Fintech Highlights - 8/15/2023
FTC won't block the sale of Black Knight. Yieldstreet aims to buy Cadre. Chargeflow raises a round. Here's what we've been watching this week….👇
Pinned to the Top
It might have been just a flesh wound after all.
Driving the news: The Federal Trade Commission has withdrawn an antitrust lawsuit that sought to block Intercontinental Exchange, owner of the New York Stock Exchange, from buying home mortgage software provider Black Knight.
Why it matters: FTC chair Lina Khan has regularly sought court over compromise, but might be changing her tactics after a series of legal losses.
Backstory: ICE, the Atlanta-based owner of the New York Stock Exchange, agreed in May 2022 to pay $13.1 billion, or $85 per share, for Jacksonville, Florida-based Black Knight.
- The FTC sued the following March, arguing that the proposed merger would "drive up costs, reduce innovation, and reduce lenders' choices for tools necessary to generate and service mortgages."
- At the time, ICE already already had agreed to sell Black Knight's Empower loan origination business, but the FTC didn't find that divestiture sufficient. ICE and Black Knight also reduced the deal value to around $11.7 billion, or $75 per share.
- Then, last month, ICE also agreed to sell Black Knight's Optimal Blue product pricing and eligibility engine for $700 million.
- The buyer for both assets is Canada's Constellation Software, with the deals contingent on ICE completing its Black Knight deal.
Caveat: The two sides continue to negotiate, despite the FTC dropping its lawsuit, and the detente could dissipate if a final agreement isn't reached by Aug. 25.
The BFD
Asset manager Yieldstreet is near a deal to buy Cadre, a once-promising real estate investment firm whose value has fallen sharply in recent years, said people familiar with the situation.
Why this is the BFD: If the two sides finalize an agreement, it would be the latest sign that mergers and acquisitions activity among troubled startups is beginning to pick up as founders accept that valuations are not likely to recover.
What happens next: Cadre shareholders are expected to get stock in Yieldstreet. The valuation of Cadre could be around $100 million, one person close to the situation estimated, which would be a sharp discount from Cadre’s peak valuation of $800 million set six years ago.
M&A
RentRedi, a New York-based provider of property management software for landlords, acquired both eRentPaymentand PaymentReport. RentRedi's VC backers include K1 Investment Management led, and was joined by TIA ventures, Tribecca Early Stage Partners and RiverPark Ventures. More here->
KKR acquired a $373m portfolio of prime auto loans from Synovus Bank (NYSE: SNV). More here->
LoanPro, a Farmington, Conn.-based portfolio company of FTV Capital, acquired a minority stake in TrueNorth, a New York-based financial services digitization company backed by SaxeCap. More here->
Fintech
IVIX, a New York-based platform for governments to find financial crimes and tax evasion, raised $12.5m in Series A funding. The platform is "designed for tax authorities to increase audit efficiency and tax revenue" and "IVIX technology transforms publicly available business activity data into highly accurate leads." More here ->
Chargeflow, an anti-chargeback fraud startup, raised $11m in seed funding. The company's platform taps machine learning to generate custom “dispute evidence” — e.g. delivery confirmation receipts, signed orders and so on — for each chargeback and automatically submit it to the corresponding bank or credit card company. More here->
GlossGenius raises $28M to expand its bookings and payments platform for beauty businesses. Businesses can use the platform to manage workflows across their back and front offices, including flows related to payments, booking, inventory expenses and marketing. More here ->
Grounded Technologies, a deposit ‘marketplace’ has launched with backing from BMO. The company operates what it calls a core deposit, loan, and Community Reinvestment Act marketplace. More here ->
Rightfoot, an SF-based data connectivity startup for financial services, raised $15m in Series A funding. Rightfoot provides secure connectivity to millions of business and personal accounts, without requiring a log-in. More here->
Allo, a new financial app that can be described as Headspace for personal finance, is aiming to help users meaningfully engage with their finances without becoming overwhelmed with numbers and spending. The idea behind Allo is to help users create a mindful money practice that allows them to approach their earnings, spending, saving, investing and giving with a sense of fulfillment.” More here->
40Seas, an Israeli cross-border payment startup, raised $6m in additional seed funding. 40Seas operates at the intersection of B2B commerce and fintech to offer a digital financing framework for SMEs involved in cross-border trade. The solution is available as an API or standalone platform and helps ecosystem players bridge the gap between exporters who require advance payment and importers who want to pay for goods only after they've been sold. More here->
Credgenics, an Indian debt collection software startup, raised $50m at a $340m valuation. Its software-as-a-service (SaaS) platform offers a comprehensive suite of debt resolution solutions including digital collections, debt analytics, litigation management, and a collection mobile app, powered by AI-driven intelligent automation and machine learning models, to redefine how institutions manage debt collections. More here->
Moove, an African mobility fintech that provides vehicle financing to drivers of ride-hailing platforms like Uber and other gig networks, has raised $76 million in new funding. More here->
Investtech
Endowus, a Singaporean wealth management startup, raised $25.6m. One of the main ways Endowus differentiates is being what it says is the only digital wealth platform that serves both private wealth and public pension as the first digital advisor for Singapore’s Central Provident Fund Investment Scheme (CPF). More here->
Insuretech
Jerry’s AI-powered revolution in car insurance accelerates with $110M raise. More here->
What do caregiving and divorce have in common? Financial stress for employees. Helpful has raised $7.5 million. The new app brings together insurance benefits, medical records and caregiving resources into one dashboard. More here ->
From the Stash
Visa’s new head of fintech talks partnerships, venture and creators as an addressable market - The relationship between fintechs and incumbents has long been fraught with tension. But Marie-Elise Droga believes it doesn’t have to be this way. Droga joined payments giant Visa as SVP, head of global and NA fintech partnerships in December 2022 to lead the development, commercialization and implementation of all Visa products, new payment flow solutions and “value-added” services for Visa’s fintech partner network. More here ->
The downturn is really hitting seed startups now - It increasingly looks like the startup ecosystem is undergoing a top-to-bottom reset, from seed- through late-stage startups and all the way to the investors that back them. All funding stages — seed, early and late — in July 2023 were down about a third compared to a year ago. More here ->
Fiserv rewards points available on Amazon - E-commerce giant Amazon and global payments provider Fiserv have teamed up to offer reward points for Amazon web and mobile app shoppers last month. The program allows Amazon customers to link debit and credit cards from 200 financial institutions to their Amazon accounts to collect and redeem points on Amazon, according to Fiserv. More here ->
IBM automates AI model training for banks with watsonx - IBM has automated the training model process to allow enterprise clients, including financial institutions, to use generative AI in a safe and compliant way that can be implemented and scaled quickly. “Conventional machine learnings, as good as they are, take a huge amount of time. They take a huge amount of discipline and science,” More here ->
Webinar / Reports
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Global ideas for better banking AI.
Registration is now live for the upcoming Bank Automation News webinar Global Ideas for Better Banking AI, set for Thursday, Sept. 14, at 11 a.m. ET. The webinar will focus on how financial institutions are approaching AI, open- and closed-source solutions and regulatory considerations
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