The co-founder and CEO of Weavr has said the embedded finance company isn’t competing directly with banking as a service firms and instead plans to “increase the size of the cake”.
Weavr CEO Alex Mifsud told UKTN: “We’re not suggesting that we are going to go and eat the lunch of the bank as a service crowd, we are going to increase the size of the cake – to make the embedded finance concept available to many more industries.”
London-based Weavr provides plug-and-play embedded finance software, which lets non-financial businesses integrate off-the-shelf financial tools onto their existing applications.
These include services such as bank transfers, contactless payments and card issuing, which are integrated through the use of APIs.
It means that non-financial companies don’t have to build these tools from scratch, and tailor them to meet the regulatory demands of the regions they operate in.
Banking as a service – also known as BaaS – is closely related to embedded finance.
However, the key difference is it involves a provider creating white-label banking services for a non-financial business, usually connecting to a bank system via APIs and webhooks.
It’s a market forecasted to be valued at $12.2bn (£9.3bn) by 2031, while the embedded finance market is predicted to be worth $138bn in 2026.
Founded in 2018 by Mifsud and Adrian Mizzi, Weavr has raised more than $54m (£42m) in funding. Its most recent round came last month, with a £29.5m Series A round.
Mifsud said that Weavr’s biggest challenge is finding engineering talent, a problem shared by many tech companies. According to a Tech Nation report, “the number of advertised tech jobs in H1 2021 is 42% higher than pre-pandemic levels”.
Further on the horizon, the Weavr CEO said he believes embedded finance faces looming questions from regulators as it is adopted at scale.
When this happens, Mifsud said, regulators and financial institutions will need to ensure they fully understand the concept of embedded finance.
Despite this, Mifsud said Weavr has seen an increase in the understanding of embedded finance, with the rapid digital disruption during the pandemic a key catalyst.
“What happened in the pandemic was a huge rush into digitalisation, and therefore, we now expect a digital-first experience,” Mifsud said. “That’s what I think has been an important trigger for this move to embedded finance.”
Weavr is open to crypto payment tools
Weavr is creating embedded finance tools for the exchange of fiat currency. However, Mifsud said that Weavr is open to cryptocurrency payments in the future.
The company already offers a crypto point of service solution, with the software already in use for companies that need to provide just in time liquidity for customers.
“Ultimately, we’re trying to do a job, help customers collect money, split money, insure it and save it,” said Mifsud. “Today we use card base rails and bank base rails – tomorrow we’ll use a combination of all three.”
Going forward, Weavr is open to raising more funding to fuel its infrastructure growth.
Mifsud said: “We’re building infrastructure, and infrastructure is always about you spend first, you build, you get customers and then make money. So, the speed of the building matters a lot. Do we want it to take 10 years to build a global platform or three years?”
Mifsud is open to Weavr either being acquired or an IPO. The company is also looking to launch in the US this year.
Previously Mifsud was a co-founder of Entropay, launching the first consumer virtual prepaid card in Europe and founder of B2B payments technology platform Ixaris.
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