compared with an annualized target of 2%. Analysts now project possible rate cuts as early as March 2024. The potential easing of monetary policy is anticipated to serve as a catalyst for funding across FinTech industries, after a 23% YoY decline to USD 28.5 billion in 2023. Furthermore, VC appetite is likely to favor early-stage startups due to the potential for higher future returns as well as those that demonstrate strong profitability.

Regulatory updates: The UK publishes proposals to establish cryptocurrency regulations by 2024

Analyst take: Regulation of the crypto industry continued in Q4 2023, with a focus on protecting investors, preventing money laundering, and restoring financial stability following the collapse of crypto exchanges such as FTX and BlockFi. The UK joined the ranks of countries announcing their intention to implement new cryptocurrency legislation by 2024, similar to the EU's MiCA law, reflecting a global effort to regulate the industry.

FinTech: Blockchain

• In October 2023, the UK Government announced plans to regulate the cryptocurrency industry by 2024, following the footsteps of the EU's MiCA regulation, which was finalized in May 2023. It intends to subject several cryptocurrency activities to the same regulations that govern banks and other financial institutions. The UK Government also stated that the issuance or custody of stablecoins backed by fiat currency will be regulated under existing 2001 rules for financial services and emphasized its reluctance to ban decentralized finance (DeFi), deeming it premature. The UK FCA is also set to initiate consultations on establishing an authorization regime for cryptocurrency companies. Following this, Revolut, a UK-based neobank that offers a trading platform for cryptocurrencies, announced that it will temporarily suspend its crypto services for UK clients starting January 3, 2024, to better align itself with the new requirements.

• Another noteworthy development included the Philippine Government selling its maiden tokenized treasury bonds worth USD 270 million through the Bureau of Treasury in November 2023 as part of its roadmap for digitalizing government securities. This issuance is notable for serving as a proof of concept for the broader application of distributed ledger technology in the government bond market.

• The quarter also witnessed significant developments in high-profile criminal cases involving Sam Bankman-Fried, the founder and former CEO of FTX, and Binance and its former CEO, Changpeng Zhao.
  • Bankman-Fried faced seven charges, including wire and securities fraud, related to the misuse of investor funds and the collapse of FTX and its sister company, Alameda Research (a hedge fund) in late 2022. The trial commenced in October 2023, and, following a month’s proceedings, the jury rendered a verdict of guilt on all seven charges against Sam Bankman-Fried. The sentencing hearing is scheduled for March 28, 2024, with the potential for him to face up to 110 years in prison.
  • Furthermore, in early 2023, the US Securities and Exchange Commission and Commodity Futures Trading Commission charged Binance and its then-CEO, Changpeng Zhao, with the listing of unregistered securities on its exchange for US investors, as well as with federal money-laundering allegations. However, as part of a USD 4.3 billion settlement with the Department of Justice, Zhao pleaded guilty and stepped down from his role in November 2023 while Binance agreed to appoint a federal monitor to oversee its operations for three years. Moreover, Zhao will personally pay a USD 150 million civil monetary penalty and be barred from all future engagement with Binance. He is currently detained in the US and faces up to 18 months in prison, with his trial scheduled for February 24, 2024.

Funding: Dip in overall funding volumes despite BNPL startups attracting mega deals

Analyst take: Funds raised across the FinTech sector declined during the Q4 2023, reflecting decreases both QoQ and YoY. This was primarily attributed to fewer mega deals (valued at USD 100 million+) completed during the period. However, funding volumes of BNPL—the highest-funded industry this quarter—increased significantly (up 47.7% YoY), largely due to the concentration of mega deals (four) within the industry. Additionally, demand for debt financing persisted similar to Q3 2023, accounting for six of the 11 mega deals, owing to low venture capital activity amid valuation markdowns.

• In Q4 2023, companies across FinTech raised USD 4.3 billion across 93 rounds. This marked a significant decrease of 40.4% compared with the same period in the previous year (USD 7.2 billion across 143 rounds) and nearly 60% lower than the amount raised in Q3 2023 (USD 10.5 billion). This was caused by a significant drop in funds raised across the Neobanks (down 75.4% YoY) and Business Expense Management (down 65.5% YoY) industries, partly offset by improvements in BNPL (up 47.7% YoY) and Commercial InsurTech (up 5x YoY).

