Dutch fintech start-up Mollie’s payments platform in action.
LONDON — Mollie was a relatively little-known company before Covid-19. Now, it’s one of Europe’s biggest fintechs.
The Amsterdam-based online payments processor finally became a “unicorn” valued at more than $1 billion in September, more than a decade after it was founded by Dutch entrepreneur Adriaan Mol in 2004.
On Tuesday, Mollie announced it had raised $800 million in a mega financing round valuing the company at $6.5 billion. That makes it the third-largest fintech unicorn in Europe after rival firm Checkout.com, according to CB Insights data.
Mollie’s founder said the company originally got its start as a text messaging business, but soon pivoted to payments after trying to integrate its own system for clients to pay their invoices.
“I was amazed at how badly that was built by the traditional banks,” Mol told CNBC last year. “We created this abstraction layer to the complex systems of the banks. That was the start of our payment business.”
Shane Happach, who recently took over from Mol as CEO, said the company opted to grow organically for several years before taking external funding for the first time in 2019. A year later, Mollie raised $100 million in a round led by growth-stage tech investor TCV.
After that deal, Mollie was soon flooded with offers from investors, Happach said.
“We’re trying to build a $100 billion company,” he told CNBC. “We know that takes a long time. It’s capital-intensive.”
Mollie’s latest investment round, a Series C, was led by Blackstone’s growth equity investing unit. EQT, General Atlantic, HMI Capital and Alkeon Capital also invested.
Competition in payments has intensified over the past decade, with fintech players like Stripe, Jack Dorsey’s Square and Netherlands-based Adyen all vying for a bigger share of the $2 trillion market.
Unlike its American rivals, Mollie says it mainly focuses on transactions with small businesses in Europe.
“A lot of investors don’t have a bet on Europe,” he added. “Mollie’s one of those unique assets that offers exposure.”
Stripe, which was last privately valued at $95 billion, raised hundreds of millions of dollars earlier this year to expand further in Europe. The company is dual-headquartered in San Francisco and Dublin.
Mol said his firm’s service is more “localized” than Stripe’s and not targeted at enterprise clients, unlike Adyen and Checkout.com. Onboarding smaller merchants requires “complex” compliance checks which some competitors don’t want to focus on, he added.
Last week, French President Emmanual Macron said he hoped that Europe will produce at least 10 companies worth 100 billion euros each by 2030. European start-ups have raised 45.9 billion euros so far this year, according to Dealroom data, already surpassing total investment for all of 2020.
“This investment underlines Blackstone’s confidence in Europe as a place for high growth companies to thrive,” Paul Morrissey, Blackstone Growth’s European investing lead, said in a statement.
Mollie, which says it’s profitable, plans to use the fresh funding to expand internationally, both within Europe in countries like the U.K., and in other regions like Asia and Latin America. The start-up also wants to increase its headcount from 480 employees to 780 in the next six to nine months.
Digital payments got a big boost from coronavirus lockdown restrictions as more retailers moved operations online. Mollie said it processed more than 10 billion euros in transactions in 2020 and is on track to handle more than 20 billion euros in payment volume by the end of this year.
Mollie says it has 120,000 monthly active merchants and is signing up around 400 to 500 new customers a day. The company’s clients include U.K. food delivery app Deliveroo and fitness apparel brand Gymshark.
Air conditioning and climate change: Start-ups trying to help
This June was the hottest in American history. The 116-degree heat melted power cables in Portland, Oregon, and smashed previous temperature records. Seattle recorded an all-time high of 108 degrees, as did the Canadian province of British Columbia, at a whopping 121 degrees.
As the world warms, more people are installing air conditioning. Global energy demand for cooling has more than tripled since 1990 and could more than double between now and 2040 without stricter efficiency standards.
But air conditioning itself is a major contributor to global warming. Altogether, building operations that include heating, cooling and lighting account for 28% of the world’s total greenhouse gas emissions. That’s more than the entire global transportation sector.
