Fintech Highlights - 9/12/2023

Robinhood buys back shares from FTX. Frontier Risk Group backs the cannabis industry. Firstcard raises a round. Here's what we've been watching this week 👇

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Pinned to the Top

Robinhood said on last week it paid $606 million to buy back a 7% stake in the company that the U.S. government had seized from former FTX CEO Sam Bankman-Fried.

A Bankman-Fried-controlled entity called Emergent Fidelity Technologies had purchased more than 55 million Robinhood shares for nearly $650 million in May 2022, six months before FTX collapsed. Robinhood, Bankman-Fried and bankrupt crypto lending firm BlockFi, which had said Emergent used the shares as collateral, all had sought to gain control of the stake.

U.S. prosecutors moved to sell the stake to Robinhood under seal in mid-August for $10.96 a share, and the deal closed on Thursday. Robinhood’s stock price rose 3.5% in Friday trading to $11.27.

The BFD

Frontier Risk Group, a commercial insurance startup focused on the cannabis industry, has raised $3.1 million in seed funding led by Casa Verde Capital.

Why it's the BFD: This comes just as we learned that HHS officials recommended that the DEA move marijuana to a lower-risk category under the Controlled Substances Act, which could be a massive boon for the cannabis market.

Details: Frontier Risk has agreements with reinsurers, many of whom don't understand or directly service cannabis, and argues that stringent regulations on cannabis growers means they have less intrinsic risk than do their agricultural peers.

Other investors include Euclid VC, Inter-Atlantic Capital Group and lawyer Bruce Macfarlane.

The bottom line: "This historic recommendation is the best news for the cannabis industry in 70 years, but this isn't a done deal, as the DEA has to accept this recommendation before we see federal rescheduling actually happen. Rescheduling will remove some financial burdens, unfairly placed on the cannabis industry, naturally freeing-up capital so companies can focus on streamlining, innovating and continuing to grow the industry." — James Whitcomb, Frontier Risk CEO and former CEO of cannabis brand Parallel

M&A

Tradeweb (Nasdaq: TW) completed its acquisition of Australian derivatives trading platform Yieldbroker for A$125m in cash.  More here ->

Barclays (LSE: BARC) is seeking a buyer for its U.K. payments unit, which could fetch around $2.5b, per Reuters. More here ->

Pepper Money (ASX: PPM) agreed to acquire HSBC's NZ$1.4 billion mortgage portfolio in New Zealand.  More here ->

JPMorgan increases stake in Brazilian digital bank C6 to 46% - More here ->

Fintech

Firstcard, a Menlo Park, Calif.-based provider of financial products to college students, raised $4.7m in seed funding. The company offers no annual fees, "worry-free" data protection, and instant cashback at campus businesses. More here ->

ThetaRay, an Israeli anti-money laundering startup, raised $57m. The company offers AI-powered transaction monitoring for anti-money laundering (AML) provides fintechs, banks, and regulators advanced tools to ensure trust in domestic and cross-border payments. More here ->

Anchor, a Nigerian banking-as-a-service startup, raised $2.4m in seed funding. Anchor provides APIs, dashboard and tools that help developers easily embed and build banking products. This includes APIs for creating bank accounts, funds transfers, savings products, issuing cards and offering loans. More here ->

MyZoi, a UAE-based financial services startup for migrant workers, raised $14m. myZoi is a fintech focused on financial inclusion and financial literacy for the underbanked. It recently obtained two regulatory licences from the Central Bank of the UAE.  More here ->

Strise, a Nordic anti-money laundering startup, raised $10.8m in Series A funding. Strise offers fast-growing banks and fintechs a smart system to automate KYC processes, drive better performance, and quickly operationalise regulatory changes to comply with modern Anti-MoneyLaundering (AML) standards.  More here ->

Treyd, a Swiss trade finance and contract platform, raised €9m in Series A extension funding.  Treyd is one of SaveLends' partner lending companies that offer SaveLends' investors the opportunity to invest in import financing loans. More here ->

Kotani Pay, a Nairobi-based crypto payments startup focused on remittances, raised $2m in pre-seed funding. Kotani Pay is a technology stack that enables blockchain protocols, dapps, and blockchain fintech companies to integrate seamlessly to local payment channels providing them with a reliable on ramp and off ramp services. More here ->

Syscap, a Mexican private credit platform, raised $2.3m in seed funding. The company allows Mexico’s non-banking lenders to manage and access private credit.  More here ->

Insuretech

 Akur8, the trailblazing insurance pricing solution powered by Transparent AI, has successfully concluded a new funding round, securing an impressive $25 million in investment.  More here ->

Clara Analytics, a Santa Clara, Calif.-based provider of insurance claims optimization solutions, raise $24m in Series C funding. Clara's customers include companies from the top 25 global insurance carriers to large third-party administrators and self-insured organizations.  More here ->

Proptech

Agave, an API for construction industry software, raised $2.9m in seed funding. One of Agave’s customers is Beam Payments, which uses its API to read invoices from accounting systems, and then registers payments against them after they have been processed through the software. More here ->

From the Stash

Newfront, the tech-driven insurance brokerage firm based in San Francisco, has introduced a powerful Total Rewards dashboard - More here ->

Prudential Plc’s New CEO Unveils Ambitious Growth Plan with Focus on Asia - Insurance behemoth Prudential has set its sights on a significant expansion strategy, bolstered by ambitious growth and dividend objectives, spearheaded by the firm's newly-appointed chief executive, Anil Wadhwani. More here ->

The 54 most promising fintechs to watch - More here ->

Fed warned Goldman’s fintech unit on risk, compliance oversight - More here ->

From Jason Mikula - The smallest bank in Tennessee, renamed Lineage Bank, grew an astonishing 790% in two years, powered by cheap deposits gathered via BaaS platforms Synapse and Synctera. More here ->

DNB’s chatbot has 83% accuracy rate - DNB’s internal chatbot fielded more than 2.1 million queries last year and boasts an 83% accuracy rate.  Juno, the chatbot launched in March 2020, “knows how to answer around 3,500 questions and he can also answer them in seven different ways, depending on what kind of adviser is asking the question." More here ->

Incumbent banks, meet investment products - Head of Product for 11:FS Pulse, Joe, wanted to get some stuff off his chest about the huge opportunity for banks when it comes to embedding investment products into their platforms. More here ->

Reports

11FS - Building the future of homebuying

Mortgages are typically the largest purchase any of us will make in our lifetime. So why does the homebuying problem remain unsolved?

Get the report - here ->

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