Klarna CEO Slams EU Open Banking as a "Failure" in Scathing X Post 🇸🇪
We're also covering Hopper's IPO 🇨🇦, Amex boss feeling the heat from Brex 🇺🇸, Divvy's fire sale 🇺🇸, Moniepoint raising from Visa 🇳🇬, CZ's new $10B fund & the kidnapping of a fintech CEO 🇫🇷
🇸🇪 Klarna CEO Slams EU Open Banking as a "Failure" in Scathing X Post
In a scathing X post, Klarna CEO Sebastian Siemiatkowski didn't mince words when expressing his disdain for the current state of open banking in Europe. His strongly-worded criticism came in response to OpenAI's launch of Operator, an AI agent that can autonomously perform tasks by interacting with web interfaces.
Siemiatkowski revealed that using tools like Operator to access bank accounts is "illegal by law" in the EU, as web access for digital assistants was banned years ago as part of Europe's open banking regulations. He recounted Klarna's acquisition of Sofort, a German startup that built a script-based digital assistant for interacting with banks' user interfaces, and the subsequent legal battle with German banks that led to the birth of open banking in Europe.
Despite the efforts of Siemiatkowski and others to fight for consumers' rights to use digital assistants for accessing their bank accounts, the European Banking Authority's (EBA) decision to mandate the use of APIs instead of allowing fallback to the standard web UI has effectively rendered tools like Operator illegal in Europe.
The Klarna CEO pulled no punches in his assessment of the current state of open banking APIs provided by European banks, stating that they "continue to be broken, lack functionality, and banks add as much friction as they can." He noted that Klarna reports thousands of issues with these APIs every year, leading him to question why open banking hasn't become a larger success in Europe.
As a former fintech founder in Canada, I had always believed that Europeans were years ahead due to their open banking regulations. However, Siemiatkowski's post suggest that even the adoption of open banking in Canada and the US might not solve the problem of fintech apps reliably syncing with users' transaction data.
Interestingly, the Klarna CEO's post raises the question of whether AI agents like OpenAI's Operator could potentially be the technology that eventually makes open banking actually work. If AI agents like OpenAI's Operator become the norm and banks can't figure out a way to block them, maybe, just maybe, this could be the Trojan horse the fintech industry needed to get the damned transaction data.
Source: Global Fintech Insider
🇨🇦 Travel App Turned Fintech Hopper Plans $10B IPO
Montreal-based travel app turned fintech Hopper is planning to go public at a valuation between $5 billion and $10 billion through a dual listing on the TSX and the Nasdaq, CEO Fred Lalonde told Bloomberg. However, he did not reveal what was the timeline and insisted that he would only go public if Hopper were to reach $1 billion in annual sales or be on track get there within 18 months.
The company, which raised $740 million USD from the likes of Goldman Sachs, Citigroup and Caisse de dépôt, now generates most of its revenue from financial products like price freezes and "cancel for any reason" insurance, rather than travel bookings. The startup leverages trillions of data points to offer these financial products through both its consumer app (on which consumers can buy both airfare & insurance products) and B2B partnerships with companies like Capital One and Air Canada. Frederic Lalonde says the company's risk management algorithms have become "an enormous competitive advantage" since being refined during the pandemic.
I had the chance to have an in-person meeting with the then head of growth at Hopper Simon Lejeune (now VP Growth at Wealthsimple) at the very beginning of this shift from travel to fintech… a few days before the pandemic lockdown, in March 2020. When I asked him how the business was doing given the (very real) threat to air travel posed by the coronavirus back then, he told me that sales were going gangbusters since the uncertainty meant dirt cheap air fare and a high demand for Hopper's insurance products. While the pandemic ended up causing multiple rounds of layoffs at Hopper, it seemed it remerged with a stronger business model.
Source: Bloomberg & Global Fintech Insider
🇳🇬 Visa Invests $10M+ in Nigerian Business Banking Fintech Unicorn Moniepoint
Visa has made a strategic investment in Nigerian fintech unicorn Moniepoint. While the exact amount wasn't disclosed, sources say Visa invested over $10 million as part of Moniepoint's Series C round, which now exceeds $120 million and valued the African fintech at more than one billion dollars. The partnership with Visa will focus on introducing contactless payments in Nigeria and leveraging Visa's Cybersource system. Moniepoint will also integrate with Visa Direct for cross-border remittances as it eyes expansion beyond Africa. "With Visa's investment and expertise, we're taking this mission to the next level, creating more opportunities to expand financial access and drive economic growth by reaching underserved communities," wrote CEO Tosin Eniolorunda in a Linkedin post announcing the deal. The deal gives Visa a board seat and entry into Nigeria's SME market, where it currently trails Mastercard and Interswitch's Verve in card issuance.