• The FinTech: Banking and Infrastructure sector, which accounted for 68.2% of all funds raised, declined 36.3% YoY to USD 2.9 billion, followed by FinTech: Blockchain (an 8.4% share), which dipped 32.0% YoY to USD 0.4 billion. However, the InsurTech sector, which accounted for 12.6%, increased 66.6% YoY to USD 0.5 billion.

• In Q4 2023, the average deal size also saw a slight decline to USD 46.4 million from USD 50.7 million in Q4 2022. This can be primarily attributed to the lower funds raised as well as fewer mega deals during the quarter, particularly within FinTech: Payments, where the average deal size fell to USD 44.7 million from USD 68.9 million. However, the FinTech: Banking & Infrastructure industry witnessed the average deal size improve to USD 79.6 million from USD 72.3 million, owing to larger deal sizes despite a decline in overall funding value.

• Tabby, a UAE-based BNPL platform, raised the most funds during the period, securing a USD 700 million debt facility from JP Morgan and raising USD 250 million in Series D funding (conducted across two rounds), ahead of its planned IPO in Saudi Arabia. The equity round propelled the company to unicorn status, boasting a valuation of USD 1.5 billion. Tabby earmarked the fresh funds to strengthen its balance sheet in order to meet growing demand for its BNPL offering.

• Other notable funding rounds include payment infrastructure provider Balance securing a USD 350 million credit facility and BNPL provider Tamara raising USD 340 million in Series C funding.

• There were 11 mega deals in Q4 2023, with four attributed to BNPL and three to Neobanks. Collectively, these rounds contributed nearly USD 2.8 billion (~66%) to the total funds raised during Q4 2023. In comparison, there were 21 mega deals in Q4 2022, collectively raising over USD 5.1 billion and accounting for 71% of total funds raised. Additionally, the number of mega deals fell compared with Q3 2023, which recorded 17.

Top 10 funding rounds across FinTech Services (Q4 2023)

Product updates: Launch of AI-powered products pick up

Analyst take: A notable trend observed across companies in the FinTech sector during the quarter involved the increased launch of AI-powered products; companies are expanding the use of GenAI, launching products at a rate not seen in previous quarters. Other new product launches by startups were mainly geared toward complementing and diversifying existing offerings. Incumbent activity was limited during the period; nevertheless, there were notable product launches, including DZ Bank and Coinbase introducing digital asset custody and issuance platforms.

FinTech: Banking and Infrastructure

• Enhancing investing services a key priority for neobanks
  • Revolut, a global neobank, was the most active during the period. In October, it expanded investment options for its European Economic Area (EEA) customers by introducing European-listed stocks to its platform. Additionally, during the same month, it introduced a new subscription plan named Trading Pro that was specifically designed for advanced traders in the EEA region, priced at EUR 15 per month. The plan includes a desktop trading terminal with portfolio analytics and access to market insights, along with benefits such as higher order limits and lower commission fees on trades exceeding limits.
  • Greenwood, a neobank catering to African-American and Latino individuals and businesses, launched Greenwood Invest, an investing app with access to over 5,000 stocks and ETFs. The platform also provides educational resources on investing.

• Neobanks serving SMEs and startups launch improved checking account offerings
  • Grasshopper introduced Accelerator Checking, a checking account offering numerous benefits, including a partnership ecosystem tailored to cater to the needs of startups. Additionally, Bluevine unveiled a new plan named Bluevine Premier, which enables business owners to earn a 4.25% annual percentage yield on their Bluevine Business Checking balances up to USD 3 million while enjoying discounts on standard payment fees and access to priority customer support.
  • Furthermore, OakNorth introduced a new everyday business banking solution targeting medium-sized businesses with revenues ranging from GBP 1 million to GBP 100 million in November 2023. It provides each customer with a dedicated "Business Partner," who offers tailored OakNorth products and services.

• FinTech Infrastructure and BNPL providers focus on expanding product range
  • In October 2023, Marqeta unveiled a new credit card-issuing platform that allows FinTechs and non-financial services companies to offer consumer and commercial credit card programs with personalized rewards, Just-in-Time Funding functionality, and instant card tokenization features. This launch also coincided with Highnote’s announcement of expanding its product offerings to support consumer credit programs.
  • In addition, Tranch, a B2B flexible payment provider, launched its enterprise suite of payment offerings—Pay Now, Pay by Card, and Pay Later—specifically tailored to the software and services industry.

