Weekly update #96

The latest news from Fintech and VC ecosystems

Sep 01, 2025

Welcome to this edition of the weekly newsletter. The idea behind this is to gather all the information in the startup ecosystem in one place, with a special focus on the fintech market and the VC industry.

No episode of Builders this week, the podcast will take a very well earned pause in August and come back in September for Season 3. In the meanwhile you can always recover the first 2 Seasons here on YouTube, or here on Spotify.

Let me know who would you like to see as a guest and get in touch with me if you think you could be a good fit!

Also, I will be speaking at Money20/20 Middle East, 15-17th September in Riyadh! I will moderate a panel about profitability vs growth in fintech investing, happy to catch up if you are joining the event!

Coming back to us, I was reading a very interesting report this week, the “AI-first companies win the future: move fast, scale smart” from Boston Consulting Group (BCG) . The study is a very comprehensive analysis of how CEOs see AI impacting operations and fundamentals in many verticals out there. Here my main takeaways:

Computational power in artificial intelligence has advanced rapidly, evolving from early expert systems with minimal parameters to machine learning, deep learning, and ultimately large-scale foundation models. GPT-3, with 175 billion parameters, marked a turning point by enabling generative and multimodal capabilities, while GPT-4 scaled further to 2 trillion parameters, reinforcing the dominance of transfer learning and large pretrained networks.

Alongside this expansion in capability, token costs for model inputs and outputs have decreased significantly over time. From the high costs of early GPT-4 versions in 2023, efficiency improvements have driven costs down with models like GPT-4o, GPT-4-turbo, Qwen, and DeepSeek R1. The overall trend combines exponential growth in computational scale with steadily improving economic accessibility.

AI-first companies show a structural shift in cost allocation compared to legacy models, with efficiency gains unlocking 5–10% of value. In retail banking, AI adoption reduces costs across front, middle, and control functions, while significantly increasing technology spend to 35–45% of the cost base.

In consumer packaged goods, AI streamlines marketing, sales, and people-related expenses, while keeping COGS largely unchanged, and raises technology and SG&A costs to 7–12%. The overall impact highlights how AI integration redistributes operating costs, prioritizing technology investment and automation, while freeing resources that can be redirected toward value creation.

AI impacts performance differently depending on task type. For repetitive and structured tasks, low performers experience the greatest productivity boost, helping close the gap with high performers. In contrast, for complex and judgment-based tasks, high performers capture the most benefit, further widening the performance gap. This dynamic highlights AI’s dual role: as an equalizer for routine activities while simultaneously amplifying advantages for top talent in tasks requiring higher-level decision-making.

AI-first firms benefit from a dual dynamic of falling costs and rising revenue potential. Traditional high-value task delivery, such as research by highly skilled employees costing over $100K annually, can now be executed by AI agents for only $2–3K per year. Similarly, advisory interactions that once cost around $5 in person have dropped to $0.20–$0.30 with AI-enabled advisory.

Time-intensive market analysis, previously requiring three hours, is now reduced to just five minutes through rapid AI-driven data synthesis. These efficiency gains translate into a significant revenue uplift: AI-first firms generate 25–35 times more revenue per employee compared to traditional firms, far surpassing even digitally enhanced companies.

Anyway we saw a lot of interesting news this week. Klarna revives its IPO ambitions, looking to go public as early as September, Visa shut down US open banking operations, and Airwallex partners with Pipe to finance SMEs. A lot of focus in the US, with Revolut offering free rides on the subway in NYC, Bitpanda ruling out the UK for the US for a potential IPO and Zip eyes the Nasdaq for US dual listing. But also, Gusto acquiring Guideline, Mastercard sponsoring the F1 and Nubank looking for acquisition targets. In the VC industry, we saw Lakestar closing a $265 million continuation fund, OKX launching a $100 million fund and Spintop Ventures expanding in the Nordics. And finally, some very interesting funding round from fintech startups like M0, Rain, Kira, Verdata, Pintarnya, Cashku, Send Payments and many others.

But let's take a closer look at the main news of the last seven days.

A special look in the Italian market

And here some useful resources for everyone involved in the ecosystem:

Events you don’t want to miss

Money 20/20 - Riyadh | 15-17.09.2025 (link to event)
Italian Tech Week - Turin | 1-3.10.2025 (link to event)

You have a cool event you want to mention or to sponsor? Feel free to send me a DM.

Startups raising funds

Loyyal - Loyalty platform from the MENA region, with entities in the US and South East Asia, provides a B2B2C platform to handle multiple loyalty programs and earn rewards all over the world. Raising a $6M Series A
Freedhome - Proptech and fintech platform, enabling people to be able to gain profit from real estate by renting them to intermediaries. Raising a $1M seed round

Weagle - B2B Tech startup that provides the very first browser designed for company, with total security for sensitive data. Raising $6 millions for their seed round.

Shoppy Code:Gift card platform that offers a points based loyalty program. They share part of the profits coming from marketing budgets with their customers. Raising $500k.

Take also a look at the last edition of the newsletter, Weekly update #95

Weekly update on Fintech by Michele Mattei

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