Weekly update #54

Welcome to this edition of the weekly newsletter. The idea behind this is to gather all the information in the startup ecosystem in one place, with a special focus on the fintech market.

The latest episode of Builders has been released this week. In this episode, I sit down with Carlos Mario Marín Arroyave , CEO and co-founder at Akua , to talk about the LATAM credit and fintech market, the open finance environment in the region and the Brazil leadership in that direction.

Carlos has held leadership roles as Country Manager for Colombia and Peru at many interesting fintechs like Pomelo and PayU , and Fintech & Digital Partnerships Director at Mastercard.

You can find the complete video interview here on YouTube, or you can listen to the podcast here on Spotify or here on Apple Podcast.

As always, if you are a VC manager or a founder and want to be the next guest on the podcast feel free to send me a message on LinkedIn!

Coming back to us, this week I read an interesting report fromImplement Consulting Group commissioned by Google on the impact of AI in the job market in Italy, named “The economic opportunity of AI in Italy”. Here my main takeaways:

First takeaway is that the widespread adoption of generative AI could increase Italy's GDP by 8%, translating to an annual GDP boost of €150-170 billion in the peak year, potentially within ten years. The primary economic benefit is from a productivity increase, estimated at €120-130 billion, impacting around 58% of workers through enhanced efficiency and capabilities.

The model also accounts for re-employment of workers displaced by automation (around 7% of the workforce), adding €40-50 billion. However, re-employment comes with an estimated productivity loss, potentially reducing the GDP boost by up to €10 billion. This delayed adoption of AI could decrease annual GDP gains to about 2% (€30-40 billion).

In terms of job, 24 million positions could be affected. Approximately 8 million jobs, representing 35%, are not likely to face automation impacts. These roles largely involve manual labor and direct human interactions, such as construction, personal care, and food services, where automation's reach is limited. In contrast, around 14 million jobs, or 58% of the workforce, will likely experience significant augmentation from generative AI. This category includes positions in professional services, healthcare, education, and legal sectors, where AI is expected to enhance productivity by automating certain tasks rather than replacing entire roles.

However, an estimated 2 million jobs, constituting 7% of the workforce, are at risk of full or partial displacement due to high exposure to automation. Jobs in customer support, contact centers, and translation may see fundamental changes in their requirements, potentially necessitating that affected workers transition to different types of employment.

7% of jobs in Italy are expected to be highly exposed to automation through generative AI, potentially leading to job transitions. In contrast, 58% of jobs will likely experience productivity gains due to AI augmentation, ensuring net job growth rather than job loss. Increased GDP growth from generative AI will drive greater demand for goods and services, indirectly creating more jobs across various sectors.

Despite these shifts, job openings due to generative AI are anticipated to be relatively small when compared to the natural job market dynamics in Italy, where approximately 1.1 million jobs open and close annually.

Finally, sector by sector, In knowledge-intensive sectors, such as professional, scientific, and technical activities, 10% of jobs are likely to face full or partial displacement, while 79% will have AI as a complement, leaving 11% with no automation exposure. Similarly, in the information and communication sector, 10% of jobs may be displaced, 78% will be complemented by AI, and 13% remain unaffected.

The financial and insurance sector shows a higher displacement risk, with 15% of jobs potentially displaced, 72% augmented by AI, and 13% unexposed. Education presents a relatively low displacement rate at 5%, with 81% of roles augmented by AI and 13% unaffected.

In less knowledge-intensive sectors like manufacturing, 7% of jobs are at risk of displacement, 44% will benefit from AI support, and 49% are unlikely to see automation. The construction sector has the least AI integration, with only 5% displacement, 32% using AI as a complement, and 64% unaffected.

Anyway we saw some very interesting news in the market this week. OpenAI bought the Chat.com domain to host ChatGPT, Affirm is launching its BNPL service in the UK and Klarna is working with Zoom to provide payment services in their work suite. UBS launched their first tokenized fund on Ethereum and Pix collaborated with Google to launch Pix by proximity in Brazil. In the VC market, we saw many new funds this week: Benchmark raised $170 million for its partners only fund, BITKRAFT Ventures launched a $275 million gaming fund, Stride Ventures launched a $165 million third fund, and Theory Ventures closed a staggering $450 million second fund. And finally, we saw some very interesting funding round from fintech startups like Tola, VibePay, Procurify, fundcraft, Auquan, Kaizen, Neem, Predikt and many others.

