I look at two mental models explaining why and how financial APIs have led to the creation of billions in enterprise value. The driving news is that Square Cash is competing with Robinhood in free trading, powered by trading API company DriveWealth. Last week, we saw that Chime, Robinhood, and Monzo were powered by payments API company Galileo. Should these enablers be worth the billion-dollar valuations of their clients? Are APIs inevitable technology progress? Or are we just seeing venture financing spilling desperately into a rebundling play to find profitability?
The fintech industry is coming up on the tipping point of funding, revenue generation, and user acquisition to rival traditional finance with $20 billion in YTD fintech financing, the several SPACs, and Visa’s $2B Tink purchased. Defensive barriers have eroded.
Let’s take a moment to compare capital. While it is not the money that wins markets, it is the transformation function of that money into novel business assets that does. And while the large banks have a massive incumbent advantage with (1) installed customers and assets, and (2) financial regulatory integration (or capture, depending on your vantage point), there is a real question on whether a $1 generates more value inside of an existing bank, or outside of an existing bank — even when it is aimed at the same financial problem.
Swedish open banking platform Tink, undeterred by the evolving financial crisis, has acquired the Spanish account aggregator platform Eurobits Technologies;...
Tink just closed a €90 million funding round; now Tink is working with BNP Paribas on account aggregation, payment initiation...
Tink is an open banking platform enabling connections between banks and other institutions; the new financing comes after a €56...
PayPal participated in Tink’s $90 million funding round which was announced back in January; to go along with the investment,...
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