FinTech Futures: Top five stories of the week – 3 February 2023
Here’s our pick of five of the top news stories from the world of finance and tech this week.
PayPal to lay off 2,000 staff over the next few weeks
PayPal to cut 2,000 jobs
US payments giant PayPal is set to lay off approximately 2,000 employees, or about 7% of its total staff headcount, over the next few weeks.
In a message to employees, PayPal president and CEO Dan Schulman cites the “challenging macro-economic environment” as a reason behind the job cuts as the company looks to adapt to shifting market conditions.
“While we have made substantial progress in right-sizing our cost structure, and focused our resources on our core strategic priorities, we have more work to do,” writes Schulman.
Departing employees will be supported with a “generous” severance package and consultation where needed, he says.
UK’s Tech Nation to close, sell assets after losing government grant funding
Tech Nation, a growth platform for UK tech start-ups, has announced it will be ceasing operations on 31 March 2023 and will look to sell its assets after the termination of its core government grant funding.
Since its inception in 2014, Tech Nation has been backed by the government for a decade to serve the UK’s scale-up tech ecosystem. Its core grant funding from the Department for Digital, Culture, Media and Sport (DCMS) is now being awarded to Barclays Bank.
“With this foundation removed, Tech Nation’s remaining activities are not viable on a standalone basis,” it says.
“As a direct result of the DCMS grant withdrawal, Tech Nation will be ceasing all existing operations through a carefully planned wind-down and has commenced a redundancy consultation process.”
Marqeta makes first M&A foray with $275m Power Finance deal
Marqeta acquires Power Finance
Global card issuing platform Marqeta has acquired Power Finance, a credit card management platform, in a $275 million all-cash deal that looks to strengthen Marqeta’s credit and card issuing capabilities.
The acquisition, Marqeta’s first, is expected to close in Q1 2023 and will comprise of $223 million in cash, around a third of which is payable over a two-year period.
An additional $52 million in cash is subject to a milestone expected to be achieved within the next 12 months.
Marqeta CEO Simon Khalaf says there is “considerable demand” from companies looking to innovate in the credit space, but which are held back by legacy technology.
Looking at potential acquisitions, “it became clear to us that Power would strengthen Marqeta’s platform with a best-in-class tech stack for credit card programme management”, Khalaf adds.
UK government to strengthen rules around crypto
The UK government is to set out plans to regulate cryptoasset activities as it looks to provide clarity for both consumers and businesses and leverage the opportunities presented by crypto.
Given the recent volatility and “structural vulnerability” within the cryptosphere, the government will strengthen rules for crypto trading platforms and crypto lending in line with traditional finance.
Economic secretary to the Treasury Andrew Griffith says that while the government is committed to growing the economy through leveraging new technologies such as crypto, “we must also protect consumers – ensuring robust, transparent and fair standards”.
The “ambitious plans” will ensure the UK benefits from this nascent industry while shoring up protections for consumers and firms against the potential “significant” risks, the government says.
Egyptian fintech MNT-Halan lands $400m investment
Egyptian fintech platform MNT-Halan has landed $400 million worth of investment, which it claims is the largest amount of funding across Egypt and the Middle East over the past 12 months.
MNT-Halan lands $400m investment
MNT-Halan received a $200 million investment from Chimera Abu Dhabi in exchange for over 20% of the company and the firm is also in “advanced” talks with international investors to raise a further $60 million of primary capital.
Once these investments have been completed, MNT-Halan will be worth more than $1 billion, the firm says.
The company also announced two securitisations totalling $140 million through subsidiaries Tasaheel and Halan with Commercial International Bank (CIB), Egypt’s largest private sector bank.
This latest injection of capital comes after a $120 million investment in September 2021 by investors including Development Partners International (DPI), Apis Growth Fund II and Lorax Capital Partners.
