Fintech Highlights - 9/19/2023
Square experienced an 18-hour outage last week. Deel bans several additional transactions. Embedded fintech Caliza raises a round. Here's what we've been watching this week 👇
Pinned to the Top
Square experienced an 18-hour outage last week, leaving businesses who use the payment processing service unable to log in to their accounts or receive payments.
The outage began around noon Pacific time on Thursday and ended Friday morning, Square said on social media and its website, though the Block subsidiary added that some payments and transfers might be delayed.
Cash App, the Block-owned consumer payments app, also experienced an outage on Thursday and Friday. The payments service first posted about the issue on social media on Thursday morning, Pacific time, later saying that some customers may have been unable to send payments or use their Cash App-branded credit cards. On Friday morning, Cash App said its services were “mostly back online,” but said some unspecified services might be delayed.
Block did not specify the size of the Square or Cash App outages.
The BFD
HR startup Deel expanded its terms of service to ban several additional transactions, effectively curtailing support to the retail trading websites whose practices have recently come into regulatory crosshairs.
The new terms of service specify that Deel won’t do business with firms that engage in activities that “support pyramid or Ponzi schemes, matrix programs, other ‘get rich quick’ schemes.” It also expanded prohibited activities to those related to currency exchange transactions.
At least seven trading firms, including Funded Engineer, Funding Pips, Finotive Funding, The Funded Trader, The 5ers, MyFundedFx and Bespoke Funding, said they could no longer pay traders through Deel. In late August, the Commodity Futures Trading Commission sued the parent of MyForexFunds, which previously Deel to pay its traders, alleging the company was operating a Ponzi scheme.
Deel, which became a $12 billion valuation startup last year thanks to sales of software helping companies recruit and hire remote workers, became the way dozens of websites that call themselves prop or funded trading firms paid customers for successful trades.
Before the pause, Israel-based trading firm The 5ers had been processing thousands of transactions weekly through Deel, CEO Gil Ben-Hur previously told The Information. He had said that the site “worked closely with Deel’s supervisors and development team” on its payment workflow.
M&A
Kin Insurance, the Chicago-based homeowners insurance startup that two years ago canceled a SPAC merger, raised $33m in Series D extension funding at a valuation north of $1b, per Axios Pro. More here ->
Cetera, an El Segundo, Calif.-based portfolio company of Genstar Capital, agreed to buy Avantax , a Dallas-based wealth management software maker, for around $1.2b, or $26 per share in cash. More here ->
Comvest Partners reinvested in existing portfolio company ClearOne, a Baltimore-based debt resolution services provider. More here ->
Capgemini agreed to acquire the financial crime compliance unit of Exiger, a New York-based portfolio company of Carrick Capital Partners. More here ->
Arax Investment Partners, a wealth management platform backed by RedBird Capital Partners, acquired Scottsdale, Ariz.-based financial advisory Ashton Thomas. More here ->
Citi is spinning out Bridge, an SMB lending startup incubated within the bank, per Axios Pro. More here ->
Optimal Blue, a Plano-based an online mortgage marketplace platform, was acquired by Constellation Software for $700M. The company was previously acquired by Compass Analytics, Cannae Holdings and Thomas H. Lee Partners for $1.8B in 2021 More here ->
Markerstudy, a British insurer backed by Pollen Street Capital, is paying £1.2b to buy household and vehicle insurer Atlanta Group from London's Ardonagh Group, whose backers include Madison Dearborn Partners, HPS Investment Partners and ADIA. More here ->
Embedded Fintech
Caliza, a Brazilian embedded finance startup, raised $5.3m in seed funding. Caliza’s platform allows banks and fintech companies to embed its application programming interface infrastructure to offer their customers the ability to save and transact in U.S. dollars, regardless of their location. More here ->
Swan, a French embedded payments startup, raised $40m in Series B funding. Via Swan's simple APIs, European companies can integrate banking services (accounts, cards, and payments) quickly and easily into their own product. More here ->
Nigerian embedded finance platform Anchor raised $2.4M to expand product offerings. Its proposition: provide APIs, dashboards, and tools to assist developers in embedding and building banking solutions. Anchor is one of a few BaaS providers in the Nigerian market; it competes in a crowded fintech space that includes JUMO, Maplerad, OnePipe and Bloc. More here ->
Fintech
CertifID, an Austin, Texas-based startup that products against wire fraud in real estate transactions, raised $20m. CertifID primarily develops products to fight wire fraud. The startup’s co-founder, Thomas Cronkright, launched the company in 2017 after losing $180,000 to fraud at his real estate title agency in Grand Rapids, Michigan. More here ->
Alix, a Los Gatos, Calif.-based estate settlement automation tool, raised $5.5m in seed funding. Alix, described as “the world’s first seamless wealth transfer platform”, is stepping forward to reshape the manner in which global asset transitions are managed. More here ->
Perfios, an Indian B2B credit decisioning startup, raised $229m in Series D primary and secondary funding. The company extracst, categorizes, and analyzes thousands of data-types in real-time, helping financial institutions take lending decisions in stringent privacy & compliance environments. More here ->
