Dutch Bookkeeping Tool Launches Banking + $33M BaaS Funding in MENA

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Hi embedded finance friend

I will test a few new things with this newsletter over the next few editions. Today, I am starting with:

1. Voting → I am adding a vote to each news story to get your input and perspective. I will share the results of the votes in the next edition, but I am much more interested in your comments (you can add them after you click on your preferred answer). If there are enough relevant comments, there might be a chance of funnelling the discussions together (e.g., virtual group discussions). Thus, I invite you to actively use the votes and comments to explore this together.

2. Event Calendar → From this edition onwards, I will include an event calendar. You can find it right below in this edition, but I will move it to the end in the next editions. The event calendar will include events in which I am actively involved, but I might add other relevant events later.

As usual, let me know what you think of these changes and/or if you have any other suggestions.

And now let’s dive in 👇

Event Calendar

• April 3rd, London: Our Private Dinner focused on Payouts and Payments hosted together with Marqeta [Reach out to me if you want to join]

• April 9th, Berlin: Our 6th Embedded Finance Review Event during FIBE, sponsored by 13books Capital, Swan and Visa [Register here]

• May 15h, Helsinki: Nordic Fintech Summit, I will be hosting a panel discussion [Register here]

• June 25th or 26th, Frankfurt: TechQuartier Digital Finance Accelerator, I will be hosting a Masterclass [Apply here]

Solving Real Customer Problems: Key Insights from Paul Staples on Embedded Finance Evolution

What's the biggest learning of embedded finance over the past years? Don't just launch financial services, but figure out the jobs to be done for your customers.

In this podcast episode, I am speaking with Paul Staples, who previously built embedded banking products at HSBC and ClearBank.

I speak with Paul about

• The Evolution of Embedded Finance Since 2020

• Why Brand Power Alone Doesn't Work for Financial Products

• The Jobs To Be Done Approach to Embedded Finance

• Banks' Evolving Role in the Embedded Finance Ecosystem

• The Next Wave of Embedded Finance

You can find the episode on Spotify, Apple Podcasts, and YouTube.

Snelstart Partners with Flow and Adyen to Launch Embedded Banking for SMEs and Freelancers

What happened: Dutch bookkeeping provider Snelstart has launched an embedded banking product in partnership with Flow and Adyen (Flow). Snelstart targets freelancers and small and medium-sized businesses, offering services ranging from invoicing to inventory management. It’s not the beginning of a new partnership, as Snelstart and Flow already partnered when Flow was offering a finance-management app for freelancers.

My comment: Another bookkeeping tool launches an embedded banking product. We have seen this trend for some time, but it also feels like we have seen a substantial uptick in such partnerships in the past few months. Probably the most interesting angle of this announcement is the companies behind it. Adyen is probably known to many as the popular payment service provider for large enterprises, and with its Balance platform, the Dutch company also offers banking and financing products. However, Adyen remains focused on large enterprises. Even mid-sized companies are often too small for Adyen. This brings us to Flow, which is significantly smaller than Snelstart. However, as a potential aggregator of different customers, Adyen believes that the future size of all of Flow's partners is sufficient for them. You might want to argue that Flow has opened the door to Adyen for Snelstart, but it is important to highlight that Flow also offers a front-end product and other workflow features for companies like Snelstart. Consequently, the value chain is Adyen (BaaS) → Flow (Frontend and features) → Snelstart (Bookkeeping with embedded banking).

When looking at the market of embedded banking products, this remains a rather uncommon approach since most non-financial brands would build the front end themselves on top of the banking-as-a-service provider APIs. I would say there are pros and cons to this strategy. Most likely, Snelstart might think they would take very long to build such an embedded banking product themselves or perhaps not at all if the right tech teams are not in place. Therefore, Flow provides them with the required front end and access to Adyen’s platform.

NymCard Secures $33M Series B Funding to Expand Banking-as-a-Service in MENA Region

What happened: Dubai-headquartered Nymcard has raised USD33 million in its Series B funding led by QED (Finextra). The banking-as-a-service company targets brands, fintech companies and financial institutions in the MENA region. It offers services in three core areas: card issuing processing, embedded lending, and money movement.

My comment: I remember hearing about NymCard for the first time in the early 2020s, and they seem to be continuously growing since then. Their success until today as a banking-as-a-service and infrastructure provider seems to come mostly from ‘fintech clients’ and not so much ‘embedded finance’ - at least so far. NymCard is regulated in the UAE and Qatar but is likely also seeking licences in other markets, such as Saudi Arabia. This means they can work with unregulated companies only in these regions, especially in the UAE, where they seem to focus on corporate card spending platforms and teenager-focused financial education apps. In the rest of the MENA region, they are likely powering regulated companies, mostly local banks and financial institutions.

That said, NymCard’s website displays a lot of embedded finance use cases, from marketplaces, mobility, and travel to healthcare payments (NymCard). Maybe these partners are already out there, and I have missed them, or NymCard is increasing its focus on non-financial companies. Technically, fintech and embedded finance are separate things, but we see in most markets that fintech comes first, and embedded finance starts after that - especially in areas where pure fintech has had limited success. So perhaps we will see a rise in embedded finance launch announcements in the MENA region?

In Other Embedded Finance News

• Flagship Advisory’s deep dive into the e-commerce giant Mercado Libre highlights its eco-system growth and fintech products (Flagship Advisory).

• Ant International Launches Embedded Finance Service for E-Commerce SMEs in Brazil (The Paypers).

• Building an Issuer Processor: What Does It Take? (LinkedIn).

• Edenred Payment Solutions introduces its virtual card number product (The Paypers).

• Flowpay raises $32.7 million to grow its embedded lending solution in Europe (PYMNTS).