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This week: Alpha, Argentex, Chime, FairFX, Greenhouse, Marcus, Monzo, N26, OFX, SoFi, Varo, WorldRemit 
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New data, new insights on cross-border payments. Every week.
 

Cross-border payments IPOs - hot or not?

This week, we declare that IPO season for cross-border payments is in full swing. Corporate and institutional player Argentex LLP listed on London's AIM stock market on Tuesday. This follows Finablr's listing last month.

Neobank Monzo raised another £113m as it sets its sights on the US market, and brings with its own white-label cross-border offering.

We also take a look at FX pricing for small businesses with new entrants such as WorldRemit taking on both payment companies and the banks.

To the markets...

We were surprised by the lack of outliers across these valuation ranges which provide some pretty clear guidelines for the sector:

The value of growth
As our analysis continues to show that growth is highly valued. If you can show growth and continue to grow, a strong valuation will follow. 

For corporate focused players:
In the highly fragmented corporate segment the likes of Alpha and Argentex, albeit from smaller starting points, highlight the growth and value that can be attainted with their singular focus. 

For the consumer market: 
Greater consolidation and underlying single digit growth in the global remittance market makes for a challenging background to find double-digit growth. The high-growth players are valued accordingly.  

Expect to see more companies added to this map over the next year as more players look to the public markets, either to raise funds or to exit.

Track the crypto players in the cross-border sector

Monzo enters the US market - but first raises another $144m to help

In 2010, 157 banks failed in the US. In 2018, for the first time since the 2008 crash, no banks in the US failed. With a now stabilised but still highly fragmented market, Monzo, the UK-based digital bank is finally crossing the pond bringing with it TransferWise's white labelled cross-border product. 

The US banking market is not for the faint-hearted. Competitors find themselves up against thousands of local banks and credit unions in addition to the big household names (Chase, Wells, Bank of American and Citi). 

Competition comes from all angles. Big banks have launched standalone digital banking products but with mixed success. Finn, backed by JP Morgan, a bank valued at $350bn recently closed up. Simple, backed by BBVA has struggled to gain customers. 

Marcus, on the flip side, has been one of the successes. It has so far brought in about $48 billion in deposits and made $5 billion in loans so far and recently entered the UK market. Wells Fargo and SoFi, two US financial giants have just launched products but the jury is still out.

Financial product virility does not drive success in the US as easily as it does in the geographically denser European markets. However good the Monzo product it, and an NPS rating of 80 backs this up, will a few hundred million dollars for an unknown brand be enough to win over the US market?

And how much will it use its cross-border offering to win over new customers since many of the players above have no international payments product?
Which neobanks make the Top 100 Cross-Border list?

Competition in SME payments

WorldRemit just launched its business product following fellow remittance player Azimo's launch late last year. Competition is fierce but these players hope to win some of the small company transfers into the developing world, a cross-over from their existing base and leveraging their existing platforms.

As to pricing...

We continue to see examples of premium pricing at banks but not all payment companies have raced to the bottom, even in some of the increasingly competitive developed to developing world business payment corridors. 

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On our radar this week:
Curated by FXC Intelligence's Team 
JP Morgan Coin to start testing

With no lack of crypto noise right now, the bank says testing will start in 2019
Coin Telegraph
TransferWise's borderless goal

Having hit $10bn in deposits,  its multi-currency offering launches Stateside
Fintech Finance
India's neobank push

Open raises $30m Series B to take on the giant Indian market
Finextra
boon Planet anyone?

Yes, that's the name of Wirecard's new full service banking product
Yahoo Finance
New data, new insights on cross-border payments. Every week.
 

Missed the last few weeks?

What Facebook's Libra means for the cross-border sector? (here)
The costs of acquiring customers for cross-border fintechs and neobanks (here)
Has WorldRemit succeeded following its $175m raise? (here)
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Have a lovely week 

Daniel
Copyright © 2019 FXC Intelligence Ltd, All rights reserved.

New York | London

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