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Saturday 16 January 2021

North of Stupid Revisited (again)

N of SI am amazed at how many ‘old’ readers of SystemHOUSE are still reading HotViews 30 years on! Thankyou for all the kind words in your emails as a result of my North of Stupid article on Thursday.

My main conclusion to the question ‘Are tech stocks North of Stupid again?’ was that some (like Tesla and many of the recent tech IPOs) were but that established/Big Tech was fairly priced – although as tech was now ‘mainstream’ it too would be affected by a global or local recession.

Michael MacKenzie in The Long View in the FT today (See Tech stock boom has echoes of the dotcom bubble) comes to a similar conclusion but adds another interesting caveat.

MacKenzie argues that the likes of Amazon, Facebook, Microsoft and Alphabet are now seen as ‘quality investment plays’ – ‘valued for their fast-growing future cash flows’.  Ie ‘Tech stocks are more like long-dated bonds’.

Now that’s OK as long as interest rates remain low. But if inflation kicks in and/or interest rates rise, these ‘quality’ tech stocks could suffer. Indeed all the Big Tech stocks - Amazon (down 5%), Apple (down 5%), Facebook (down 8%), Microsoft (down 4%)  - have fallen in the first few weeks of 2021 just as US Treasury yields have risen above 1%.

An interesting and well-reasoned view.

Posted by: Richard Holway

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Friday 15 January 2021

Weezy squeezes backers to support supermarket dash service

logoI still think it’s madness but clearly investors don’t.

I’m talking about London-based ‘on-demand’ supermarket start-up, Weezy, which promises delivery within 15 minutes ‘at retail prices’.

Founded in 2019, Weezy raised seed funding last August (see Backers puff up Weezy for 15-minute grocery deliveries. Madness!) and have just announced a $20m Series A funding round led by New York-based VC fund Left Lane Capital. DN Capital and existing investors Heartcore Capital and Groupon founder Chris Muhr also participated.

Weezy currently operates in certain postcodes in Fulham, Chelsea, Clapham and Battersea, with goods delivered by cyclists. They plan to open two fulfilment centres across London and more UK sites by the end of the year.

How will this business ever, ever make money?

Posted by: Anthony Miller

Tags: funding   startup  

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Friday 15 January 2021

ScaleUp Group study shows Series A woes

logoAn interesting – if perhaps dispiriting – study conducted by our very good friends at corporate advisory network ScaleUp Group reveals an ‘abysmal’ success rate for UK scale-ups looking to raise Series A funding.

The study suggests that there’s barely a 1-2% chance of an entrepreneur finding a fund willing to support a Series A raise. ScaleUp Group recently supported a successful Series A raise for High Wycombe-based healthcare-focused, electronic document management platform developer, IMMJ Systems (see ScaleUp Group shows Foresight to raise growth funding for IMMJ Systems).

You can read more about the ScaleUp Group study on their website here.

Posted by: Anthony Miller

Tags: funding   startup  

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Friday 15 January 2021

*NEW RESEARCH* ECS acquisition by GlobalLogic oozes logic

In November, it was announced that London headquartered, ECS, had been acquired by US player, GlobalLogic.

We can see why GlobalLogic was attracted to ECS, which gives it a great entry point into the UK market. ECS has numerous FTSE 100 customers, in Financial Services and other highly regulated sectors. ECS has built a track record as an Amazon Web Services partner and is a certified Advanced Consulting Partner, Managed Services Partner, and one of only three EMEA Amazon Connect Service Delivery Partners. It is also one of a small number of UK-headquartered businesses to be awarded the DevOps competency partner status by AWS.

It is of course not the only AWS partner to have been scooped up by a larger player in recent times. For example, we've seen Cognizant acquire Contino (which was most latterly backed by Columbia Capital) and Inawisdom (the Ipswich-based artificial intelligence and data analytics consultancy).

As ever, the risk with acquisitions is that the people so critical to the success of the business jump ship in due course. Or, that the IP that is acquired is not leveraged in a way that means the acquirer fully capitalises upon it.

Given where ECS and GlobalLogic are in their own evolution, the transaction makes good sense. This research note, available for TechMarketView clients only, takes a look at some of the implications of the acquisition for both the companies and their customers.