• Other startups integrate AI for superior customer support
  • Klarna, a Swedish BNPL provider, launched an AI-powered image recognition tool within its app, enabling users to find similar products by scanning items with their phones. The AI-based image recognition tool was trained using data from PriceRunner, a price comparison service provider that Klarna acquired in April 2022.
  • Bunq, a Dutch neobank, launched a GenAI chatbot called Finn, replacing the search function within the Bunq app. Finn has a chat-style interface, enabling users to ask about their finances, covering spending habits to account details.

• Heightened competition and slow growth forces neobanks to exit unprofitable businesses
  • In November 2023, N26 announced that it will close its Brazil operations, effective December 7, 2023. The decision aligns with the company's strategy to prioritize key European markets in a bid to reduce losses, having previously ceased operations in the US and UK.
  • In the same month, HMBradley announced that it was closing its banking business. Instead, it will focus on selling the technology that powered its banking capabilities to other banks, including anti-fraud solutions.

FinTech: Blockchain

• Incumbents launch digital asset issuance and custody platforms
  • DZ Bank launched a blockchain-powered digital asset custody platform for institutional clients. The platform will provide custody for digital securities and DeFi products. The bank also stated that it plans to leverage blockchain technology to complement its existing capital market operations.
  • In addition, Coinbase launched a blockchain platform called Project Diamond, which enables users to issue and trade digital assets. Its key features include integration with Coinbase’s Ethereum scaling network, Base, as well as support for Coinbase Prime (the company’s custody service) and USDC (Circle’s USD-pegged stablecoin).

FinTech: Payments

• Business Expense Management startups continue to integrate GenAI capabilities to enhance product offerings
  • Aavenir rolled out GenAI advancements to its flagship products with a focus on improving negotiations and vendor performance. Aavenir RFPflow will use GenAI to deliver cost savings through advanced pricing analysis and vendor evaluation by streamlining negotiations and comparing vendor performance against existing contracts, obligations, and KPIs.
  • Airbase added advanced GenAI capabilities to its expense management platform, aiming to streamline expense report creation by automating the extraction of details from receipts. Its AI-driven enhancements support reimbursements in 46 countries and payments in 34 currencies, simplifying expense management.
  • In addition, Medius announced its plan to introduce an AI-powered agent for accounts payable automation in November 2023, which will help streamline invoice approvals with contextual information and proactive prompts.

• American Express initiates biometric authentication pilot in the US; PayEye receives PCI certification for its new terminal
  • In October 2023, American Express initiated a pilot program for biometric authentication during online checkouts, which is seamlessly integrated into the company's SafeKey 3-D Secure tool. The pilot will be initially rolled out to a select number of US customers, with a more extensive rollout planned in early 2024.
  • PayEye, an iris-based biometric POS terminal provider, obtained the Payment Card Industry (PCI) certification for its eyePOS 3 payment terminal in November 2023, ahead of its scheduled commercial availability in early 2024. The new terminal has a dual-mode reader for face and iris biometrics and a display for targeted advertising. Its camera also supports barcode scanning for labels/tickets.

Wealth Tech & Sustainable Finance

• Robo-advisory startups focus on offering a wider range of investment options
  • The quarter saw robo-advisory platform Frec emerging from stealth in October 2023 with the launch of Frec Direct Indexing (its trading algorithm that allows users to track S&P indices and invest with tax savings and customization features) and Nutmeg (a hybrid robo-advisor platform that was acquired by JP Morgan in June 2021), launching its thematic portfolios that allow users to invest in traditional industries that are being disrupted by innovation and technologies such as AI.

• Capital Market Tech players add GenAI assistants to help users with insights and decision-making
  • AlphaSense unveiled two GenAI offerings: AlphaSense Assistant, a GenAI chat allowing users to intuitively extract insights from business and financial documents, and Enterprise Intelligence, which delivers AlphaSense's AI-powered search, summarization, and chat capabilities securely on top of customers' proprietary organizational knowledge and AlphaSense's extensive content data.
  • In addition, FactSet launched the beta version of FactSet Mercury, a large language model-based knowledge agent aimed at junior bankers to help improve their digital workflows and fact-based decision-making.

