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This Week in London Startups - Issue #21, 21st September 2021

This Week in London Startups - Issue #21, 21st September 2021
By London Startup Club • Issue #21 • View online

Monzo unveils buy now, pay later product with £3,000 limit
Monzo unveils buy now, pay later product with £3,000 limit
In previous newsletters, I’ve talked about how BNPL (buy now, pay later) seems to be all the rage whether it’s the acquisition of AfterPay by Stripe or Checkout.com’s investment in Tamara.
The race is continuing and only heating up, with Monzo announcing its own BNPL product.
BNPL skyrocketed in 2020, reaching £2.7 billion in transactions in the UK.
So what makes Monzo Flex different? Whilst most major players like Klarna require agreements with Merchants (where they make their money), Monzo won’t as it’s offering this service directly to consumers - meaning within reason anywhere you can use your Monzo you can use Monzo Flex.
Although the end user may not see much difference in using Monzo Flex or Klarna, the reality is the business models differ greatly leading many to question why neo banks like Monzo are foraying into this space.
Solutions like Klarna and Afterpay aren’t a traditional credit product and don’t charge interest when you pay on time. Their revenues come from merchant service fees, customer late fees neither of which are interest baring. As they may money from merchants on every transaction - they’re interested in the velocity of money going through and is the reason they don’t do a traditional credit check as this will only slow down their process.
On the other hand, Monzo will require users to create a bank account and pass affordability - and even then will only make money on interest (loans greater than 3 months). Whilst they will see some increase in revenue, it’s not going change the world.
If it’s not about revenue, we can only think it’s a great acquisition tool and opportunity to get ahead of other neo banks and differentiate themselves. A great read from Sifted explains more here
Haris Qureshi, Editor & Co-Founder @ London Startup Club
Spotlight
This week we have community member Saba Karim, Director of Startup Pipeline at Techstars.
Idea Validator is a tool Saba and his best friend came up with one weekend when they realised that there are a lot of tools to build stuff - but not many to validate them. Especially not all-in-one tools that let you brainstorm, capture the fundamentals and have a place to store all your early customer conversations. Because you know, asking your mum or bestie isn’t really the validation that will get you funding… or is it?!
Got something worth shining a spotlight on? Message me on LinkedIn, and we’ll get you scheduled in for an upcoming newsletter!
Top News
  • QED Investors, a VC focused on fintechs closes $1.05B in oversubscribed Fund VII, more here
  • Open banking hype escalates, as TrueLayer bags a $1bn valuation from Tiger Global, more here
  • Consumer-focused VC firm Heartcore raises $250m in new funds, more here
  • Taking part in Y Combinator from Europe: is it worth it?, more here
  • Pay for European startup employees jumps nearly 60% amid war for talent, more here
  • iOS 15 adds all the little features that were missing, more here
  • Following SEC lawsuit threat, Coinbase cancels launch of ‘Lend’ product, more here
UK Funding Rounds
  • Flexible loans for UK businesses made simple: London fintech MarketFinance nets £280M funding, more here
  • London-based Embargo raises $1.1M for its digital loyalty cards, more here
  • Patch launches ‘Work Near Home’ concept, raises $1.1M funding, more here
  • UK fintech Dopay picks £13.1M to make payments electronically, more here
  • UK’s reusable nappy startup Bambino Mio pockets £13M funding, more here
  • Unleash live raises $8M in Series A to scale AI apps for enterprise analytics, more here
  • UK cloud tech platform Civo secures £1.4M from Softbank-backed THG Ingenuity, more here
  • London-based Martin’s Properties invests £3M in Love Ventures, more here
  • London cloud-based payment fintech Form3 gets $160M funding, plans US foray, more here
  • Conference hardware partner Neat secures £22M funding from Zoom, eyes to open office in London, more here
  • AhoyConnect that builds HubSpot for community managers bags $3M funding, more here
  • Index Ventures invests $12.2M in Sourceful, a sourcing and supply chain platform from Manchester, more here
  • Digital trade platform for SMBs, MODIFI secures $24M funding, reaches $120M valuation, more here
  • UK healthtech accuRx that helped arrange 21 million COVID-19 vaccines just raised £27.5M, more here
  • London-based medtech Doccla grabs £2.4M funding for at-home virtual wards to support NHS, more here
  • Lightyear, a new stock trading app from early Wise employees secures £6.1M to launch in the UK, more here
International Highlights
  • French construction tech platform Saqara raises £7.6M to expand in UK, more here
  • All-in-one e-commerce shipping platform Sendcloud plots UK expansion with £128M funding, more here
  • Sorare valued at $4.3bn after monster Series B led by Softbank, more here
Events
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