Download the report here: ECS acquisition by GlobalLogic oozes logic.

Posted by: Kate Hanaghan

Tags: acquisition   cloud   automation   ML  

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Friday 15 January 2021

Acquisitive IRIS adds Senta to cloud portfolio

IRIS Software logoThe IRIS Software acquisition engine is still running, this time for the acquisition of Bristol-based Senta. The move will add to the accountancy side of the IRIS business because Senta provides cloud based practice management software for accountants and bookkeepers. Terms were not disclosed but cloud-first Senta was founded in 2014 and is reported to have raised c.£678k in financing. 

The plan is to integrate Senta into IRIS Elements. This is IRIS’ version of a unifying SaaS platform to bring cloud, mobile and on-premise applications together, and support automation and data integration. The overall goal is to help customers migrate to the cloud. SageAdvancedAccess Group are some of the many suppliers who have developed something similar. Where suppliers are avid acquirers such platforms are integral to managing and integrating portfolios of disparate applications. The key is populating them with a rich and relevant set of applications. It’s early days for IRIS; it looks like Senta will be the second application on the platform, joining its AML (anti money laundering) application. 

Given the rate of acquisitions at IRIS further activity to populate the platform would be no surprise. It’s not clear how Elements will align with the existing portfolio but we would expect some serious effort from IRIS to fire up its cloud power and make the most of its many products and acquisitions (see here). Just last week it acquired fast moving cloud based payroll provider Staffology. Founder Duane Jackson (who also founded successful Kashflow that IRIS also acquired) has joined IRIS, bringing valuable cloud experience and energy. We'll be watching developments with great interest.

Posted by: Angela Eager

Tags: acquisition   saas   software  

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Friday 15 January 2021

VMware’s loss, Intel’s gain as Gelsinger returns to fold

VMware’s loss, Intel’s gain as Gelsinger returns to foldPat Gelsinger’s return to Intel after a 12-year absence should help galvanise a company which has struggled to maintain its leadership position and value in recent years. His departure could be problematic for VMware however, with the company’s stock value dropping almost 8 percentage points on the news before recovering slightly.

The indications are that Dell-owned VMware will now begin a search for a new chief executive officer from outside its own ranks. Whoever takes over inherits a company with a strong proposition well attuned to the demands of service providers and large enterprises implementing and maintaining data centre, cloud, security and digital workspace systems. As with most suppliers there is the hurdle of ongoing coronavirus economic disruption to navigate first however (see 8% Q3 growth flatters flatlining VMware).VMware’s loss, Intel’s gain as Gelsinger returns to fold

The future is harder to predict at Intel with news reports suggesting activist hedge fund firm Third Point was instrumental in persuading incumbent CEO Bob Swann to step down after it acquired a US$1bn stake in the company. Swann’s two-year tenure has been plagued by inherited manufacturing problems which saw frequent delays and disruption to the delivery of flagship CPUs to Intel’s core desktop PC, server and laptop OEM partners, with the US-China trade war hampering supplies from its Asian fabrication plants.

More nimble rivals including AMD, Nvidia. Samsung and TSMC have aggressively stole market share and taken a lead on technical innovation. Indeed, Intel had lost its crown as the US’ most valuable semiconductor company last year when Nvidia’s US$251bn valuation pipped Intel’s by around US$3bn.

A broader management and strategy shake-up with Gelsinger at Intel's helm is now expected. Like VMware, Intel has made big bets on growth in demand for data centre systems in recent years (read our report Intel: In Place to Power Data Centre Transformation here) and aims to put its CPU, storage and networking architecture at the heart of the cloud computing industry. That looks like a sound policy to us, but it will be Intel’s ability to execute rather than plan which dictates its future success.

Posted by: Martin Courtney

Tags: datacentres   virtualisation   CEO   cloudserviceproviders   cpu  

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Friday 15 January 2021

Spectrum stake fuels Quantile's financial markets push

QuantileUK-based financial markets specialist, Quantile Technologies, has secured a £38m investment from Spectrum Equity. Founded 2015, Quantile provides risk management technology that supports derivatives trading. The company’s platform helps banks and hedge funds etc. to optimise risk, thus allowing for capital to be re-allocated to help improve returns.

