Fintech Highlights - 4/18/2023
Home insurance rates are skyrocketing. Tech employees are finding options for secondary's. Acorns grabs GoHenry. Here's what we're watching this week 👇
Pinned to the Top
Apple launched a high-interest savings account Monday where Apple Card users can hold their cash-back rewards and deposit additional funds, the latest move to expand its card business with Goldman Sachs.
Apple Card users now have the option to use a savings account at Goldman that offers an annual percentage yield of 4.15%. If they set one up, the card’s “Daily Cash” rewards will automatically slip into that account.
Goldman and Apple forged their card partnership in 2019 as part of the bank’s push into consumer finance and the tech giant’s way into banking. When Goldman decided to scrap most of its consumer ambitions last year, some questioned the bank’s commitment to the partnership, even though it wasn’t part of what Goldman was downsizing.
Although Goldman pays a lot for consumer deposits relative to traditional banks, it is inexpensive relative to other funding sources at hand. Deposits are usually the cheapest way banks get funding, and as mostly a Wall Street bank, Goldman largely lacks them.
Apple and Goldman also benefit from rafts of data on consumer spending from the card, which advertises no fees and an Apple cool factor. (The card is silver and made of titanium, evoking the high-end “black cards” that wealthy American Express customers use.)
Still, Goldman’s consumer customers’ credit quality has been sliding – the firm had to boost its provision for losses sharply last year, to $2.7 billion from $357 million the year before, because of potential credit losses.
The BFD
A trio of banking giants held their first checkups since the crisis — and the prognosis is a picture of health.
The big picture: JPMorgan, Citigroup and Wells Fargo all benefitted from rising interest rates, the very same factor that plagued certain regional banks in March.
- Higher rates allowed all three to profit more from lending, resulting in significant quarterly gains in net interest income.
- And deposit flight — the match that lit the flame at smaller lenders — was not a concern for these Wall Street giants. As suspected, many of the depositors that fled regional banks ran to bigger counterparts.
🧮 By the numbers: JPMorgan increased deposits 2% over the past quarter, attributing it to "significant" new account openings. It estimated that it picked up $50 billion in deposits as a result of the March crisis.
- Citi estimated it picked up a little bit under $30 billion.
Yes, but: All three — JPMorgan, Citi and Wells Fargo — increased reserves, guarding against loan losses in future quarters. JPMorgan cited a deteriorating economic outlook, while Wells Fargo pointed specifically to commercial real estate, credit card and auto loans.
The bottom line: This week's results were more than enough to cheer investors, who sent up JPMorgan shares 6.1%, and Citi 4.8%.
M&A
Arch Insurance, part of Arch Capital Group, has acquired small business insurance startup Thimble. Thimble works with a variety of carriers including Markel and Employers. The Thimble team will continue growing the business with its existing carrier partners and offer new solutions through Arch. More here ->
Fintech
Martini.ai, a Santa Clara, Calif.-based corporate credit monitoring startup, raised $6m in seed funding. martini.ai uses artificial intelligence to "reimagine corporate debt." More here ->
Soft Space, a Kuala Lumpur-based payments platform, raised $31.5m. Founded in 2012, Soft Space operates a payments platform that enables businesses to provide a “frictionless” payments experience for customers. The platform also harnesses data to provide its business customers with actionable insights and ensures clients remain compliant with regulatory standards. More here ->
Peach Payments, a South African online payments firm, raised $31m. Peach Payments is the second largest online payment gateway in South Africa and has operations in Kenya and Mauritius. It now plans to enter new African markets. More here ->
Kala, a Colombian lending infrastructure startup, raised $4m. The company is developing a vertical SaaS product for institutions, like banks and credit unions, that want to launch and operate their own credit products. More here ->
Investtech
Clear Street, a New York-based capital markets infrastructure startup, raised $270m in new Series B funding. The company was founded in 2018 with a mission “to replace the outdated infrastructure being used across capital markets,” starting with a prime brokerage platform for institutional investors." More here ->
Brassica Technologies, a Houston-based banking and investment infrastructure platform, raised $8m in seed funding. The company offers a flexible API to provide comprehensive transfer agent and trust services to any alternative asset platform. More here ->
Tradier, a retail brokerage for active traders, raised $24.6m in Series B funding. The company offers a full-featured, customizable trading platform with enhanced trading features and capabilities. More here ->
Altruist, a Culver City, Calif.-based custodian and software provider to the investment adviser industry, raised $112m in Series D funding. The company describes itself as "the only modern custodian built exclusively for RIAs." More here ->
Kite, a digital commerce brand acquisition and investment platform led by Rob Solomon (ex-CEO of GoFundMe), secured a $200m equity commitment from Blackstone and Juxtapose. More here ->
Crypto