Source: TechCrunch & Global Fintech Insider
🇺🇸 Amex Boss Admits Keeping Close Watch on Brex and Ramp
American Express CEO Steve Squeri acknowledged fintech challengers Brex and Ramp are "making inroads" in the business payments space. Both startups offer corporate cards with built-in expense management software and automated accounting tools that compete directly with Amex's small business offerings. However, Squeri emphasized that Amex's mix of customer experience and loyalty programs gives it an edge over the fintechs' "cash back" focus. "They both have good products and are making some inroads and we will make sure we are responding to that," Squeri told American Banker, refusing to reveal if Amex intended to acquire fintech companies in the space. Amex latest major acquisition in the space was B2B lender Kabbage in 2020.
Source: American Banker
🇸🇬 Revolut Launches $100 Minimum Robo-Advisor in Singapore
Global neobank Revolut has launched a robo-advisor service in Singapore with a $100 minimum investment and 0.75% annual management fee. The automated investing platform creates personalized portfolios based on users' goals and risk tolerance, with features like portfolio rebalancing and spare change round-ups starting at $10. "We know that many of our customers do not have the time to manage a portfolio or invest in individual securities," said Raymond Ng, Revolut Singapore CEO. The launch follows Revolut's introduction of Flexible Accounts in Singapore and comes ahead of Robinhood's planned entry into the market in 2025.
Source: Fintech News Singapore & Global Fintech Insider
🇺🇸 Rent-to-Own Pioneer Divvy To Sell For Half Its $2B Peak Value
Rent-to-own fintech Divvy Homes, once valued at $2 billion, will be acquired by Maymont Homes, a subsidiary of Toronto-based Brookfield Properties, for $1 billion. “With the last few years being some of the toughest in my career, it was important to me to find a solid landing for our customers”, wrote Adena Hefets (on the picture above), co-founder and CEO, in a Linkedin post announcing the deal. The San Francisco-based startup, backed by Andreessen Horowitz and Tiger Global, struggled as high mortgage rates undermined its model of helping renters become homeowners. The company, which operated over 7,000 homes across 19 US metro areas, allowed customers to choose any house they wanted, with Divvy purchasing it and renting it back while tenants saved for a down payment. The sale talks, which come after several rounds of layoffs, suggest a likely distressed exit as mortgage rates hover around 7%.
Source: The New York Times & Global Fintech Insider
🇬🇧 HSBC Shuts Down Wise Competitor Zing After Less Than a Year
HSBC is shutting down its international payments app Zing after less than a year of operations, cutting approximately 400 jobs. The app, which aimed to compete with fintech leaders Wise and Revolut in the cross-border payments space, stopped accepting new customers immediately and will close all accounts by May 22, 2025. "Zing’s attempt to compete directly with Wise and Revolut was essentially a 'me-too' product, struggling to carve out a unique value proposition" wrote former HSBC COO Ritesh Jain in a post on Finextra, noting that traditional banks often struggle to compete with VC-backed fintechs willing to prioritize growth over short-term profits.
Source: Birmingham Mail & Finextra
🌐 Binance’s $10B VC Arm Rebrands to YZi Labs Amid CZ’s Return
Crypto billionaire Changpeng "CZ" Zhao is converting Binance's former venture capital arm, Binance Labs, into a $10 billion family office called YZi Labs. The ex-Binance CEO, who served four months in prison in 2024 after pleading guilty to failing to implement proper anti-money laundering controls, has brought back Binance Labs founder Ella Zhang to lead the firm and relaunch its signature 12-week startup incubator program. The newly independent firm will manage assets for both CZ and Binance co-founder Yi He while expanding beyond crypto into AI and biotech investments. With plans to grow from 9 to 20 team members, YZi Labs will make investments ranging from $500,000 to $50 million. The company will operate without a formal headquarters, with its team working remotely.
Source: Finance Magnates
🇮🇳 Microsoft CEO-Backed Trading App Groww Eyes $7B IPO
Indian investment platform Groww's parent company Billionbrains Garage has selected JPMorgan and Kotak Mahindra Bank to lead its potential $750 million IPO. The company, which could seek a valuation between $7 billion and $8 billion, operates one of India's leading discount brokers with over 50 million customers. Founded in 2016 by former Flipkart employees Neeraj Singh, Harsh Jain, Lalit Keshre and Ishan Bansal, Groww is backed by Microsoft CEO Satya Nadella, Ribbit Capital, and Tiger Global. The Mumbai listing could happen this year as India remains one of the world's busiest IPO markets, with over $20 billion raised in 2024.
