Hi embedded finance friend,

Today’s personal message is short, as we have a lot of news to cover. But a bit of spoiler: I am really excited about the two upcoming podcast episodes about embedded investment products for utility providers (July 2nd) and embedded payments for a hotel SaaS provider (July 16th). Make sure not to miss them. I learned a lot while recording them.

And a personal shoutout to Julian from German open banking provider Wallis for referring five new subscribers to my little newsletter (1,147 subscribers as of writing). Do you want to get a shoutout too? Share your personal referral link from the mailing.

But now let’s dive in. 👇

Top Story 📰

Danish accounting software provider Ageras is in fintech acquisition mode

The company was founded in 2012 in Denmark, and at it’s core, it provides a marketplace for tax and bookkeeping services, with a focus on small businesses and freelancers. It started its expansion to Sweden in 2013, and as of today, it is offering services in six countries: Denmark, Sweden, Norway, the Netherlands, Germany, and the US.

Besides its marketplace, Ageras has been heavily investing and growing its product and software stack. The service includes billing, invoicing, payroll, and reporting software, but specifically, its focus on banking solutions is evident.

In 2022, Ageras acquired Kontist, a banking product focusing on freelancers in Germany. Kontist started as a pure fintech in 2016, using Solaris as its infrastructure provider. In the years after that, Kontist added more and more non-financial products, most importantly its tax advisory services. But the Kontist acquisition was not Ageras only step towards banking services. Already in 2020, it acquired Tellow, a Dutch accounting tool for freelancers. In 2023, the Dutch company announced the launch of its own banking product in partnership with Swan.

Earlier this month, Ageras CEO Rico Andersen announced its intention to grow further with more fintech acquisitions. Especially the financial turmoil of the past few years has been a strong signal for him that supply and demand for a pan-European consolidation of the accounting and banking platform markets is available.

And just a week later, on June 19th, the company announced its acquisition of French fintech Shine. Similar to Kontist and Tellow, Shine is operating at the intersection of bookkeeping and banking and focuses strongly on the French market.

There are a lot of ‘hot areas’ in embedded finance, but the approach of Ageras has two very common embedded finance characteristics. Firstly, it focuses on businesses and freelancers and not on consumers, which makes it often ‘easier’ to create a successful business case. And secondly, its main product touches on finance in several ways, but it is not a fintech product at its core. Businesses that fulfil these two requirements are often well suited to launch financial services. Ageras shows how it can be done, and I will make sure to follow.

Finextra: Initial acquisition plans and Shine acquisition

‍

Non-Financial Brands 🏢

Europe

• Airline SAS partners with Danish neobank for new card product: Card holders can collect points for every transaction and use them for various travel benefits. The product does not seem to be ‘embedded’ into the SAS user experience, but it is nonetheless an interesting launch. (Danish press; product website)
• Sainsbury’s Bank finds a new home: The British grocery chain had already announced its intention to part ways with its financial service unit, and now it was announced that NatWest had acquired it. NatWest shows some clear appetite for embedded finance, since it is also offering banking-as-a-service products via NatWest Boxed. (NatWest Group)
• Ikas launches a lending product for e-com:  ‘German Shopify’ is probably a bit of a stretch, but yes, Ikas offers similar services to its US counterpart, and with its partnership with Banxware, it followed suit and entered the world of embedded finance. (LinkedIn; product website)
• Air France-KLM launches a payment product for travel agents: Nium's Airline Payments Solution will facilitate closed-loop electronic payments between the airlines and travel agents. This solution aims to lower payment costs, improve payment acceptance rates, and speed up settlement times, enhancing operational efficiency for both airlines and travel agents. (Nium)

North America

• Apple shuts down its own BNPL efforts: Apple announced Apple Pay Later last year, and started to offer installment payment options for its own products. It now decided to close down the efforts in favor of collaborating with specialised BNPL providers such as Affirm. (Finextra)  
• AmEx acquires a restaurant reservation platform: The $400 million deal will enable Tock to enhance its value to customers through American Express' extensive dining network. The acquisition aims to innovate and expand AmEx's dining program, benefiting small businesses via Amex Offers and Card Member benefits. (Finextra)