• Another notable product update involved Trading Technologies (TT) launching two new lines of business, TT Compliance and TT Quantitative Trading Solutions, as part of the company's expansion into new asset classes. These dedicated lines of business expand on TT's previous offerings in trade surveillance and algorithmic/quantitative trading solutions, which were strengthened by its acquisitions of Abel Noser Solutions in August 2023.

InsurTech

• InsurTechs form new coalition to shape future of insurance industry
  • A group of InsurTechs, including Boost, Branch, Clearcover, Lemonade, and Root Insurance, launched “InsurTech Coalition,” a new trade organization dedicated to shaping an ethical and inclusive future for the insurance industry by advocating responsible use of technology, providing better products and pricing to customers, collaborating with regulators to develop new frameworks, and reviewing products to manage risk efficiently.

• Startups launch value additions to complement existing offerings
  • Ranger Insurance, a managing general agent (MGA) for home, renter, and auto insurance, launched Ranger Station, a standalone product designed to help independent agencies and agency networks grow their business and enhance customer relationships. 
  • Fabric, a digital life insurer and subsidiary of Western & Southern Financial Group, introduced the Uniform Gifts to Minors Act product, which allows parents to create and oversee investment accounts for their children until they reach adulthood.

• Insurers roll out AI-powered products to enhance claims processing and customer service
  • Carpe Data, a provider of claims processing platforms, launched ClaimsX Ultra, an AI-assisted platform for early claims fraud detection. ClaimsX Ultra streamlines the collection and analysis of customer data, reducing the need for manual tasks and addressing information gaps. It uses AI to identify early signs of fraud, preventing delayed detections and employs sophisticated algorithms to oversee vendor risk and establish relationships between relevant parties.
  • In addition, Newfront Insurance, a commercial insurance provider, unveiled its AI-powered Benefits Assistant to all Slack-enabled clients. The custom-built chat agent provides 24/7 responses to employee questions about their organizations’ total rewards programs.

Partnerships: Primary focus on expanding market reach and developing new AI-powered products

Analyst take: Partnerships among companies in the FinTech sector were primarily aimed at forging alliances to grow their businesses and expand market reach. Additionally, similar to product updates, partnerships related to AI-powered product launches were prominent in the quarter, particularly within the Business Expense Management and Neo Insurance industries, with disruptors such as Basware and Ramp partnering with Microsoft to develop GenAI products and services.

FinTech: Banking and Infrastructure

• We observed 55 partnerships within FinTech: Banking & Infrastructure, with incumbents accounting for over 35% of them. The most activity was recorded in the FinTech Infrastructure industry (29), followed by Neobanks (13).

• Partnerships within the FinTech Infrastructure industry primarily revolved around business expansion, with Marqeta emerging as the most active participant. It strategically aligned itself with Block to serve as the default provider for issuing processing and related services in both current and prospective markets beyond the US. Additionally, it collaborated with Credit2 to extend installment payment solutions in partnership with European banks. Furthermore, Marqeta forged a partnership with Scalapay, an Italian BNPL provider, aiming to grow its product outreach throughout Europe.

• Other notable partnerships in the FinTech Infrastructure industry include Klarna partnering with Form3 to use Form3's extensive payment processing capabilities to support European transactions and payments and Fiserv collaborating with Melio to launch CashFlow Central (an integrated digital payment and cash flow management solution). Additionally, Fiserv entered a data-sharing partnership with Plaid to allow customers to share data within Fiserv-hosted banks and credit unions on the Plaid network.

• Partnerships within the Neobanks industry centered on digital banking startups collaborating with banking-as-a-service providers to develop and launch digital banking services, such as Alba with nCino and Mambu, and Quontic with Alkami Technology. 

• Other key partnerships within the Neobanks industry include N26 launching a new investing platform in collaboration with Upvest, and Nerdwallet partnering with Bond, an embedded finance platform acquired by FIS, to launch a secured credit card.