But let's take a closer look at the main news of the last seven days:

Closed deals

• Fintech startup Tola raised a $10.2 million seed round led by Sequoia Capital
• UK based fintech VibePay secured a $5 million in fresh funding
• Fintech startup Further raised a $4.1 million pre-seed round to help American citizen buy a house for the first time
• Spending management platform Procurify raised $20 million in growth capital from CIBC Innovation
• fundcraft raises a $6 million series A to transform how funds handle back end operations
• UK fintech Recognise Bank lands a $25 million investment round amid leadership transition
• AI fintech startup Auquan raises a $4.5 million seed round led by Peak XV Partners
• London based fintech Kaizen secured a $42 million investment from Guidepost Growth Equity
• B2B BNPL provider MODIFI raises $15 million to expand SME export across Asia
• Pakistan fintech Neem secured a $4 million credit facility from DNI Group
• Mumbai based Easy Home Finance Limited raised a $35 million funding round
• Belgian fintech startup Predikt secured a $750k in funding to produce AI driven financial forecasting

Insights on the VC industry

• Benchmark is raising $170 million for its latest partners-only fund
• Creative Capital Ventures Group raised a $18 million fund to invest in tech and media
• Riyad Bank along with 1957 Ventures launched a $213 million fund to invest in fintech
• BITKRAFT Ventures has just launched a $275 million gaming fund
• Wa'ed Ventures, VC arm of Armco, allocated $100 million invest in AI startups
• Stride Ventures announced the closing of a third $165 million fund
• California based VC Theory Ventures raised an impressive $450 million for its second fund
• Listen Ventures raised a $75 million fourth fund
• Civil rights organization NAACP has just launched a $200 million fund of funds, NAACP capital
• MaC Venture Capital just raised a $150 million third fund
• Lisbon based VC Faber secure a first closing of $31 million out of its $60 million target
• Paris based Axeleo Capital (AXC) closed a first $125 million fund to invest in green tech

News on the market

• BNPL provider Affirm is launching its service in the UK
• Barclays has completed its $600 million takeover of Tesco Bank
• Klarna strikes a deal with Zoom to launch a flexible payment options for their workplace
• UBS Asset Management just launched its first tokenized fund on Ethereum blockchain
• Crypto custody platform Zodia Custody is in talks to raise a $50 million funding round
• Marqeta shares plunge more than 40% after forecasts miss
• J.P. Morgan rebrands its blockchain unit Onyx to Kinexys by JPM
• Pix and Google Brazil collaborated to unveil Pix by Proximity, a contactless payment solution
• Ingenico to start a trial to accept crypto payments through POS
• OpenAI acquires the premium domain Chat.com

A special look in the Italian market

• -

And here some useful resources for everyone involved in the ecosystem:

Events you don’t want to miss

• Web summit | Lisbon 11-14.11.2024 (Link to the invite or website)
• FTT Fintech festival | London 11-12.11.2024 (Link to the invite or website)

You have a cool event you want to mention or to sponsor? Feel free to send me a DM.

Startups raising funds

• Loyyal - Loyalty platform from the MENA region, with entities in the US and South East Asia, provides a B2B2C platform to handle multiple loyalty programs and earn rewards all over the world. Raising a $6M Series A
• Freedhome - Proptech and fintech platform, enabling people to be able to gain profit from real estate by renting them to intermediaries. Raising a $1M seed round

• PopulaRise - The platform that allows companies of every dimension to promote themselves on social media through the collaboration with their clients. B2B2C SaaS. Raising $1M.
• Tutornow - Edtech that provides an online tutoring platform for students with learning disorders. Raising $500k to $1M.
• Weagle - B2B Tech startup that provides the very first browser designed for company, with total security for sensitive data. Raising $6 millions for their seed round.

• Shoppy Code:Gift card platform that offers a points based loyalty program. They share part of the profits coming from marketing budgets with their customers. Raising $500k.

Take also a look at the last edition of the newsletter, Weekly update #53