Hi Fintech Architects --
The weekly key updates (with graphs and analysis) on Fintech bundles, Crypto and Blockchain, Artificial Intelligence, and Augmented and Virtual Reality, are below.
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These opinions are personal (or maybe made by a robot) and do not reflect any views of ConsenSys or other parties.
A report from S&P Global Market Intelligence shows that US Fintechs raised $14.9 billion in 2019 (link here)
2019 was another big year for Fintech, with $15 billion going to US companies. Insurtech was one of the morea active categories, raising $3.8 billion, including Bright Health Management at $635 million, Clover at $500 million, Root at $360 million, and Lemonade at a paltry $300 million. Other investments were largely directed towards digital banks and digital lending, from SoFi to Fundbox to Affirm. All in, larger companies are raising more money in larger rounds.
Online lending projected to reach $9.6 billion in transaction volume in 2020 (link here) and two digital lending companies, Lendio and SMEcorner, have just raised $55 million and $30 million respectively (link for Lendio here and link for SMEcorner here)
People like credit — $10 billion of it per year in Europe, growing at a 10% per year. Somewhat surprisingly, much of this volume is from P2P, which I thought was largely replaced with alternative institutional financing. Two recent venture fundings are of note as a result. Lendio, a marketplace for small business loans, has raised $55 million in a mixture of debt and equity. It is one of the largest SME financing marketplaces in the US. SMEcorner, an online lender for small and medium-sized enterprises, has also raised $30 million. Given the state of the world, we’ll need that credit!
Remember when you worked in Finance and whenever a new fintech got a funding round, you said — “let’s wait and see if they can weather a downturn?”. Or maybe you said something about credit cycles and lending. Well, the downturn is here, and Robinhood is struggling to keep its platform up during periods of intense crunch. This means that users are unable to trade. Perhaps that is a benefit, but is highly disempowering for people expecting on-demand mobile exchange, and Twitter is on fire.
Hyperledger have announced 14 new members and service providers, including Walmart, at Global Forum 2020 (link here)
Walmart joins the open-source blockchain network Hyperledger, which includes both IBM’s Fabric and Ethereum clients, among other technologies. There are a number of global trade and supply chain enterprise blockchain consortia in production, and this is likely evidence of further industry adoption.
The Bank of Japan have halted their plans for a digital currency amid concerns surrounding the risks of issuing a central bank currency (link here) and South Korea passes one of the world’s first comprehensive cryptocurrency laws (link here) and India’s Central Bank Plans to Fight Supreme Court Crypto Ruling (link here)
There is a lot of whiplash globally about the state of crypto assets. Japan was very interested in exploring a digital yen — even moving towards establishing a joint public-private venture. Now officials are backing away with notes of caution. India’s Central Bank hindered the crypto industry by making it harder for firms to use the country’s banking system, but the Supreme Court ruled against them, and the Central Bank is now trying to reverse the decision. South Korea is experiencing similar regulatory volatility, which seems to now have arrived to a moment of clarity. I understand why people are squirreling in Malta now.
Introducing PieDAO, the asset allocation DAO. (link here)
This is really fun project, which builds out asset allocations through community governance, and implements them using the UMA protocol (synthetic exposure if I understand correctly). The three portfolios featured above reach traditional markets, crypto asset markets, and cash equivalents, and are managed by a decentralization autonomous organization. Just click the link already.
Whilst artificial intelligence can bring a range of benefits to banks, it appears that many financial institutions are not using the data how they should (link here)
If you think AI is just innovation bingo, and that banks are pretending to use it while actually doing very little — this link might be for you. Instead of large changes in customer acquisition or the launch of new services, the focus is mostly on improving current operations. Respondents say that most use cases of AI for better customer experience have been superficial at most, indicating a need for a more existential approach to implementation.
Alphabet’s Waymo has raised $2.25 billion to scale up their autonomous vehicle operations (link here)
Alphabet’s autonomous vehicle division, Waymo, just received $2.25 billion in funding. The company doubled their headcount over the past year to 1,500, despite burning $1 billion per year on a revenue of a few hundred thousand. These funds will likely be used for expansion throughout the US and beyond the current base in Phoenix. Yet mass commercialization is far away (in either the trucking or taxi categories), with competitors like pony.ai and Aurore each raking in hundreds of millions in investments.
Independent study finds IBM Watson Assistant customers can accrue $23.9 million in benefits (link here) and UK-based Fintech Finastra to Allow Customers to Use Conversational AI-based Retail Banking App (link here) and Visa partners with Clinc to offer clients conversational AI (link here)
This is unusual — multiple chatbot and conversational AI updates in a week! Forrester analysed the benefits of deploying IBM Watson Assistant, surveying four long-term clients of chat support across 4 key benefits — (1) cost savings of $5.50 per contained conversation, (2) consolidation of internal help desk agents, (3) reduction of handling time by 10% through chatbot-augmented agents, and (4) correctly routed conversations saved $7.75 per call. Finastra adding a chatbot into its banking platform and Clinc partnering with Visa suggests that this technology is becoming a commonplace feature.
Talespin Raises $15 Million For AR/VR Enterprise Training (link here).
Love this! An insurance company is using a virtual reality training simulator for agents to have difficult conversations. I am just going to assume it’s about paying out fewer claims in home damage cases. Nothing quite like denying a rendered NPC funding to repair their rendered home.
The medical IoT market is to reach $158bn – driving demand for data analytics solutions (link here)
Business Insider forecasts the Internet of Medical Things market to reach $160 billion by 2022. This growth comes from the proliferation of wellness devices, as well as the benefits of using data to provide health indicators, enabling doctors to preemptively identify healthcare issues. The data overload will require a lot of data analytics, and all sorts of machine learning software.
Here's Your First Look at the US Army's Combat-Ready HoloLens 2 in Action (link here)
A $500 million contract went to Hololens at Microsoft to build a tactical augmented reality head display for the Army. This is the current result of the contract in action. A couple of magnificent things about the photo: (1) very fit people wearing very silly headgear, and (2) the original Nintendo controllers being used as navigation. I am sure the Hololens is serious business, but am also excited about this future where everyone is just gaming in Excel projected into their irises.