FinTech Friday: GoCardless, the latest UK fintech to inch closer to tech ‘unicorn’ status

FinTech Friday is our weekly check-in here at Spreckley, where we share all the most interesting and useful financial services and financial technology news, innovations and trends.

This week, we look at GoCardless, the latest UK fintech to inch closer to tech ‘unicorn’ status, the latest moves by the Chinese government to reign in Jack Ma’s Ant Group in the run up to what should have been one of the biggest share offerings in history, and the ways in which Upstart uses AI to intelligently determine consumer creditworthiness.

UK’s GoCardless nears ‘unicorn’ status

BusinessInsider has the inside track on GoCardless this week, reporting that the British payments tech start-up is very close to hitting ‘unicorn’ status, following its latest $100m Series F (£77m) funding round.

The latest UK fintech to hit that magical $1 billion dollar valuation has seen a surge in demand over the pandemic, which has driven the boom in the number of digital purchases online and via mobile.

GoCardless’ tech, that let customers set up direct debits to businesses easier and faster than ever before, has seen a huge surge in demand from people shopping online, with the number of payments it processed up 91% over the course of this year.

Chinese government reigns in Jack Ma’s Ant Group

Perhaps the biggest global fintech story this week is the suspension of the stock market flotation of Jack Ma’s Ant Group, which was planned to be one of the biggest share offerings in history.

Chinese regulators are reigning in Jack Ma and the Chinese fintech’s top execs, as Bloomberg reported this week

“China’s torpedoing of Ant Group Co.’s initial public offering is the most dramatic example yet of the financial frictions emerging globally as fintech upstarts invade the territory of central banks and closely-regulated traditional lenders.

“While the eleventh hour suspension of Ant’s record-busting IPO has more than a hint of Chinese internal politics about it, it also reflects the global struggle by regulators to catch up with the pace of innovation. Wake-up calls from Facebook Inc.’s Libra currency project to the collapse of Germany’s Wirecard AG are forcing that urgency.”

Upstart’s use of AI to determine consumer creditworthiness

Finally, TechCrunch takes a look inside fintech startup Upstart’s latest IPO filing this week, reporting that:

“While the world awaits the Airbnb IPO filing that could come as early as next week, Upstart dropped its own S-1 filing. The fintech startup facilitates loans between consumers and partner banks, an operation that attracted around $144 million in capital prior to its IPO.

“Upstart’s technology uses what it describes as artificial intelligence (AI) to approve consumer loans. It collects consumer demand for credit and connects that demand to bank partners who fund the loans. The company’s AI-powered credit tool can give consumers “higher approval rates [and] lower interest rates,” according to its S-1 filing, which offers banks “access to new customers, lower fraud and loss rates, and increased automation.

“If Upstart’s AI tool can, in fact, more intelligently determine consumer creditworthiness, everyone could come out a winner, with consumers paying less and banks adding to their loan books without taking on outsized risk.”