The Fintech Files: VC funding craters in London, and ‘The Merge’ beckons
Cities like Ron Kalifa still like to present London as fintech’s beating heart on this side of the Atlantic – but new research shows the pace is slowing.
Venture capital and other investment in the sector in the UK fell to $9.6 billion in the first half of the year, a massive drop from $27.8 billion in the same period in 2021, according to KPMG.
The consulting giant blamed factors such as the war in Ukraine, soaring inflation and rising interest rates. But the report also pointed to London Stock Exchange Group’s $14.8 billion deal to buy Refinitiv last year — a big one-off that flattered that period versus now.
Attempts by KPMG’s global fintech leader Anton Ruddenklau to be excited about the numbers were muted at best. He said that after last year’s unusually large total, the first half was “quite positive” – a ringing recommendation if ever we heard one.
But not only did total investments fall – so did the number of investments. In total, there were 262 fintech deals, including M&A, private equity and venture capital in the first half of the year, compared to 341 in the same period in 2021.
Always an optimist, Ruddenklau added that despite uncertainty in the market, fintech’s saving grace is that it has a wide range of subsectors, such as regtech, which has become more popular since Russia invaded Ukraine amid strong interest in anti-money laundering applications .
That could keep investment “relatively solid,” he said.
Don’t get carried away, Anton.
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The merger
Institutions keeping an eye on crypto over the summer will have noticed a growing buzz around the Ethereum Merge – a software upgrade to the world’s second largest cryptocurrency and blockchain.
Well, it’s finally upon us. The massive process of migrating all of Ethereum’s data and future operations to a new system is underway and could be completed by September 15th.
The process can cause headaches for some in cryptoland. Take struggling crypto lender Hodlnaut, which recently warned that its assets could be at risk if the merger increases volatility in the digital asset space.
But while many people understand the basic premise of the transition (to make Ethereum less harmful to the environment), it remains a complex subject. So here are some Financial news articles about the merger for those who want to get started.
Five things to know about ‘The Merge’
“The Merge” could be a landmark moment
Why “The Merge” Matters to Institutional Investors
Here’s what “The Merge” means for the crypto industry
Why ‘The Merge’ Could Boost Coinbase Stock
JPMorgan buys (another) fintech firm
Whatever one thinks of Jamie Dimon, the outspoken JPMorgan chief has kept true to his word when it comes to buying up fintech companies.
Last year, the bank chief said fintech was one of the “enormous competitive threats” to banks and said he would be more aggressive in acquisitions in the area.
Now he has bought a fourth major player in 15 months, acquiring the cloud payment company Renovite. The bank said the deal would help it build its “next-generation merchant” platform, which processes payments on behalf of businesses, and help it modernize its payment offerings.
“This acquisition will help us achieve our goal of developing the next generation payment processing platform globally,” Max Neukirchen, the bank’s global head of payments and commerce solutions, said in a statement.
In January, the bank agreed to take a 49% stake in Greek payments company Viva Wallet. It also agreed to buy Global Shares of Ireland in March and UK digital asset manager Nutmeg last year.
Our favorite stories from around the web
Electricity bills are rising and crypto mining equipment isn’t worth what it used to be. For companies in space, it is a big problem, reports the Wall Street Journal.
Elsewhere, Decrypt takes a look at another side of the Ethereum merger: What could potentially go wrong (spoiler: a lot).
And finally, an online community cheered when bitcoin crashed earlier this year, reports Guardian. Its name? Buttcoin. You know you want to keep reading…
The last word
As the world pauses to mourn the death of Queen Elizabeth II, one community has decided to cash in on her passing.
In the hours following the September 9 announcement, non-fungible token market OpenSea was flooded with thousands of newly minted NFTs themed around the queen, according to Fortune.
The NFTs listed for auction on OpenSea included digital stamps featuring the Queen’s profile and photographs of the Queen with glowing red eyes – a common edit on portraits that has become popular in crypto circles.
Meanwhile, on some decentralized crypto exchanges, tokens with names such as Queen Elizabeth Inu, QueenDoge and London Bridge is Down were also launched.
Stay classy, crypto.
To contact the author of this story with feedback or news, email Alex Daniel