Quantile has offices in London and New York where its customers include a variety of global and regional banks and other large investment institutions. The company plans to use the proceeds of the equity sale to accelerate its growth as it looks to expand its range of services and enter into new markets. As a result of Spectrum’s minority stake, one of the firm’s Managing Directors, Mike Farrell, is to join the Quantile board.

The technology-led changes that revolutionised the financial markets sector in the 1980's have parallels with the transformation taking place in the sector today. Regulation has been one of the key drivers as margin pressure has seen firms adopt new technologies and business approaches in pursuit of greater efficiency (see: Financial Markets Transformation “The Big Bang That Nobody Heard”).

Posted by: Jon C Davies

Tags: funding   financialmarkets   Quantile  

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Friday 15 January 2021


Are you a Fintech based in the UK or Ireland looking for global market access?

Then tune in to UKHotViews next Monday 18th January for the launch of a new TechMarketView Innovation Partner Programme and a chance to partner with a world-leading data technology provider to global financial services institutions.

Don’t miss out!

Posted by: HotViews Editor

Tags: FinTech   tipp  

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Friday 15 January 2021

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Posted by: HotViews Editor

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Thursday 14 January 2021

TechMarketView programme participants Mvine, iProov team up

logologoTwo former participants variously in TechMarketView’s Little British Battler, Great British Scaleup and Innovation Partner Programmes have hit the headlines with the announcement that their design for a simple, secure and widely recognized Covid-19 immunity and vaccination passport will now move into live testing.

Mvine  and iProov received backing from Innovate UK, which initially funded the development of a successful working prototype. The Mvine-iProov passport will now be tested by Directors of Public Health within the NHS. Mvine and iProov aim to complete two trials by 31 March 2021.

At the end of last year, Mvine was selected by UK financial services organisation, TISA, to help it to develop a test hub to manage the flow of digital identities between financial services and identity providers (see Mvine helps TISA drive digital identity initiative). Earlier in the year, facial verification technology from iProov was deployed to verify users signing up to NHS login from the NHS App (see NHS Login deploys facial verification tech from SME iProov).

It’s great to see two UK SMEs working together for the greater good.

Posted by: Anthony Miller

Tags: funding  

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Thursday 14 January 2021

Aston Uni spin-out Eyoto eyes funding to improve tele-optometry perception

logoLast year I wrote about a couple of UK start-ups that had (independently) developed portable retina scanners that hold the promise of improving the diagnosis of eye disease, especially important in less developed countries (see Scotland’s visionary start-up Epipole raises £1.5m and Angels sharpen visual acuity of Occuity’s eye scanner). Eyoto fits into this picture, figuratively speaking, with its tele-optometry platform which allows for remote eye diagnosis anywhere in the world.

Founded in 2013 as a spinout from Aston University’s School of Optometry (and formerly known as Aston Eyetech), Eyoto initially developed a range of products called eMap that conduct rapid and detailed surface inspections of glasses for retailers and manufacturers. The new Eyoto tele-optometry platform was due for launch in late 2020.

To back its development, Eyoto has raised £2.5m in funding from the Midlands Engine Investment Fund (MEIF), managed Midven, and other investors such as Mercia Asset Management, the Future Fund and a group of angel investors. Mercia had previously led a £5m Series A round for (then) Aston EyeTech back in November 2017.

As Eyoto’s website notes, despite ‘exponential’ growth in demand for tele-medicine and remote health technology, tele-optometry remains an emerging, but often overlooked, segment of the tele-medicine market. Eyoto aims to improve that perception!

Posted by: Anthony Miller

Tags: funding   startup   telehealth  

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Thursday 14 January 2021

OCF provides HPC facility to Plymouth Marine Laboratory

OCF logoHigh performance compute (HPC), storage, cloud, and AI integrator, OCF, has designed, integrated, and is now maintaining, a new HPC system for Plymouth Marine Laboratory (PML), the marine research organisation and registered charity. The HPC facility is part of the Natural Environment Research Council Observation Data Acquisition and Analysis Service (NEODAAS) and is being heralded as “the first centralised HPC service available to UK environmental researchers specifically for applying artificial intelligence and deep learning to Earth observation data.”

