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Weekly News of 25th of July

Virgin Money enters buy now pay later market


Virgin Money will enter the fast-growing ‘buy now pay later’ market, reports Reuters. It joins other mainstream lenders pushing into the lucrative but sometimes controversial business.

Virgin will offer a credit card that allows customers to spread repayments over a number of months, it said, with instalment fees added if they repay in nine months or longer.

‘Buy now pay later’ products have soared in popularity in recent years with customers buying anything from clothes to electronic gadgets, but have attracted criticism from lawmakers and watchdogs over the sometimes high rates of interest charged.


Germany to reduce electric car subsidies in 2023


Germany will reduce financial incentives to buy electric cars next year after an agreement within the governing coalition, as the vehicles’ growing popularity makes government subsidies unnecessary, reports Reuters.

The incentives, or premiums, paid to buyers of electric cars will expire completely once an allocated sum of 3.4 billion euros ($3.44 billion) from the next two years’ budget is spent, according to government sources.

Under the plan, premiums for fully electric-powered vehicles priced below 40,000 euros will fall to 4,500 euros at the beginning of next year from 6,000 euros currently, and fall to 3,000 euros in the following year.

For cars priced over 40,000 euros the premium will drop to 3,000 euros at the start of next year from 5,000 euros currently.

There is no subsidy for the purchase of cars priced over 65,000 euros, and that will apply to vehicles priced at 45,000 euros and more from 2024.

Subsidies for company cars will be eliminated, with only private consumers benefiting from the scheme.

The government will also axe incentives for plug-in hybrid cars at the end of the year – something which the economy minister had advocated due to doubts over the double-engined vehicles’ climate credentials as they are heavier and the battery-powered mode often lasts for only short distances.

Sales of all-electric cars almost doubled to 328,000 in 2021 compared to the previous year, thanks in part to the scheme. There are now over 600,000 electric-powered vehicles on German roads. Including hybrids, there are well over a million.

The share of purely electric cars in new car registrations in Germany recently came in at around 14%.


Portage is seeking to raise up to $1 billion to fund late-stage fintechs


Portage is raising a structured equity fund that will focus on financing late-stage startups in the financial technology sector that are reluctant to take a hit in their valuation amid the market downturn, reports Reuters.

The fintech fund is seeking to raise up to $1 billion for the so-called structured equity fund, investing in securities that combine debt and equity features and do not require startups to lock in a valuation as with traditional equity fundraising, Adam Felesky, co-founder and chief executive officer of Portage, told Reuters in an interview.

“We’re a liquidity provider in environments that otherwise would be quite difficult,” Felesky said.

Reuters previously reported the move.

Startups have been reluctant to launch traditional fundraisings in the financial downturn because they would be forced to accept a lower valuation than their previous funding round.

Valuations of fintech companies have tumbled this year in a broad stock market sell-off. Swedish payments firm Klarna Bank AB dropped 85% in valuation while BNPL rival Affirm Holdings has shed more than 80% of its value.