Hi friends

Welcome to another edition of Embedded Finance Review. It has been rather quiet on the non-financial brand side, but the infrastructure provider filled the empty space.

But let’s dive in!

Thanks to the 29 new subscribers since the last post. Do you know a friend or coworker who is interested in Embedded Finance? Please share EF Review with them.

Non-Financial Brand News

Non-Financial Brands are the 'Frontend' in Embedded Finance. By definition, these companies are not from the Financial Service industry but are offering financial products 'embedded' in their non-financial offering.

🇺🇸 Landlord-focused insurtech Obie lands $25.5M led by Battery Ventures

🇺🇸 Car IQ Enables Vehicle Payment Solutions at Sinclair Fuel Stations

🇺🇸 Zip launches Intake-to-Pay platform for procurement

Question from the community: Who is the person behind EF Review?

In this section, I am discussing a question that subscribers have sent to me. This time, it is a personal question about how I ended up in Embedded Finance.

I am not the type of person who likes to talk about himself. However, multiple readers have pinged me in the past few weeks to learn more about my background. I understand that the content of this newsletter might be interesting to them, but they also wanted to know what my personal motivation is for this newsletter.

My name is Lars Markull and I am currently working as an Embedded Finance advisor. In this role, I support various companies in planning, developing, and launching Embedded Finance products. I have been working in Fintech infrastructure since 2014 and spent my first five years in Open Banking. Open Banking is a fascinating market, but in the years 2019–20, I wanted to work in a different area and was looking for “my next thing”. While working on a few different projects, talking to other people, and reading about the concept of Embedded Finance, it clicked on my end. Banks and financial institutions are extremely important stakeholders in Fintech, but very often they are not the best players to offer financial products; non-financial brands are often better positioned.

In the fall of 2020, I joined Weavr in an early phase and was part of the company for a bit more than two years. At the end of last year, I left Weavr for one reason: I wanted to be personally more involved in supporting the development of Embedded Finance as a whole. The concept of Embedded Finance means that players from different industries have to work together, and due to my experience, I believe it needs people to translate, navigate, and evangelize. My role as an external advisor is currently my income, nevertheless, I am investing a good amount of time to grow the industry as a whole. This newsletter is one of these initiatives. Others are Embedded Finance events, and I am planning additional content and educational projects.

I hope this gives you a better understanding of who I am and what motivates me to write the Embedded Finance Review. I am always open for a chat and am supportive of anything that grows Embedded Finance. So please ping me if you have some ideas to discuss.

Infrastructure News

Infrastructure providers are the 'backend' of Embedded Finance and empower the non-financial brands to offer financial products. In this section, we cover pure technology companies, financial institutions or a combination of both.

🇬🇧 Monese to offer “coreless” banking platform through new entity, XYB

🇬🇧 Embedded Finance Brings Checkout Innovation to European B2B Merchants

🇫🇷 Swan open sources no-code banking interfaces

🇫🇷 How Fygr is leveraging October’s Embedded Lending solution

🇩🇪 Tilta taps Mambu to launch embedded purchase lending solution

🇩🇪 Solaris Releases Sustainability Report

🇧🇬 Paynetics to acquire payments app provider Phyre

🇺🇸 Alviere partners Array to add financial wellness tools to embedded finance platform

🇺🇸 Galileo Financial Technologies connects with AWS Marketplace

News highlight

🇺🇸 Fifth Third Announces Acquisition of Rize Money

The US BaaS market is incredible crowded, with easily 20 players. This includes 1st generation companies like Synapse which was founded in 2014, and newer generation companies like Unit, which was founded in 2019. Clearly, the US is the biggest market for BaaS and Embedded Finance, so it’s understandable that many players took their shot. But it’s also fair to say that many of them are dependent on continuous venture funding, which obviously came to a halt in the past twelve months. Thus, a consolidation in the US BaaS market is overdue.

This week, the US bank Fifth Third announced that it had acquired US BaaS provider Rize Money. Personally, I believe this is the first of many mergers or acquisitions in the space. This acquisition of Rize Money is a bit more interesting since a bank has taken them over. Obviously, banks should be getting stronger in the Embedded Finance space, and if providers are now struggling to receive additional funding, then the timing might be perfect. Additionally, it’s not a surprise that Fifth Third is the first bank in the US to capitalize on this situation. Fifth Third has been positioning itself nicely with an Embedded Payments offering and partnerships.

The combination of Fifth Third and Rize Money seems like a good fit, and it will be interesting to see if other banks follow this trend. I assume other BaaS players are/could be available for an acquisition.

Insightful reads

🍎 Why is Apple taking a bite out of banking?

📈 The rise of true Banking as a Service, consumer-focused regulation and AI innovation

🎮 Embedded finance: how (and why) it completely changes the game

🧭 Navigating the Regulatory Landscape of Embedded Finance

👨‍💼 SMB Banking is Being Changed Rapidly by Embedded Finance

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