The HPC facility, named the Massive GPU Cluster for Earth Observation (MAGEO), is supporting scientists seeking to apply deep learning tools to their own data, or to deep learning experts looking to apply their techniques to Earth observation data. The use cases are diverse: wildfire, oil spill and plastics detection, mangrove mapping, and satellite and airborne data fusion. One interesting application has been its contribution to the COVID-19 sequencing effort, having donated computing power to distributed computing project, Folding@Home. A recent project to develop a new method for the estimation of chlorophyll concentrations in the upper ocean resulted in training the method in 10 days on a MAGEO, versus the 16 months it would have taken on a single GPU machine.

OCF has a low profile despite being established 20 years ago. The Sheffield-headquartered firm reported revenue of £17.5m in its last financial year to 31st March 2020, representing growth of 6%.  The company’s heritage is in higher education research. However, as HPC requirements transpire in other industries such as life sciences and engineering, OCF is benefiting. MD, Russell Slack, highlights the breadth of the company’s partners and technical capabilities as a strong differentiator. Its technology solutions are supported by design, support, consultancy and managed services.

Posted by: Georgina O'Toole

Tags: contract   space   research   HPC  

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Thursday 14 January 2021

North of Stupid

HotViews (and its predecessor HotNews) readers have long memories. This week I had several emails referring to my ‘NORTH of STUPID’ comment.

Back in Feb 2000 we were in the final days of the Dot.Com bubble. Sage was commonly referred to as THE UK’s Internet stock – even though only a small fraction of its SME users used the internet let alone used it for accounting. Sage share price had hit £10 which implied a P/E of 184. I was asked by the Financial Times for my views and they used my North of Stupid comment in the headline for the business section of that day.

Sage’s share price slumped thereafter to a low of 118p in 2002. It has NEVER hit £10 again and today opened at 554p implying a P/E of 19.

The question I was asked this week was whether we were once again in ‘North of Stupid’ territory.

The answer is rather more nuanced than in 2000. Back then ‘A rising tide had lifted all ships’ and the storm then sank them all. This time, that ‘irrational exuberance’ only affects certain stocks. Tesla is an obvious ‘North of Stupid’ candidate. Indeed I now hold no Tesla stock – although I’m sure the stock is still held by #ATT and, more significantly, #SMT. Outside tech, BitCoin seems an obvious candidate for the ‘North of Stupid’ label.

SHOther North of Stupid tech candidates are the many US IPOs in the last year – like Airbnb, Doordash, Snowflake etc. Indeed this madness continued yesterday when Affirm doubled its value to c$24b on its first day of trading on NASDAQ. Affirm had revenues of $510m and losses of $113m in its last FY.

This latest North of Stupid situation has even spurned its own get-rich-quick vehicle – the SPAC or Special Purpose Acquisition Company. A SPAC is a shell quoted company that raises funds then goes in search of acquisitions- news of which sends the shares soaring. Nikola – the hydrogen-powered truck company that was seen as a Tesla rival is, perhaps, the best example. Despite huge losses and NO revenues it managed to achieve a market value of $25b. Despite a disastrous run of bad news (like GM scrapping its partnership with them) Nikola is STILL valued at $6b.

Then we come to the other tech companies. I still contend that most Big Tech companies are reasonably fairly valued given their profits, revenue growth and cash generation. That is even more so in the UK which, bluntly, probably still undervalues its leaders like Computacenter. I have oft-said, however, that because tech is now so firmly engrained in the economy, a global or local recession is bound to affect tech too.

I do believe that the value of the ‘North of Stupid’ bubble stocks will indeed burst. But whether it will take down ALL TECH, as it did in 2000, is the real question.

Footnote – You might like to read my articles for Dec 1999 – Mar 2000 in the lead up to the Dot.Com Bubble burst.

Either read them all at Archives of IT - System House Archive or a precis from HotViews of 2009.

Posted by: Richard Holway

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Thursday 14 January 2021

Sensyne launches AI app for lateral flow tests

Sensyne Health logoOxford-based clinical AI company, Sensyne Health, has announced the launch of a smartphone app to help automate the reading and analysis of lateral flow tests, such as those used to test for COVID-19.