But SkyCool, Gradient and a number of other companies are working on the problem. They’re trying to apply new technologies to the traditionally inflexible heating and cooling industry, finance the upfront costs, communicate the value to property owners and make sure it’s all done equitably.
Watch the video to learn more.
The U.S. is deciding how to respond to China’s digital yuan
China is beating the U.S. when it comes to innovation in online money, posing challenges to the U.S. dollar’s status as the de facto monetary reserve. Nearly 80 countries — including China and the U.S. — are in the process of developing a CBDC, or Central Bank Digital Currency. It’s a form of money that’s regulated but exists entirely online. China has already launched its digital yuan to more than a million Chinese citizens, while the U.S. is still largely focused on research.
The two groups tasked with this research in the U.S., MIT’s Digital Currency Initiative and the Federal Reserve Bank of Boston, are parsing out what a digital currency might look like for Americans. Privacy is a major concern, so researchers and analysts are observing China’s digital yuan rollout.
“I think that if there is a digital dollar, privacy is going to be a very, very important part of that,” said Neha Narula, director of the Digital Currency Initiative at the MIT Media Lab. “The United States is pretty different than China.”
Another concern is access. According to the Pew Research Center, 7% of Americans say they don’t use the internet. For Black Americans, that rises to 9%, and for Americans over the age of 65, that rises to 25%. Americans with a disability are about three times as likely as those without a disability to say they never go online. That is part of what MIT is researching.
“Most of the work that we’re doing assumes that CBDC will coexist with physical cash and that users will still be able to use physical cash if they want to,” Narula said.
The idea of a CBDC in the U.S. is aimed, in part, at making sure the dollar stays the monetary leader in the world economy.
“The United States should not rest on its current leadership in this area. It should push ahead and develop a clear strategy for how to remain very strong and take advantage of the strength of the dollar,” said Darrell Duffie, professor of finance at Stanford University’s Graduate School of Business.
Others see the digital yuan as insidious.
“The digital yuan is the largest threat to the West that we’ve faced in the last 30, 40 years. It allows China to get their claws into everyone in the West and allows them to export their digital authoritarianism,” said Kyle Bass of Hayman Capital Management.
Watch CNBC’s deep dive video into CDBCs to learn more.
Warren Buffett’s advice from 1999 on how he’d invest $10,000
If you want to be as rich as Warren Buffett, don’t wait to get started. That’s the advice that the investing titan shared in 1999 at Berkshire Hathaway’s annual shareholders meeting when asked how to make $30 billion, which was roughly his net worth at the time.
The then-68-year-old Buffett — whose fortune has since grown to more than $100 billion — said that compound interest is an investor’s best friend and compared building wealth through interest to rolling a snowball down a hill.
“Start early,” Buffett said. “I started building this little snowball at the top of a very long hill. The trick to have a very long hill is either starting very young or living to be very old.”
The Oracle of Omaha said that if he were graduating from college in 1999 and had $10,000 to invest, he would be strategic about choosing where to put his money. “I probably would focus on smaller companies because I would be working with smaller sums and there’s more chance that something is overlooked in that arena,” Buffett explained, saying he would start examining companies alphabetically and work his way from there.
Investors, Buffett explained, need to fend for themselves and rely on their own knowledge and intuition when searching for promising businesses to invest in. He added that savvy investors would do best to “learn what you know and what you don’t” and act “very vigorously” when they see something they consider to be a good opportunity.
“You can’t look around for people to agree with you,” Buffett said of putting money into an investment. “You can’t look around for people to even know what you’re talking about.”
That said, Buffett is also a staunch supporter of index funds, which hold every stock in an index, making them automatically diversified. To build wealth, investors should “consistently buy an S&P 500 low-cost index fund,” Buffett said in 2017. “Keep buying it through thick and thin, and especially through thin.”
Still, Buffett said that aspiring to make $30 billion is unnecessary, and recently said that the size of his fortune is “incomprehensible.”
“The money makes very little difference after a moderate level,” he said.
He continued: “If you asked me to trade away a very significant percentage of my net worth either for some extra years on my life or being able to do during those years what I want to do, I’d do it in a second.”
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