Parallax, a Philippines-based cross-border payments startup, raised $4.5m in seed funding. Parallax wants to make the process faster and cheaper with a cross-borderpayments system that can be used for stablecoin, crypto or traditional currencies. More here ->
N5, a Buenos Aires-based analytics platform for the banking sector, raised $9.5m. The N5 Now platform integrates on the back end channels, processes and systems that are usually otherwise siloed, such as CRMs, BPMs, incentives, and Omnichannel. This helps financial institutions improve productivity, the customer experience and cost-effectiveness. More here ->
Fintech startup Tofu launched with a new invoicing, tax, and payment management platform, already surpassing 1M app installs. More here ->
Syscap closed on $2.3M to create private credit infrastructure in Mexico. With Syscap customers can register their private lines of credit and perform communication, monitoring and reporting functions all in one place. More here ->
Zopa, the UK neobank, hits 1M customers and raised another $93M. The company launched two new products this year — a BNPL service and a long-term savings account popular in the U.K. called an ISA. More here ->
ThetaRay has nabbeds $57M for AI tools to fight money laundering. The company has built an AI-based anti-money-laundering (AML) platform that automatically scans and identifies illicit transaction activity at banks and other financial institutions, has picked up $57 million. More here ->
Investtech
Treasury4, a Spokane, Wash.-based treasury analytics platform, raised $20m in Series A funding. Treasury4 is an enterprise fintech creating advanced data analytics tools and solutions for corporate finance and treasury professionals. More here ->
Moment, a bond trading platform, raised $17m in Series A funding led by Andreessen Horowitz. More here ->
Crypto
Nestcoin has rasied $1.9M to scale its Onboard product. Onboard is a noncustodial wallet. It competes with global services like MetaMask and Trust Wallet and domestic services like Ejara. These self-custody wallets let users securely store and protect cryptocurrencies, digital assets, and tokens. More here ->
Embedded Insuretech
Cover Genius has partnered with Spirit Airlines to launch personalised embedded protection for international travellers, backed by a speedy claims process, for the first time. More here ->
Insuretech
OpenCover, a decentralized insurance startup, raised $4m in seed funding co-led by NFX and Jump Crypto. More here ->
Delos Insurance Solutions, an SF-based home insurer focused on wildfire protection, raised $7.3m in seed extension funding. Delos leverages new data and machine learning to create more accurate catastrophe underwriting risk models, enabling Delos to offer competitive pricing in high-risk regions. More here ->
From The Stash
The Kids Are Interested in Investing - A new report from Fidelity says investing is on teenagers’ minds, but only one in four has started trying to invest because they think they are too young. With apps like Bloom, Copper and Step simplifying how investing works for teens and Gen Z, it’s not a surprise that bigger financial players, including Fidelity, want in. More here ->
Fifth Third updates chatbot for fluency - Fifth Third Bank looked to ChatGPT to update its chatbot’s natural language understanding model in order to keep up with growing adoption and advanced customer inquiries. Fifth Third’s chatbot, Jeanie, facilitates around 200,000 conversations per month, and with the update is now able to understand 30,000 customer phrases, up from 250 phrases six months ago More here ->
What FI execs are saying about ChatGPT - Executives at financial institutions are looking into ChatGPT to unleash a new era of innovation, education and customer experience. While many FIs, like Fifth Third Bank are using ChatGPT to improve the efficiency of their chatbots, others, like DNB, are exploring generative AI to increase operational efficiency. Financial institution executives discussed the potential. More here ->
70% of Wells Fargo’s client interactions are digital - Nearly 70% of Wells Fargo’s interactions with its customers are digital as it continues to invest and improve its digital banking channels, Jazz Samra, head of partnerships at the $1.9 trillion bank, said at Finovate Fall 2023. Wells Fargo is pivoting its digital strategy away from cross-selling to prioritizing customer experience. More here ->
Banks look to tech as they slash jobs - Barclays, CitiGroup, Truist Financial and Santander announced layoffs this week as they look to cut costs and gain efficiencies. Truist is making “sizable reductions” to its workforce in the coming months to save $300 million in costs, the bank announced at the Barclays Financial Services Conference Monday More here ->
Citizens to debut digital assistant on mobile app next quarter - Citizens Bank will launch a virtual assistant, Digital Butler, on its commercial banking app in the next quarter, Jo Wyper, executive vice president of commercial digital operations at Citizens Bank, told Bank Automation News at Finovate Fall 2023. More here ->
Reports / Webinars
Discover the Fintech Stage at Disrupt 2023 - Check out the Fintech Stage at TechCrunch Disrupt 2023, taking place in San Francisco on September 19–21, where we cover web3, banking, and more. Last-minute passes are still available. Save 15% with code INTERCHANGE.
The bank branch isn’t dead — it’s evolving - On the heels of a tumultuous spring that saw three of the four largest bank failures in U.S. history — Silicon Valley Bank and Signature Bank went under in March, followed by First Republic in May — many customers of smaller institutions quickly moved their deposits to “too big to fail” banks
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