Its MagnifEye software uses deep learning AI to automate the reading of test results, helping enhance accuracy by avoiding human error and reading results beyond the human visible spectrum. It also facilitates the use of advanced analytics to interrogate data across large populations, helping to enhance epidemiological insights.

Lateral flow tests were in the news again this week after the BMJ published an article calling for an urgent rethink in the UK Government's COVID-19 lateral flow test roll out. It highlighted recent analysis that revealed 60% of infected symptomless people in the pilot study conducted in Liverpool went undetected, including 33% of those with high viral loads. Earlier studies have demonstrated that the tests are ineffective at identifying those at very early or very late stages of infection. The tests are most effective when used to screen people at very regular frequency and in detecting cases with high viral load.  

The application of AI could help to improve the accuracy of reading test results and should enhance disease surveillance across large populations.

MagnifEye, which utilises Microsoft Azure, draws on the work Sensyne has been conducting on the application of AI to the analysis of medical images (see Sensyne makes progress despite the challenges and work back). It was developed in response to demand from commercial test manufacturers and healthcare providers and has potential across a wide range of applications in human and animal health, not just for COVID-19.

Posted by: Dale Peters

Tags: analytics   lifesciences   AI   machinelearning   healthcare   covid-19  

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Thursday 14 January 2021

Wipro picks up the pace in Europe

LogoWipro has delivered a second successive quarter of sequential top line growth as the company continues to recover from the impacts of the pandemic. Revenue in Q321 (the three months to 31st December) was $2.07b, up 3.4% qoq on a constant currency basis. This, however, represented a 2% decline in turnover compared with the same period in the prior year. Operating margin improved for the third quarter in a row hitting 21.7% and adding a further 250 bps to the Q221 level.

All of the offshore major’s target industry verticals have now returned to qoq expansion. The company’s Health and Technology business units, which together accounted for over 26% of Wipro’s global turnover last quarter, were also back in positive yoy growth territory in Q3.

From a regional perspective it was Wipro Europe that delivered the strongest performance. Sales in this region increased by a hefty 8.6% qoq on a constant current basis to $522m, up 1.4% yoy. The company also closed its largest ever deal win in Continental Europe during Q321.

Looking ahead, Wipro expects that Q421 revenues will fall somewhere between $2.1b and $2.14b. Hitting the top end of this range would result in a small full year yoy top line increase. This would be a very respectable performance within the context of the events of the last twelve months. It would, however, also be some distance off the pace of IPP Tier 1 peer group rival Infosys which expects to achieve growth of at least 4.5% over the same period (see here).

Posted by: Duncan Aitchison

Tags: results   offshore   systemsintegration   IPP  

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Thursday 14 January 2021

Blue Prism puts on 46% in 2020

Blue PrismPreliminary results for the year ended 31st October out this morning from Robotic Process Automation (RPA) provider Blue Prism, have the Group growing 46% in booking revenue of £141.4m (FY 19 £96.8m), 98% of which is accounted for by recurring licences (96% FY 19). EBITDA losses improved to -£40.3m from -£76.1m in FY 2019.

Highlights for the year, included growth of 21% in customer numbers to 2,031 with over 250,000 registered users of their software, an increase of 97% on the prior year. Given the amount invested in the Thoughtonomy acquisition the Group will also be pleased with a 147% increase in Blue Prism Cloud bookings. 

Upselling and scaling implementations is a key part of the Blue Prism strategy and whilst numbers of upsells grew (647 customers Vs FY19 536) the average value of an upsell deal fell as customers responded to COVID uncertainty by delaying or reducing spend. As a result, net retention for the year was lower at 113% (FY 19 143%). On the plus side cash flow improved significantly particularly in the second half aided in part by COVID related savings.

Blue Prism’s differentiator as a really robust enterprise-wide platform centrally managed and deployed across organisations remains key, in what is becoming a crowded and confusing automation landscape. Initiatives like the Blue Prism Digital Exchange remain central to developing a winning ecosystem of intelligent automation technologies that will make digital workers and human colleagues working side by side a genuine business norm.

