FinTech Futures: Top five stories of the week – 12 August 2022
Here’s our pick of five of the top news stories from the world of finance and tech this week.
Neobank Nuri files for insolvency due to “challenging” market conditions
German neobank Nuri has filed for insolvency due to “significant macroeconomic headwinds and the cooling down of public and private capital markets” putting a strain on the firm’s liquidity.
Citing the effect of “challenging market developments” on Nuri’s business, the bank says filing for insolvency was “necessary to ensure the safest path forward for all our customers”.
The Berlin-based neobank said in a statement on its website that the action does not affect its services, customer funds or investments. The firm adds: “All funds in your Nuri accounts are safe due to our partnership with Solarisbank AG.”
“You have guaranteed access and will be able to deposit and withdraw all funds freely at any time.”
Tax automation fintech Avalara snapped up by Vista for $8.4bn
Tax automation fintech Avalara is to be acquired by global investment firm Vista Equity Partners in an all-cash deal worth $8.4 billion.
Vista will acquire all outstanding shares of Avalara for $93.50 per share, representing a premium of 27% over the company’s closing share price as of 6 July 2022. The transaction value is inclusive of Avalara’s net debt.
Avalara CEO Scott McFarlane says the firm will benefit from Vista’s “expertise in enterprise software as we build and improve upon our cloud compliance platform”.
New Fintech Growth Fund set to plug £2bn UK fintech funding gap
A new fintech-focused growth fund, designed to plug a £2 billion funding gap in the UK’s fintech sector highlighted in the Kalifa Report, is currently in the works with former chancellor Philip Hammond reportedly set to serve on its advisory board.
The provisionally-named Fintech Growth Fund, Sky News reports, will be independent from government, raising capital from institutional investors to pump money into UK fintechs beyond the Series B stage and looking to scale. An official announcement could be made as soon as the autumn.
The Fintech Growth Fund was one of many proposals suggested by Ron Kalifa in his wide-ranging report into the UK fintech industry released in February 2021.
The former Worldpay chairman recommended the £1 billion fund in an effort to tackle “a £2 billion fintech growth capital funding gap” which is resulting in many entrepreneurs selling up rather than continuing to build their companies.
Reserve Bank of Australia to explore CBDC use cases with DFCRC
The Reserve Bank of Australia (RBA) is working with the Digital Finance Cooperative Research Centre (DFCRC) to explore use cases for a central bank digital currency (CBDC) in the country.
The DFCRC is a digital asset research programme funded by the financial services industry, including the RBA, universities and the Australian government and treasury.
RBA deputy governor Michele Bullock says the project is an opportunity to engage with “a wide range of industry participants” to better understand the potential benefits a CBDC could bring to Australia.
UK challenger Dozens set to close by end of the month
London-based challenger Dozens, which launched in early 2019, has decided to shut up shop and will wind up operations by the end of the month.
Customers were notified of the decision to close in June and asked to transfer their money to an alternative account.
Dozens claims to have some 60,000 customers using its app and has raised £28 million from institutional sponsors, as well as £1 million each from Seedrs and HMT’s Future Fund.
In a statement, Dozens cited various reasons behind the decision, including the “domino effect” of Covid which has led to “less money in the system” and less funding going to the consumer side of fintech.