The big pile of money rolling into Fintech (see here for how that directly effects you), and a how the coverage of BNPL may effect the credit and payments ecosystems.
1. The berserk pace of fintech investing outshines the global VC boom
TechCrunch provide a summary of the CB Insights 2021 State of Venture Report. Fintech startups, by a wide margin, was the largest destination for the record beating funding flow:
Global venture funding reached a record $621 billion in 2021, according to the CB Insights 2021 State of Venture Report. That’s more than double 2020’s total of $294 billion.
In 2021, global fintech funding jumped to a new record of $131.5 billion across 4,969 deals. That compares to $49 billion across 3,491 deals in 2020. As you can see, the pace at which capital was invested into fintech startups in 2021 grew much more rapidly than total deal count, leading to larger rounds on average.
2. Buy Now Pay Later and Credit Reporting Bureaus
VC Firm Andreessen Horowitz shares their analysis of credit reporting for Buy Now, Pay Later (BNLP) providers, how that might effect thin file credit reports, and the expansion into the payments infrastructure:
If credit bureaus start furnishing BNPL performance data to their lender clients, it could help the credit invisible population bolster their credit profiles for much larger purchases. Equifax internal research (done in conjunction with FICO) found that on-time payments for BNPL could increase credit scores by 13-21 points. We suspect even more consumers will take out BNPL products in the coming years, as it becomes more seamless with checkout – Verifone just announced that BNPL will be a payment option on millions of its payment devices and online checkout systems across the country.
That’s a wrap for this week. Hope that ends your week well and here’s your official reminder to update your security questions. Please lets us know if this rang your bell at blog@mindspaninc.com and if you know someone who would appreciate it share below.