Longer term, Blue Prism should be a significant net beneficiary of the recent acceleration to digital with automation being an increasingly important lever for how organisations reengineer their operations post COVID. Keeping up with/ahead of the competition will, however, require significant further investment hence the announcement in November to exploring a potential secondary listing in the United States.

Posted by: Marc Hardwick

Tags: results   automation   RPA  

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Thursday 14 January 2021

GBG disposal reinforces core focus

GBGUK-based, GB Group (GBG), has sold its Marketing Services division to HH Global as its looks to increase its strategic focus on its core data intelligence proposition.

Headquartered in Chester, GBG provides a variety of offerings designed to help organisations to quickly and effectively, verify the validity of client transactions. GBG has been “right-sizing” its portfolio of late and in December acquired fraud prevention specialist, HooYu, in a deal worth around £4m (see: GBG acquires anti-fraud platform).

GBG’s marketing services arm accounted for just 2% of GBG’s revenues in FY20. Going forward the company aims to concentrate its efforts around location intelligence, ID verification and fraud prevention. This is an area of technology that has received a significant boost due to the pandemic as the move to online commerce has accelerated during lockdown. As a result, tools to expedite transactions securely and prevent against fraud have seen an understandable surge in demand.

Posted by: Jon C Davies

Tags: M&A   GBG  

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Thursday 14 January 2021

Infosys raises full year guidance again

LogoInfosys continues to impress with yet another strong quarterly performance. Revenue for Q321 (the three months ending 31st December) rose to $3.52b, up 5.3% sequentially and 6.6% yoy on a constant currency basis. Operating margin was unchanged qoq at 25.4%, a 350 bps improvement over the same period in the previous year.

Sales of digital services, which surpassed 50% of the company’s total quarterly turnover for the first time in Q321, continued to gather momentum increasing by 12.3% qoq and a hefty 31.3% yoy. Large deal Total Contract Value was also at an all-time high for Infosys this last quarter both coming in at $7.13b and accounting for 73% of net new business.

From and industry vertical perspective only the Manufacturing sector failed to return to yoy growth. Hi-Tech was once again the star of the Q3 show with revenues up over 17%. Financial Services and Life Sciences also had strong quarters seeing sales increase by 12% and 11% respectively.

All of the company’s geographic regions delivered yoy improvements in Q321 turnover. North American revenues, which account over for three fifths of Infosys global activities, surged ahead increasing by 8.8% yoy.  European demand, however, again proved to be least resilient to the continuing impacts of the pandemic. Sales in this territory were up by just 1.3% over the same period in the prior year.

Infosys now expects that FY21 revenue growth will be in the range of 4.5%-5% in constant currency, up from the 2%-3% view provided in October (see here). An increase in turnover of this order would be pretty good in a normal year. If delivered against the backdrop of the COVID-19 pandemic, the company’s projected yoy top line improvement will represent a noteworthy achievement.

Posted by: Duncan Aitchison

Tags: results   offshore   systemsintegration   IPP  

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Thursday 14 January 2021

Rapyd rides the surging online payments wave

RapydUK-based fintech, Rapyd, has raised an additional $300m, as the impact of the coronavirus has accelerated the growth of online commerce. The latest funding round was led by Coatue and attracted a number of new investors, as well as additional contributions from Rapyd’s existing supporters.

Rapyd provides a variety of online and mobile payment services that are designed to help businesses capitalise on ecommerce opportunities overseas, by tapping into local payment processing. The fintech facilitates payments and disbursements in multiple territories and enables multicurrency settlement, real-time foreign exchange, ID verification, as well as AML and counter terrorism services.

Founded in 2016, Rapyd is now valued at around $2.5bn (see: Payments Innovation – New Kids on the Block). The company plans to use its latest cash injection to help it expand its range of financial services offerings and further grow its international network.

The various lockdown restrictions in light of the pandemic are fuelling a global surge in online payments and Rapyd is one of the many beneficiaries of this trend. Just as in other sectors, in all likelihood, behaviours will be significantly changed on a permanent basis, even once restrictions are lifted. The current boom in ecommerce being enjoyed by the likes of Rapyd is therefore unlikely to be a passing trend.

Posted by: Jon C Davies

Tags: funding   payments   Rapyd  

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