In success stories, we profile some of the key stories in Fintech and payments this month, focusing on areas of growth, resilience and innovation.
It’s a green theme this month, with outstanding investment statistics, a carbon offset market and clever new recycling schemes. We also delve into fresh crypto innovation and fintech fraud fighters.
Climate fintech funding 3x higher than all previous years combined
New data published by CommerzVentures reveals funding for fintechs driving net-zero economies hit a record high in 2021.
The report highlighted several key findings:
1. Venture Capital funding for climate fintech was three times higher than in all previous years reaching $1.2bn.
2. Europe is ahead of the US in terms of total funding volumes - $624m vs $576m. The US has a higher average funding per company however.
3. 68% of climate fintechs are at the seed and pre-seed stage. 23% have raised a Series A, and 9% a Series B, or later.
4. Carbon offsetting and carbon accounting are the most popular sub-categories. CommerzVentures identified:
o 101 startups in carbon offsetting
o 68 in carbon accounting
o 29 in impact investing
o 27 in ESG reporting
o 21 in climate risk management
o 17 in each of the sustainable banking and supply chain analytics groups
o 7 in impact financing
o 5 in carbon credits trading
5. B2B climate fintechs raised nearly six times more funding in 2021 than B2Cs ($1bn vs $179m). B2B funding continues to outpace B2Cs - at 3.4x versus 2x.
6. Decentralised finance is the biggest theme to watch out for in the climate fintech sector. Infrastructures for the tokenisation of carbon are already being constructed.
More banks join blockchain-based carbon marketplace
Speaking of carbon infrastructure, several new banks have joined Project Carbon, a bank-backed initiative to create a blockchain-based marketplace for firms to buy and sell carbon offsets.
Launched as a pilot in August by NAB, NatWest, CIBC, and Banco Itau, the scheme is now joined by UBS, Standard Chartered, and BNP Paribas.
The project platform is still under development but is expected to be operational by the end of 2022, under the name, Carbonplace. Users will be able to check the price history of available carbon credits as well as the documentation relating to their quality and integrity.
All customer transactions will be recorded on the blockchain ledger providing proof of ownership and reporting for post-transaction settlement. Only carbon credits verified according to internationally-agreed standards will be processed on the platform.
Recycling pilot uses digital payments to fight against single-use plastic
Mastercard is working with sustainable payments specialist Helpful and the Scottish Grocers' Federation to trial a scheme that will pay 20p to Scots via digital wallets when they return single-use plastic bottles.
The trial will see participants rewarded with 20p for every container they return through the ‘Recycle Glasgow’ app. Users scan a barcode on the bottle, put it in a smart recycling bin or hand it over to the shopkeeper, and get the refund directly into their ‘Helpful’ digital wallet.
The partners claim that their scheme is set to reduce Scotland’s CO2e emissions by 160,000 tonnes a year, the equivalent of taking 83,000 cars off the road. For every bottle recycled a tree will be planted via Mastercard's Priceless Planet Coalition, which seeks to restore 100 million trees by 2025.
Crypto Debit Card
Hi teams up with Contis to launch crypto debit card
Crypto exchange and mobile banking platform Hi has partnered with BaaS player Contis on a debit card that lets shoppers pay with their digital assets at over 60 million merchants.
This unique offering brings crypto into the world of everyday spending, meaning Hi members do not need to liquidate assets before spending. Instead, any crypto in a Hi account can be converted automatically to fiat at the point-of-sale.
The Hi debit card will also come with BNPL functionality, allowing members to decide exactly when their digital assets get converted.
Sean Rach, co-founder, Hi, says: “Our goal is to overcome one of the most significant challenges in the market today - making it simple and seamless for people to spend crypto.”
Fintech Fraud Fighters
Sardine raises $19.5m to help fintechs fight fraud
Sardine is a behaviour-based fraud and compliance platform for fintechs developed by Coinbase, Revolut and PayPal veterans. Sardine has raised $19.5 million in a Series A funding round, and is joined by Andreessen Horowitz, NYCA, and Experian.
Sardine's core technology uses AI to provide real-time fraud scores based on user identity, device, and behaviour patterns at the time of account origination and account funding. It also continuously monitors for fraud during account login, deposits, and withdrawals.
The technology is now used by over 50 firms, including neobanks and crypto exchanges, which integrate Sardine’s SDK into their web and mobile apps. The startup also added instant bank ACH transfers for crypto on-ramps, removing the traditional three to seven day waiting period for consumers to gain access to their funds.
Soups Ranjan, CEO, Sardine, says: “It is incredibly hard to establish trust in whether someone is using their own bank account to load money into a wallet or a stolen one. Sardine has built a behaviour-based platform which uses tens of thousands of data points about a user’s behaviour and combines that with dozens of data sources, ranging from phone and email to social media and blockchain analytics, to establish a real-time trust score.”
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