Source: Bloomberg
🇧🇷 Brazilian App Friday Launches AI WhatsApp Payments Using Open Banking
Brazilian financial assistant app Friday has launched an AI-powered WhatsApp payment feature that automatically pulls funds from users' bank accounts through open banking. The new functionality allows customers to pay bills via chat commands without needing a pre-loaded balance in the Friday app. Co-founded by co-CEOs Felipe Castro (front center) and Pedro Gomes (top left), Friday has processed over R$350 million ($59 million USD) in transactions since launch, expects to reach R$500 million ($84 million USD) by end of 2025. The service only allows transfers between accounts with the same owner and includes customizable transaction limits for security.
Source: MobileTime
🇮🇳 CheQ Launches AI Tool to Maximize Credit Card Benefits
Indian bill payment and credit score monitoring platform CheQ has launched CheQ Wisor, an AI-powered credit card assistant that helps users optimize their rewards and spending. The tool provides unified rewards tracking, personalized recommendations, and spending insights targeting users aged 25-45. "Managing credit can often feel overwhelming, with multiple cards, intricate reward programs, and a constantly evolving financial landscape," CEO Aditya Soni told The Times of India. The feature is currently in beta with whitelisted users getting early access.
Source: The Times of India
🇫🇷 French Police Save Crypto CEO After Kidnappers Cut His Finger
David Balland, co-founder of the crypto wallet maker Ledger, have been rescued after a violent kidnapping that involved kidnappers cutting off Balland's finger when their cryptocurrency ransom demands weren't met. French police arrested 10 suspects aged 20-40 after a massive 48-hour manhunt involving 230 officers. The kidnappers demanded ransom in bitcoin from another Ledger co-founder, using WhatsApp and VPN to mask their location. Police sent $100,000 worth of bitcoin to buy time while tracking the criminals.
Source: Le Monde
Upcoming Fintech Events
🇮🇳 The Bharat Fintech Summit will take place in Bombay on February 5-6, 2025 (94 USD), with speakers such as Balaji Rajagopalan, CTO of the State Bank of India & Anup Agarwal, CEO of Mintifi.
🇳🇱 Banking Renaissance will take place in Amsterdam on February 19-20, 2025 (1,263 USD), with speakers such as Giorgi Shagidze, CEO of maib & Ivar Lammers, Global Head of Financial Crime at ING Bank.
🇬🇧 Finovate Europe will be held in London on February 25-25, 2025 (2,399 USD), with speakers such as Joris Hensen, co-lead of co-lead Deutsche Bank API Program & Joanne Phillips, managing director for Aviva Direct Wealth.
🇺🇸 The Bank Automation Summit will be held in Austin on March 3-4, 2025 (632.50 USD), with speakers such as Michael Lehmbeck, CTO at BankUnited and Koren Picariello, head of generative AI strategy for Morgan Stanley Wealth Management.
🇺🇸 Fintech Meetup will take place in Las Vegas on March 10-14, 2025 (2,800 USD), with speakers such as Leif Abraham, co-CEO of Public.com & Misha Esipov, CEO of Nova Credit.
🇨🇦 The Canadian Fintech Summit will be held in Toronto on April 8th, 2025 (221 USD), with speakers such as Darcy Tuer, CEO of ZayZoon and David Nault, GP at Luge Capital.
🇺🇸 Stablecon will take place in New York on May 29, 2025 (1,295 USD), with speakers such as Cuy Sheffield, Head of Crypto at Visa and Edward Woodford, CEO & Co-Founder of Zero Hash.
Who Am I?
Hi, my name is Julien Brault.
From 2017 to 2024, I was the CEO of Hardbacon, a fintech I co-founded, which reached 400,000 unique visitors at its peak.
A Google update ultimately sealed the company’s faith and I started this newsletter to keep myself busy in the aftermath.
I’m now product manager for Beeye, an AccountingTech SaaS.
Why share this?
Because my goal is to use my experience as an economic journalist, fintech entrepreneur and product manager to present the most essential fintech news from around the world through the eyes of an insider.
If you like what I do, feel free to share this newsletter and follow me on Linkedin.