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Are you a seal?


This week in fintech

January 25 · Issue #44 · View online

A weekly summary of the latest news in our world of finance, design, and technology.

Also: ✂️ Vipps taking on Klarna? 🚀 Did Stripe double its value in one year? 🌎 The Road Not Taken 🧐 Invest in Space exploration, cannabis, or art? 😶 Why do brands change their logos to look like everyone else?

🦭 Are you a seal?
Last week Vipps reported that usage of their login-solution has exploded since August. This is a key-strategy from Vipps in their fight against Facebook, Google, and Apple. Vipps main differentiator here is that users on Vipps are verified with BankID and users already trust them for payments.
Benedict Evans has written an interesting article in this regard about a theory he has when big companies are worried Big Tech are getting into their turf:
There is a theory that when a shark bites a surfer, this is because they look like a seal, especially from 50 feet underwater. [..]
I think about this theory a fair bit when I talk to big companies worried that Amazon or Google seem to circling around them, getting closer, and bumping into their legs. Maybe you look like a seal. And of course, maybe you are a seal. [..]
If Google can turn your business into a trivial part of Google, it will try. If it would have to recreate your entire company inside Google, it probably won’t.
Read the rest of Are you a seal?
✂️ Vipps taking on Klarna?
While we’re talking about Vipps: «Vipps Sliced Payment» is set to be the next big news from the Norwegian payment service after a slip up during a webinar last week. With Sliced payments Vipps move into the credit space and offer financing at the time of purchase. A smart move considering Vipps still is in deficit and “Buy Now, Pay Later” (BNPL) is how Klarna has managed to be one of Europe’s most valued fintech companies. 
Buy Now Pay Later solutions has surged during the pandemic. Affirm, the American competitor of Klarna, is preparing for an IPO valued at $5B to $10B IPO (Klarna is worth $10B+ for comparison). Tech writer Byrne Hobart has read the whole IPO filing and found out that this is what Affirm earns their money on:
  • Revenue from creating loans
  • Fees on servicing
  • Interest on loans
  • Selling loans to third parties
  • Virtual credit cards
It wouldn’t be a big surprise if we in a few years see virtual credit cards in Vipps. ;)
🚀 Did Stripe double its value in one year?
Stripe, which we frequently get back to in this newsletter, is in the market for more money after raising a round in April. However, their value in this next round could double their valuation to between $70 - $100 billion. This would make Stripe the first or second most valuable startup in the world, depending on how you do the math. Alex Wilhelm from TechCrunch sums it up rather nice: “Stripe’s possible new valuation could make some sense. The fact that it is still a private company does not.”
🌎 The Road Not Taken
If you find Stripe fascinating, you will enjoy this article comparing the different paths taken in the US, China, and India to ready their financial systems for the 21st century. Stripe is used in the US example where the payment system became automated early but has dated-but-mission-critical legacy code scattered throughout the system, enabling Stripe to create a convenience layer on top. In the other examples, you’ll see that the maturity of economic development, consumer/merchant behaviors, the regulatory environment, and the smartphone revolution played vital roles in shaping very different outcomes for the different countries. 
For example, did you know that India had a dysfunctional legacy payment system in 2015, but that they revamped their whole payment system in a few years to what now is considered the gold standard for modern payments?
The article continues to look into who will be best positioned for the next wave of financial innovation: Decentralized Finance (DeFi). China appears to be ahead of the curve with its central bank digital currency already in the pilot. But the transparency of crypto seems to be incompatible with China’s government. On the other side, there might be time for the US to revamp their old system to get a head start in the coming decentralized future.
🧐 Invest in Space exploration, cannabis, or art?
😶 Why do brands change their logos to look like everyone else?
😉 Sharing is caring!
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Marius Hauken, partner Stacc X
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