• Across the BNPL industry, partnerships featured Afterpay collaborating with Rokt, an ecommerce technology provider, to expand its offerings to advertisement businesses, while Affirm expanded its partnership with Amazon Business to integrate flexible payment options for small businesses at checkout points on the Amazon Business platform.

• Notable partnerships in the P2P Financial Platforms space featured Western Union and Paysend partnering on cross-border money transfer services and Upstart being selected by Mutual Security Credit Union to offer its members personal loans.

FinTech: Blockchain

• Partnership activities within the FinTech: Blockchain sector were focused mostly among incumbents. We observed seven partnerships in Q4 2023: Cryptocurrency accounted for four and DeFi, three.

• Mastercard entered a strategic partnership with MoonPay to explore how Web3 can be used to build loyalty among consumers. In addition, Moonpay will incorporate Mastercard's compliance-friendly Crypto Credential system and payments tech within its offerings.

• Binance partnered with Thailand-based Gulf Energy Development to establish a cryptocurrency exchange named Binance Thai. Other notable partnerships include Uniswap collaborating with Talos to provide institutional traders access to DeFi liquidity.

FinTech: Payments

• We witnessed 20 partnerships in the FinTech: Payments sector, with Business Expense Management accounting for eight, Biometric Payments contributing seven, and Digital Wallets, five.

• In the Business Expense Management industry, a noteworthy trend emerged as startups collaborated with Microsoft to incorporate GenAI capabilities into their offerings. For instance, Basware introduced AskMary, a GenAI chatbot that aids Basware's customer support team in formulating responses to customer inquiries. Similarly, Ramp incorporated AI assistance features into its workspaces, enabling clients to streamline finance task operations and detect anomalies.

• Within Biometric Payments, IDEX Biometrics was the most active. It collaborated with KONA I, a company specializing in smart card technology, to introduce biometric payment cards in both recycled PVC and metal formats for its global banking clients and Eastern Bank PLC to jointly launch a biometric metal card solution in Bangladesh.

• Across Digital Wallets, notable partnerships included PayNearMe partnering with Accertify, a wholly-owned subsidiary of American Express, to integrate the latter’s fraud prevention technology into its MoneyLine Platform. In addition, Citcon partnered with Alipay to enable cross-border mobile payment for US retail merchants.

Wealth Tech & Sustainable Finance

• There were seven partnerships during Q4 2023 within the Wealth Tech and Sustainable Finance sector, with Retail Trading Infrastructure accounting for three.

• Partnership activities within the Retail Trading Infrastructure industry were centered on expanding market reach. Marstone, a digital investment management and planning platform, entered a strategic partnership with Woodforest National Bank to broaden its customer base, leveraging Woodforest’s extensive banking network, comprising over 700 branches across 17 states. Moreover, VRGL, an investment data analytics and extraction platform, collaborated with Steward Partners Global Advisory Group to increase product reach as well as improve innovation by providing enhanced workflows and client engagement services.

• Across Capital Markets Tech, notable partnerships included Bloomberg teaming with Google Cloud to accelerate its data strategies through the integration of Bloomberg's cloud-based data management solution, Data License Plus (DL+), with BigQuery, Google Cloud's fully managed, serverless data warehouse.

• In the Financial Wellness Tools industry, key partnerships include BrightPlan partnering with UKG, an HR, payroll, and workforce management platform, to access employee data of UKG through the BrightPlan platform and use insights gained from employees to provide the right mix of wellness benefits to users.

InsurTech

• We observed 21 partnerships within InsurTech, with Neo Insurance accounting for the majority of partnerships (16), followed by Commercial InsurTech (5). Moreover, incumbents were responsible for more than two-thirds of all partnerships recorded.

• In Neo Insurance, partnership activities featured Five Sigma, a claims management solutions provider, partnering with Google Cloud to integrate AI capabilities into its claims management system. This new AI feature, called AI Assist, is also accessible on the Google Cloud Marketplace. In addition, Swiss Re and Appian, a low-code software development platform, collaborated to launch Connected Underwriting Life Workbench to help insurers streamline and automate end-to-end workflows and data.

• Other key partnerships include State Farm partnering with Sureify, a provider of turnkey life insurance solutions, to launch the State Farm Life Enhanced mobile app, which comprises digital tools to enhance policyholder well-being in exchange for rewards.

