This article was originally posted as a part of Helsinki Fintech Guide 2021 on June 23rd, 2021. You can download the full publication over here.
In March 2021 Tencent, the Chinese tech giant, invested five million euros in the Finnish fintech Enfuce, an innovator in payments technology. Maki.vc, already an investor, added another two million euros bringing the total amount raised to seven million euros.
Enfuce – A leader in cloud-based payment service
Established in 2016, Enfuce currently employs over 70 people and has close to 10 million end users on its platform. The firm last received 5 million euros of equity funding in November 2019 upon the release of its carbon tracking app.
Enfuce’s primary business is “Card as a Service,” a turnkey package to launch branded payment solutions including card issuance and mobile wallets. Cards are issued by Enfuce and Enfuce handles all back office support functions. The customer can then concentrate all their energies on their own business and end-user experience. It is aimed primarily at fintech start-ups currently but the service naturally suits the needs of many businesses, loyalty programs, and financial institutions.
Enfuce was first-to-market offering cloud-based payment services running on Amazon Web Services, greatly simplifying the process of scaling up customer volume and shortening time to market. At the beginning of June 2021, Enfuce launched a partnership with VISA to enable launching a card offering in just eight weeks.
Monika Liikamaa, co-founder & CEO at Enfuce stresses that data processing is actually more important to their business than payment processing in itself; “Our core business is to store and process sensitive data.” The best example of this is “My Carbon Action” a CO2 calculator that helps card users understand and control their own carbon footprint based on their card use.
Compliance as a service
Last year, the European market was shaken by the collapse of German payments processor Wirecard AG, the largest fintech on the continent. Accounting irregularities led to its insolvency in June 2020.
This left its customers scrambling to find new processors, such as Enfuce. However, according to Monika, the greater impact was different;
The regulators have become stricter” and since “Enfuce was born out of compliance, of course it is good for us and I think it’s good also for the customers because in the end of the day when we talk about payments we talk about people’s money so of course we want them to be safe and secure and processed by entities that behave in a compliant and legal manner.
Indeed, Enfuce could well be called a regtech company; “Card as a Service” in itself already includes full coverage of all payment-related regulatory issues, such as know-your-customer, anti money laundering and licensing. Enfuce also offers separate compliance services
to banks and financial institutions, particularly in the fast-evolving open banking environment.
Diversity & inclusion – key to better services
Enfuce is led by two women, Monika Liikamaa and Denise Johansson, its COO and co-founder. Both had long careers in finance and banking before they decided to strike out on their own. Indeed, they had been colleagues at several jobs.
This can be seen as a meaningful advance in diversity for a sector where male engineers far outnumber their female counterparts.
Of course I’m happy about it because I believe in role models, says Monika.
She stresses that diversity and inclusion are not only core values but also the key to better services;
If we were all the same type of homogeneous company with the same type of engineers, we would only see things in one way.”
Doctor Ling Ge joins board as investors converge
Enfuce met with over a hundred investors during its last funding round, then narrowed it down to nine.
We really wanted to have people with the same mindset so it is not just about money but about bringing value to the table, says Monika.
After both Monika and Denise met with doctor Ling Ge, Tencent’s Chief European Representative,
we chose to partner up with them because we really saw what their mindset and their ambitions are and that they put their money where their mouth is … They are as big as you can be but still the sustainability aspect is really important for them.
Ling Ge, a Doctor in Quantum Computing from Oxford University is now a board member of Enfuce. According to Tencent, she joined the Board of Enfuce “because she believes the company can make a positive impact on the global payment industry in the coming years.”
After Tencent’s investment was announced, Monika was surprised by the response from the investor community;
The amount of other big investors contacting us was a bit overwhelming … I hadn’t had time to reflect on this form of fear – of missing out.
Tencent`s backing opens doors to further growth
Tencent is best known for its WeChat app, an all-in-one “lifestyle supermarket” that is extremely popular in China. WeChat is also Tencent’s mobile payments platform there.
Tencent has previously invested in several Finnish tech companies; It has been a shareholder in Supercell, the game company, since 2016 and held the majority since 2019. Last year Tencent bought a minority stake in Finnish IQM, a quantum computing enterprise.
There’s some great innovation going on in fintech in Finland, it’s a very dynamic and interesting market, Tencent said.
They invested in Enfuce because they were seeing “a fast-growing company with a global customer base spanning 16 countries … a unique combination of card issuing and value-adding, as well as Enfuce’s potential to bring more speed to payment technologies and the positive impact it can make on the environment through its carbon footprint calculator.”
From Monika’ perspective;
We enable payments both through open banking but especially through the Visa and Mastercard networks, and we can also do UnionPay, JCB, Discover et cetera, so we are complementary. And of course we have a lot of other services that could be of interest if we think from a WeChat group perspective.
Monika is very satisfied with how Tencent’s involvement is playing out;
When a giant investor who is known for doing awesome investments invests in a company still in the scale-up phase as we are, it gives us good visibility.” And “of course when you have Tencent as an investor it opens up a lot of doors … the contact networks to the people that decide are on a totally different level than I ever could imagine … I’m grateful for it in so many ways.