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Greek financial start-up “Viva Wallet”, one of the so-called “neo-banks” making inroads into small businesses, has raised a total of $ 80 million in funding to expand its footprint as well as services that she proposes.
These small financial institutions continue to make waves in financial markets around the world, thanks to their agility, which allows them to enable their customers to bank online and use a range of new technologies more easily.
These small businesses also allow for greater personalization of the relationship between the bank and the customers it serves.
Viva Wallet, aimed at small and medium-sized traders, will now be able to expand its portfolio of Merchant Advance loans.
Viva Wallet soon to be present in 26 European countries
It already operates in 23 European countries and has expansion plans for Croatia, Hungary and Sweden.
According to experts, the decision to fund the startup is gaining attention because of who is investing in it. Tencent, the Chinese tech giant that is part of WeChat, contributed, along with the European Bank for Reconstruction and Development (EBRD).
Danying Ma, Managing Director of Tencent Investment, said, “Tencent shares Viva Wallet’s aspirations to create value for users and partners through innovation. We look forward to supporting Viva Wallet in its expansion across Europe. “
Additionally, Hedosophia, the little-known fund that has buffered into PSPCs in the United States, is also in the mix, according to a report from Techcrunch.com.
Breyer Capital is also a contributor of funds to the startup. Jim Breyer said in a statement after the announcement: “We are very happy to help Viva Wallet unify the fragmented European payments ecosystem in 23 countries. Viva Wallet is at the forefront of a paradigm shift for fintech and together we plan to transform the payments industry in Europe. “
New legal entity reportedly holds loans for Viva Wallet
Yannis Larios, vice president of strategy and business development at Viva Wallet, confirmed to Techcrunch that the company is in the process of shutting down a large Series D that will value the company at 1.5 billion euros (1.8 billion euros). of dollars).
While he does not reveal the real value of the company at this time, it is now seen as a formidable presence in its field.
The vice president said in the report that when his company closed its Series C in the second half of 2019, it was worth 305 million euros ($ 368,985,950).
At this point, it’s unclear whether this Series D amounts to a € 500million ($ 603million) investment round that Viva Wallet raised, according to a Reuters report in August 2020, which was supposed to her. make it possible to create a type of loan book that focuses on its cash advances and other similar loans.
If the deal is approved by regulators, investors will receive stakes in a new legal entity, which will hold the loans.
Although this is not the usual way of handling loan debt by neo-banks, experts believe that the point of going through this process is to allow startups to have more agility by removing some of the risk that it bears on its balance sheet.
It is not known at this time whether there will potentially be less liability regarding these loans.
The 2021 gains come after the excellent results of 2020
The funding comes as Europe begins to ease its transition out of lockdowns from the pandemic, which has ravaged the continent over the past year, particularly, of course, the tourism sector, including countries south of Europe are particularly dependent.
Since it focuses primarily on merchants, Viva Wallet is the kind of agile tech startup that can help some businesses recover at the start of the summer 2021 tourist season.
Haris Karonis, Founder and CEO of Viva Wallet, said in a statement: “We are delighted to integrate Tencent, EBRD and Breyer Capital into Viva Wallet.
“We are convinced that the extensive know-how and network of partnerships of our investors will accelerate Viva Wallet’s plan to unify the fragmented European payments market. The technological innovations we are bringing to European merchants will help them deliver a localized, frictionless payment experience to all of their customers, and free them from the hassle of maintaining legacy card terminals.
The neo-banking field is becoming more and more competitive, with other companies such as Finom, Wise, Monzo, Penta, Starling and ANNA in the mix at the moment.
However, TechCrunch says Viva Wallet is now receiving special attention due to its proven track record in the industry.
Vice President Larios said his business has been profitable since the first quarter of 2021, adding to gains made last year which totaled 40%.
Viva Wallet focuses on businesses, not consumers
As of now, Viva Wallet has 60,000 merchants using its system. Larios told interviewers he expects the company to have 100,000 such clients by the end of 2021.
Explaining that one of the ways that has made it so successful is that it has taken a “very localized approach to growth,” notes Larios, going so far as to set up offices in each country where it operates – this which not technically necessary in this digitally powered world.
Even as physical financial institutions close their physical locations, Viva Wallet relies on the security that merchants can feel when dealing with an entity that has offices nearby.
“Viva Wallet proves the resilience of its business model,†adds Larios.
The gigantic increase in funding will be used not only to expand its lending program, but also to add areas where Viva Wallet is already dominant, including the Tap-On-Phone point-of-sale option.
Unlike the system used by Square, the tap-on-phone system turns any Android device, including a smartphone, tablet or other device, into a card terminal, with which contactless and PIN payments can be made. .
No other hardware is needed for this type of transaction.
Larios also told reporters that there would be mergers and acquisitions underway for the company to expand into even more markets.
However, he states that Viva Wallet will not thrive in the consumer market, claiming that this particular area has turned out to have very slim if not zero profit margins.
Larios states that “Viva Wallet focuses only on businesses and will continue to do so. The consumer segment offers no space for profitability and we find that all competing consumer-driven neo-banking business models primarily burn money.
“We are focusing on SMEs (small and medium-sized enterprises) in Europe, providing a pan-European payment solution which is however very localized to meet the genuine local needs of merchants in terms of accepting local payments, local IBAN accounts, local BIN business debit cards, etc. “
Larios maintains that while his business may have a lot of small businesses as clients, he notes that it also serves mid-sized businesses, as well as even some supermarket chains, this will remain his area of ​​expansion.
This means that the company has created its own niche to the point that larger investors will also be more likely to invest in Viva Wallet.
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