Despite the global Covid-19 crisis dragging the cross-border payments market down, the first months of 2020 have seen the completion of some successful funding rounds, after a break from the major raises seen in early 2019.

What do these funding boosts mean for the cross-border players and the sector as a whole?

Our main takeaways are:

1. Revolut reached a record valuation
   With the $500m raised in February, Revolut reached a valuation of $5.5bn, becoming one of the most valuable fintechs in Europe. Having started with a card product and expanded from there, Revolut has now launched not-inexpensive pushes into both the US and the corporate market.
   
2. Growing through new products and capabilities
   We can see a consistency in the use of the proceeds: financing geographic expansion (often into the US market) and enlarging and improving the current product offering (e.g. Remitly’s Passbook or Airwallex’s payment infrastructure).
3. More funds to weather the current crisis
   Many of the neobanks rely on revenue from interchange fees, which is mostly driven by travel. This revenue has dropped off a cliff. Players like Revolut are in a much better place than rivals such as Monzo to weather this storm, the latter having had to close offices and furlough staff.

While fundraising overall will continue to decline in the coming months, the leading companies with traction should still be able to close rounds. And in the consumer-focused end of the market, are we seeing a new baseline of funds needed to compete on a global scale, with c.$400m allowing companies to get a seat at the table?