Bloom Money secures £1 million despite the decline in global fintech funding

Bloom Money, a UK-based fintech startup that offers financial services to immigrants, has raised £1 million in its pre-seed funding round. The round was led by Zinal Growth with Pact VC, June Angelides, Berenice Magistretti, and January Ventures participating.

Meanwhile, the latest KPMG’s Pulse of Fintech report showed total funding in the global fintech market dropped $63.2 billion in the first half of 2022 to $52.4 billion in the first six months of 2023. Notably, Europe bore the biggest brunt.

Bloom Money’s funding round

Bloom Money’s goal is to digitize the informal financial management system commonly referred to as ROSCA (rotating savings and credit association). Overall, this model entails members of a particular community coming together to collect and save funds that the members can then withdraw. The need for such an informal model emerges from the discrimination that minority groups often experience in the conventional banking system.

Based on these principles, Bloom Money helps its users form Bloom Clubs made up of up to 10 individuals. The members can use the app to make regular payments direct from their bank accounts. This also includes automatic payouts.

In a post on LinkedIn, the startup’s CEO Nina Mohanty stated, “We are digitising the analog, giving credit where it’s due, and honouring the complex and beautiful experience of being part of a diaspora - by modernising tradition”.

Bloom Money’s pre-seed funding round comes at a time when uncertainty continues to impact the global fintech market. High inflation, coupled with interest rate hikes and devaluation of major companies within the tech sector have been key drivers.

Fintech funding in Europe, Middle East, and Africa (EMEA) region dropped by over 50% to $11.2 billion in H1 2023 compared to a similar period in the previous year. In comparison, fintech investments in the UK fell from $13.8 billion in H1 2022 to $5.9 billion in H1 2023. However, the US saw a rise in fintech funding during the aforementioned period from $28.9 billion to $36.1 billion.

Even with the identified headwinds, subsectors like payments, wealthtech, and insurtech still have a strong business case. As such, funding for related firms will likely rebound in the foreseeable future as the macroeconomic environment stabilizes. Granted, it may not reach to the record high hit in 2021.