The Fintech Files: VC funding craters in London, and ‘The Merge’ beckons

The consulting giant blamed factors like the war in Ukraine, skyrocketing inflation and increasing interest rates. But the report also pointed to the London Stock Exchange Group’s $14.8bn deal to buy Refinitiv last year — a big one-off that flattered that period versus now.

Attempts by KPMG’s global fintech leader Anton Ruddenklau to be enthusiastic about the figures were muted, at best. He said that after last year’s unusually large total, the first half was “quite positive” – a ringing endorsement if ever we heard one.

But not only did the total money invested fall – so too did the number of investments. In total there were 262 fintech deals, including M&A, private equity and venture capital in the first half of the year, compared with 341 in the same period of 2021. 

Ever the optimist, Ruddenklau added that despite uncertainty in the market, fintech’s saving grace is that it has a broad range of sub sectors, such as regtech, which has become more popular since Russia invaded Ukraine amid strong interest in anti-money laundering applications.

That could keep investment “relatively solid,” he said. 

Don’t get carried away, Anton.

Headlines this week

KKR takes a portion of PE fund to public blockchain

US Treasury to raise red flags over crypto risks as key reports near

El Salvador is not a crypto paradise. It’s a warning

Regulators allege Celsius made false claims to investors over firm’s financial health

Binance pulls back from USD Coin as crypto wars heat up

The Merge

Institutions keeping a weather eye on crypto over the summer will have noticed a growing buzz around the Ethereum Merge – a software upgrade of the world’s second-largest cryptocurrency and its blockchain.

Well, it’s finally upon us. The huge process of migrating all of Ethereum’s data and future operations onto a new system is in progress, and could be complete by 15 September. 

The process may cause headaches for some in crypto land. Take struggling crypto lender Hodlnaut, which recently warned that its assets could be at risk if the Merge stokes further volatility in the digital assets space.

But while many people understand the basic premise of the transition (to make Ethereum less damaging to the environment) it remains a complex subject. So here are some Financial News articles about the Merge for those looking to get up to speed.

Five things to know about ‘The Merge’

‘The Merge’ could be a landmark moment

Why ‘The Merge’ matters for institutional investors

Here’s what ‘The Merge’ means for the crypto industry

Why ‘The Merge’ could boost Coinbase stock

JPMorgan buys (another) fintech firm

Whatever one thinks about Jamie Dimon, the outspoken JPMorgan boss has stayed true to his word when it comes to buying up fintech companies.

Last year the bank chief said fintech was one of the “enormous competitive threats” to banks, and said he would get more aggressive in acquisitions in the space.

Now, he has bought a fourth major player in 15 months, picking up cloud payments firm Renovite. The bank said the deal would help it build its “next-generation merchant” acquiring platform, which processes payments on behalf of businesses, and help it modernise its payments offerings.

“This acquisition will help us achieve our goal to develop the next-generation payments processing platform globally,” Max Neukirchen, the bank’s global head of payments and commerce solutions, said in a statement.

In January the bank agreed to take a 49% stake in Greek payments company Viva Wallet. It also agreed to buy Global Shares of Ireland in March and UK digital wealth manager Nutmeg last year.

Our favourite stories from around the web

Electricity bills are surging and crypto mining equipment isn’t worth what it used to be. For companies in the space, that’s a big problem, reports the Wall Street Journal.

Elsewhere, Decrypt takes a look at another side of the Ethereum merge: What could potentially go wrong (spoiler: a lot).

And finally, one online community cheered when bitcoin crashed earlier this year, reports the Guardian. Its name? Buttcoin. You know you want to keep reading…

The last word

As the world took a moment’s pause to mourn the death of Queen Elizabeth II, one community has decided to cash in on her passing.

In the hours after the announcement on 9 September, non-fungible token market OpenSea was flooded with thousands of newly minted NFTs themed around the Queen, according to Fortune.

The NFTs listed for auction on OpenSea included digital stamps with the Queen’s profile and photographs of the Queen with beaming red eyes – a common edit on portraits that has become popular in crypto circles.

Meanwhile, on some decentralised crypto exchanges, tokens with names like Queen Elizabeth Inu, QueenDoge and London Bridge is Down were also launched.

Stay classy, crypto.

To contact the author of this story with feedback or news, email Alex Daniel