Two Embedded Finance Acquisitions Reshape European Market

Hi {{first name|embedded finance friend}}

I am excited to announce our second virtual event, scheduled for July 25th at 10 am (CEST): Register here.

In this session, I will discuss the impact of Fintech on other industries, with Fintech investor Meera Bissoondeeal from 13books Capital. While this includes Embedded Finance, we will be expanding our scope to analyse the broader impact of Fintech on specific industries.

I will begin by asking Meera a few questions. However, we hope that guests join quickly and steer the discussion in the direction and industries that are most interesting to them (based on early feedback, Healthcare and Logistics seem to be the most interesting ones).

From my network: A startup is working on launching a consumer credit (!) card for a specific segment in Germany. The team is live with a V1 powered by Open Banking. B2C and credit card are a tough one, so if you know a suitable provider who can help, let me know!

And now let’s dive in 👇

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Looking for Embedded Finance help?

If you're a non-financial brand, infrastructure provider, or bank launching or scaling an Embedded Finance offering, I have availability this summer. Reply to this email if you need support.

In the latest Embedded Finance Review podcast episode, I sat down with ToolTime co-founder and CPO Marcel Mansfeld. ToolTime targets German craft businesses with a vertical SaaS solution and launched a payment product with Adyen last year.

We spoke about:

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

What happened: In April, US investment infrastructure provider Alpaca raised its $52 million Series C and shared its plans to expand to Europe (and other regions). And now we are seeing this plan being executed, as Alpaca acquired British competitor Wealthkernel (Finextra).

My comment: The investment infrastructure space is becoming increasingly competitive. The four most prominent names in Europe, Seccl and Wealthkernel from the UK and Lemon Markets and Upvest from Germany, have made several funding, expansion and new partnership announcements. Additionally, there are other providers, such as the German providers Evergreen and Sutor Bank, that are also growing their partnership activities.

Alpaca’s acquisition of Wealtkernel demonstrates the seriousness with which Alpaca approaches its European expansion. Acquiring a company of the size, footprint and leadership of Wealtkernel should mean fewer expansion missteps and faster execution. According to Wealthkernel employees, the acquisition is expected to help the company secure larger deals (LinkedIn).

While Wealthkernel received its Spanish licence in 2024 and is onboarding its first EU clients (Wealthkernel), the same can be expected from Upvest in the UK soon. It will be interesting to see how these players compete against each other and who achieves better success with non-financial brands in the years ahead (almost all customers from these providers are from the financial service industry, and thus, not Embedded Finance).

PS: I have not taken a closer look at these different investment infrastructure providers. If you're interested in collaborating on a deep dive, please let me know.

What happened: The Dutch Embedded Banking middleware provider, Flow, is being acquired by one of its customers, Snelstart (LinkedIn).

My comment: Flow initially started as a B2C money management solution for consumers and freelancers, powered by Open Banking. However, the startup pivoted into Embedded Finance, making its frontend and automation features available to non-financial brands, including accounts and cards via its Embedded Banking partner Adyen (covered in an previous newsletter).

Snelstart targets freelancers and small to medium-sized businesses with a digital accounting solution and adjacent features. The brand and team of Flow will remain independent, and Flow will continue to be open for business with other brands (as long as they don’t compete with Snelstart).

Thank you for reading. I hope you enjoyed this edition.

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Best wishes from Berlin,

Lars Markull (LinkedIn)