• Within Commercial InsurTech, notable partnerships included Federato teaming up with Google Cloud to integrate several new AI capabilities into its RiskOps Underwriting Platform to enhance the underwriting process for insurers through portfolio optimization and appetite assessment.

M&As: Enhancing product offerings main motive for M&As among FinTechs

Analyst Take: During the fourth quarter, M&A transactions were centered around enhancing existing product offerings by acquiring companies that provide complementary services. The most valuable deal during the period was JAB Holding’s acquisition of Embrace Pet Insurance from NSM Insurance Group for USD 1.5 billion, adding to its growing portfolio of pet insurance companies. Furthermore, companies were using M&As as a strategic approach to swiftly penetrate new markets and diversify their geographical presence.

FinTech: Banking and Infrastructure

• FinTech Infrastructure players resort to M&As to expand geographically
  • Airwallex entered an agreement to acquire Mexico-based MexPago, a point-of-sale solution and cross-border payment platform, for an undisclosed amount in October 2023. Through the acquisition, it aimed to leverage MexPago’s business and operational presence in Mexico to enter the Mexican market and expand its product reach geographically. 
  • In addition, Flywire purchased StudyLink, an Australia-based international student admissions, application, and agent management platform, for an undisclosed sum, in a bid to grow its presence and expand in the Australian higher education market. 

• Digital lender Petal up for potential sale following the sale of its B2B data infrastructure and analytics subsidiary
  • Petal was reportedly up for sale, according to sources at private equity and venture companies in November 2023, as doubts loomed over its survival. Petal had chosen Goldman Sachs to broker a deal and was valued at USD 800 million back in January 2022. Moreover, this development came six months after it sold its B2B data infrastructure and analytics subsidiary Prism Data.

FinTech: Blockchain

• M&As aid DeFi companies to expand offerings
  • DTCC purchased Securrency, a platform for tokenizing public and private securities, for USD 50 million. It planned to leverage the acquisition to integrate Securrency's technology with its own to build an institutional post-trade platform that supports a wide range of digital asset products, including tokenized securities. Securrency will continue to operate as a wholly-owned subsidiary of DTCC under the name DTCC Digital Assets.
  • In addition, BitGo, a provider of cryptocurrency custody, infrastructure, and liquidity solutions, acquired HeightZero for an undisclosed sum. HeightZero provides a range of tools, enabling asset managers to seamlessly integrate cryptocurrencies into their clients' portfolios, including features such as portfolio rebalancing, statement generation, and tax loss harvesting. BitGo intends to use the acquisition to extend its offerings to HeightZero's client base, consisting of asset managers and regulated investment advisors.

Wealth Tech & Sustainable Finance

• Wagestream to offer financial services to individuals with poor credit histories following Keebo purchase
  • Wagestream, a UK-based financial wellness platform, acquired Keebo, a digital lender offering credit cards to individuals with poor credit scores, in October 2023. Following the acquisition, Keebo’s suite of products, technology, software, and its workforce are set to become part of Wagestream. Moreover, this positions Wagestream to extend its financial services to individuals with poor credit histories.

• Origin acquires estate planning startup to complement its offerings
  • Origin, a financial coaching and employee wellness platform, acquired estate planning platform MyAdvocate for an undisclosed amount. Through the acquisition, Origin aimed to integrate MyAdvocate’s estate planning tools and expertise into its product portfolio.

InsurTech

• UK-based bicycle insurer Laka pedals into the European market following Cylantro acquisition
  • Laka acquired its French counterpart, Cylantro, an e-bike insurance broker, for an undisclosed amount in October 2023. It aimed to grow its presence in the European market through acquisition.

• Embrace Pet Insurance becomes latest addition to JAB's growing portfolio of pet insurers
  • JAB Holding, the parent company of Independence Pet Group (IPG), acquired Embrace Pet Insurance from NSM Insurance Group for USD 1.5 billion. The acquisition aligns with the company’s ongoing strategy to strengthen its presence in the global pet insurance market. Currently, JAB oversees the ownership of more than 14 pet-related companies in North America and Europe, including Assur O’Poil, FIGO, IPG, Pinnacle Pet Group, and Pumpkin Petcare.

Appendix

Startups that raised funding for the first time in Q4