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he collapse of Wirecard has put regulatory authorities and the investment community on alert, especially those linked to the fintech ecosystem, one of the most emerging technological fields that concentrates a good part of operations, both in terms of buying and selling and new financing rounds.
However, expert investors like Carlos Blanco assure that the Wirecard scandal is not extensible to the entire fintech community and that we are facing a case of corporate crime and accounting fraud, although he fears that this scam could be used to try to stop a very dynamic sector that threatens a good part of the traditional banking business, which is why there are many vested interests.
In Spain alone, it is estimated that there are about 400 start-ups that provide new financial services thanks to an intensive use of technology and their ability to develop solutions that add value to the customer and cover new needs. The fintech sector has already created more than 5,000 jobs in our country, although it is true that the United Kingdom and Germany concentrate 70% of the investment in this emerging sector, which totaled 8.3 billion euros in 2019. Spain is in fifth position, with an investment of 245 million.
Barcelona, thanks to its powerful entrepreneurial community, is at the forefront of Spanish fintech and has just scored two major successes that give confidence to the ecosystem and will undoubtedly give it a new boost. These are the recent sales of Verse and Strands, two firms headquartered in the Catalan capital led by Bernardo Hernández and Erik Brieva, respectively.
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Both operations have been signed during the pandemic, which shows that the sector is still boiling, waiting to see how the Wirecard crisis will end up affecting it. With one million users, Verse is a mobile payment application between individuals that this June has been acquired by Square, a US fintech owned by the founder and CEO of Twitter, Jack Dorsey. The transaction exceeds 30 million euros and will allow Square to grow in the European market for transfers between individuals. Verse was born in Barcelona in 2015 and until now had managed to raise about 37 million euros thanks to a payment system valid for all of Europe, unlike Bizum, which operates only in Spain.
A few months earlier, in March, the Italian credit information company Crif bought Strands, a fintech specialized in advanced digital banking solutions with headquarters in Barcelona.
ID Finance is another of the most important fintechs in Barcelona. The firm, led by two Russian-born entrepreneurs, Boris Batine and Alexander Dunaev, specializes in online loans and grows by doubling its business every year. Thus, in 2019 it invoiced 81 million euros, compared to 41 million in the previous year. Although its main headquarters are in the Catalan capital, ID Finance also has offices in Minsk (Belarus), Mexico and Brazil.
In the Catalan fintech ecosystem, Kantox was, without a doubt, a pioneer. It is a currency exchange and management company based in London and regulated by the British FCA, but it maintains its main office on the 22nd floor of Barcelona's brand new Torre Mapfre. With more than 4,000 business clients in 70 countries, Kantox was founded in 2011 by Phillipe Gelis and Toni Ramis and since then has exchanged more than 10,000 million dollars through its platform.
THE MOST EMERGING
The dynamism of the sector in Barcelona also has Goin as a major protagonist, considered the fastest growing fintech in Europe. Its founding team, Gabriel Esteban, David Ruidor and Carlos Rodríguez, has been recognized by Forbes and is part of Europe's select list of young entrepreneurs 30 under 30. Born in March 2018, Goin (short for gain with each coin) is an application that helps millennials save easily and invest without much financial knowledge.
NoviCap is another fintech founded in London by Catalan entrepreneurs and with headquarters in Barcelona. The firm led by Marc Antoni Macià ranks 75th in the ranking of fastest growing European companies compiled by Financial Times. It specializes in working capital financing for SMEs through invoice factoring and confirming. In 2019, it exceeded the barrier of 210 million euros financed, triple that of the previous year, with 35,000 invoices financed in 35 countries. The company has just announced the opening of new offices in Barcelona that will triple the current space and allow it to cope with growth, and it will also establish itself in Amsterdam.
Another Barcelona fintech with growth potential is the robo-advisor inbestMe, now immersed in its second round of financing and participated by the GVC Gaesco group, chaired by the veteran Maria Àngels Vallvé. In one year, the automated investment firm has doubled its volume of clients and managed assets, and now its most immediate goal is to triple it.
NEOBANKS BET ON BARCELONA
The Catalan capital and its technological potential and talent attraction have also awakened the interest of the two largest European neobanks, the British Revolut and the German N26. Both have opted to open their offices in Barcelona for Spain, a market where they already have 600,000 and 400,000 clients, respectively.
But Barcelona has also given birth to its own neobank, Bnc10, a fintech that has more than 35,000 clients and began operating in September 2019. Founded by Manel Vallet (from Hoteles Catalonia), David Montanyà and William McCahey and directed by Albert Llorens (ex CaixaBank), Bnc10 wants to be a digital alternative to traditional banking and this year it aims to reach 100,000 users. They have been financed with seed capital and a bridge round and are now preparing their first Series A round.
THE INITIATIVE OF TRADITIONAL BANKING
CaixaBank and Banco Sabadell, the two large banks with operational headquarters in Barcelona, also promote the fintech sector. The former has just relaunched Imagin, its mobile bank for young people, with the challenge of reaching 4 million users by 2024 and increasing the profitability of the young segment in the financial group by 70%.
For its part, Banco Sabadell opted to create its own financial innovation platform with the creation of Innocells, a launcher that has created fintechs like Nomo and has acquired others like Instant Credit. Nomo is a mobile application that facilitates work for self-employed workers and freelance professionals, as it allows them to calculate VAT and scan invoices and tickets. The bank's start up, directed by Xavier Capellades, already has more than 60,000 users.
Unnax, Coverfy and Flanks are other growing Catalan fintechs that can bring new joys to help consolidate the sector in the coming years.