‍

Infrastructure Provider 🏗️

Europe

• Swan expands to Italy: The French banking-as-a-service provider opens an office in Italy and now has a local footprint in five European countries (France, Germany, Spain, the Netherlands, and Italy). The office and staff in each country are necessary to offer local IBANs, an important feature for many use cases. (The Paypers)
• Liberis and Paytrail are partnering to offer revenue-based financing to Finnish e-commerce businesses: The new service, Paytrail Financing, will enable businesses to access funding in as little as 48 hours with payments aligned to their revenue streams. This initiative aims to support around 7,000 merchants in Finland by providing fast, flexible, and pre-approved funding, helping them to unlock short-term growth opportunities. (Finextra)
• Lemon Markets partners with German neobank Tomorrow: The sustainable neobank Tomorrow is leveraging Solaris for its banking products and previously used them for their investment features as well. Solaris decided to stop offering investment products in order to focus on banking, and investment infrastructure provider Lemon Markets scored the deal, likely winning against its rival Upvest. (Finextra)
• Stripe announces new solutions for the French market: Alma, a BNPL provider, will be integrated as a payment option, expanding Stripe's payment methods. Additionally, Stripe is enhancing its terminal capabilities, introducing the customizable Stripe Reader S700, and partnering with Cegid for seamless in-person payments. (The Paypers)

North America

• Lending provider Pipe secures a $100 million credit facility: Pipe started with a direct-to-business financing product, where they could receive up-front cash for future revenue. But instead of going only directly to businesses, they have switched strategy and favor an embedded approach, where they partner with relevant platforms to offer their financing products. (Fintech Futures)
• Column Bank wins Brex business bank account deal: Plaid founder Will Hockey and his team purchased a small bank and announced that in 2022 they plan to turn it into an infrastructure bank for fintech and non-financial brands. Naturally, it has received a lot of coverage since then, but now it seems to have closed its first massive deal where it will be the partner for the new business banking product of US unicorn Brex. (Finextra)
• Embedded lending provider Gynger raises $20 million in equity and $100 million in debt: The company targets software vendors that could offer financing products for technology purchases with flexible, non-dilutive capital. (Pymnts)

Rest of the world

• Brankas and Global Finteq have partnered to launch a lending-as-a-service platform in the Philippines: The platform will allow various financial institutions to offer lending services via non-traditional channels. Utilising Brankas’ APIs and Global Finteq’s loan management expertise, this initiative aims to accelerate digital lending, enhance financial inclusion, and support underserved communities. (Finextra)

‍

Banks & FIs 🏦

• How a banker approaches embedded finance: Jon Briggs leads KeyBank’s embedded banking strategies and in this article (paywall), he shares insights into their partnership with companies in healthcare and other industries. (American Banker)

‍

Insightful links 🤓

• How does banking-as-a-service differ in the US and Europe?: Author Michael Jenkins from ‘This Week in Fintech’ interviews different founders and leaders of European infrastructure providers and shares a great summary. PS: Subscribe to his newsletter! (TWIF)
• How can you build a debit card in the UK in four months?: Fana enables users to make donations through everyday purchases. They explain their journey of identifying and exploring different card setups and share their approach. (Hackernoon)
• Will the consent orders bring clarity to banking-as-a-service?: The author is likely biassed due to her employment with the BaaS provider Unit, but nevertheless, similar historical actions in other areas of financial services led to regulatory clarity and normalization. Perhaps the recently issued consent orders will eventually strengthen BaaS by ensuring better compliance and oversight? (The Financial Brand)
• Thredd's CEO emphasises the need for regulatory oversight in banking-as-a-service: In light of the Synapse bankruptcy, vulnerabilities in the BaaS model have been highlighted, particularly regarding compliance and fund management. The focus is on strengthening collaboration and transparency between fintechs and banks to ensure better compliance and risk management, ultimately benefiting the financial ecosystem. (Pymnts)
• How do ledgers actually work?: The CEO of US BaaS provider Unit took the problems with keeping ledgers accurate from its bankrupt competitors Synapse as a reason for a short deep dive in a few LinkedIn posts. (LinkedIn)
• Virtual cards face challenges in supplier acceptance: Despite offering efficiency and certainty in B2B payments, suppliers are hesitant to adopt them due to their unfamiliarity and perceived costs. To overcome this, issuers need better tools to explain benefits and offer attractive rates. Increasing acceptance could shift significant B2B spending to virtual cards, enhancing cash flow and operational efficiency. (Pymnts)

‍