Embedded finance, or why fintech mega VC rounds have change into so widespread – TechCrunch

How dozens of fintech firms lastly discovered the method for earnings

One other day, one other monster fintech enterprise spherical.

This morning, it was personalised banking app MoneyLion, which raised $100 million at a close to unicorn valuation. Final week, it was N26, which raised one other $170 million on prime of its $300 million spherical earlier this 12 months. Brex raised one other $100 million final month on prime of its $125 million Sequence C from late final 12 months. In the meantime, firms like funds platform Stripe, financial savings and funding platform Raisin, traveler lender Uplift, mortgage backers Mix and Higher, and financial savings depositor Acorns have additionally raised huge new rounds this 12 months.

That’s all on prime of 2018’s record-breaking 12 months for fintech, which noticed $52.5 billion of funding stream into the area based on KPMG’s estimate.

What’s with all the cash flowing into the fintech world? And what does all this funding portend not just for the business and different potential entrants, but additionally for patrons of economic companies? The reply is that this new wave of fintech startups has discovered embedded finance, and that it’s altering the whole economics of disruptive monetary companies.

First, this isn’t (actually) about blockchain

Let’s get one factor out of the best way instantly, for at any time when the subject of economic companies and digital disruption come collectively, some blatherer at all times yells blockchain from the proverbial again row (usually with a little bit of foaming on the mouth I’d add).

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