Sei, a layer-1 blockchain focused on trading, raised $30m at what TechCrunch reports is an $800m valuation. While many Layer-1 blockchains provide general-purpose networks that developers can build on top of, Sei focuses on the crypto trading network through its chain. Its team is made up of former employees from Goldman Sachs, Databricks, Robinhood, Google and Nvidia. More here ->
Finst, a Dutch cryptocurrency exchange, raised €4m in seed funding.F inst's exchange debuted at the start of this year and says it has since attracted "thousands of active users" in the Netherlands through offering crypto trading with fees that average 82% cheaper than eight exchanges registered with the Dutch central bank.More here ->
Bitget, a Seychelles-based crypto derivatives exchange, raised $10m. The deal comes in a busy period for Bitget, which acquired crypto wallet BitKeep in March after investing an additional $30 million in the startup. BitKeep claimed to be Asia’s largest crypto wallet with 9.5 million users, while Bitget — a Seychelles-registered exchange founded in 2018 — had eight million users before the deal was signed. More here ->
Acre, a British blockchain mortgage startup, raised £6.5m. With its foundation on the blockchain, Acre helps traditional brokers compete with their digital rivals as lending gets increasingly complex and brokers have an increased responsibility to their customers More here ->
Insuretech
Axle, an API for insurance data, raised $4m in seed funding. The 1-year-old company developed a universal API for insurance data and is taking an approach of a “Plaid for insurance.” More here ->
Autotech
AutoLeap, a Toronto-based auto repair software startup, raised US$30m in Series B funding. Focused on ease of use, AutoLeap is providing an enterprise SaaS offering for the auto repair industry that digitizes their workflow, including the processing of customer quoting, invoices and job estimates. It also has a sales and marketing component for customer relationship management. More here ->
Proptech
VERO, a New York-based property leasing and screening platform, raised $9m in Series B funding. VERO eliminates application fraud and streamlines leasing workflows by providing innovative management platform. More here ->
Renew, a New York-based resident renewal process automation startup, raised $8m in seed funding from Upfront Ventures, Goldcrest Capital, Allen & Co. and Walkabout Ventures. More here ->
Graneet, a French provider of small construction company SaaS. More here ->
Also in the world of proptech, Austin-based Homeward conducted its third layoff since last August. The company said that this time 38 people, or 13% of the workforce, were impacted. 💔
From the Stash
Plaid launches new feature to speed up bank payments - More here ->
USAA combines manual, AI-driven language analysis to review complaints - USAA is using a combination of artificial intelligence-powered natural language processing and manual tagging to manage consumer complaints as more companies employ AI-based chat bots. USAA automatically and manually categorizes text when using machine learning and AI-driven text recognition and analysis tools. More here ->
PNC to reduce costs by $400M in 2023 - PNC continued its improvement plan in the first quarter of 2023 as efforts to reduce costs by $400 million this year stay on target. “This program funds a significant portion of our ongoing business and technology investment,” PNC Chief Financial Officer Rob Reilly said today More here ->
JPMorgan Chase tech spend falls 7% YoY to $2.1B - JPMorgan Chase decreased technology, communications, and equipment expenses year over year during the first quarter of 2023, but an increase in headcount and wage inflation saw noninterest expenses increase YoY. WHY IT MATTERS: The $3.7 trillion bank’s tech spending fell for the second straight quarter to $2.1 billion, a 7% YoY decrease. More here ->
Wells Fargo prioritizes efficiency initiatives - Wells Fargo recognized its clients’ demand for digital capabilities within its online and mobile platforms as digital usership grew in the first quarter of 2023. “Our customers expect us to provide them with increasingly digitized and seamless banking experiences across all channels,” Chief Executive Charlie Scharf said. More here ->
Rippling CEO Confirms an IPO Ahead - More here ->
Parker Conrad, the billionaire CEO and founder of Rippling, is eyeing a forthcoming public offering, he told The Information, though he would give no details on an exact timeline for the payroll and human-resources company’s listing.
Twitter has partnered with the investment platform eToro - to show real-time information about stocks and crypto prices. This expands upon the social network’s Cashtag feature, which provided info about a limited number of stocks and crypto coins through TradingView data. The social media company first introduced the feature in December, letting users search for a ticker or coin symbol like $TSLA, $APPL or $ETH to get prices directly in search results.” More here.
HSBC USA said it has hired more than 40 bankers from Silicon Valley Bank, with plans to "establish a dedicated banking practice focused on the innovation economy." The new effort will be led by David Sabow, who's joined by other SVB vets like Sunita Patel (investor coverage/biz dev), Katherine Andersen (head of life sciences/health) and Melissa Stepanis (head of tech).
Reports / Webinars
To drive efficiency, Financial Services companies are under immense pressure to automate their business.
Join us to learn more about how Financial Services Cloud can help deliver modern new processes to your employees and customers.
In this webinar, we'll cover:
- New opportunities to automate business processes, across the customer lifecycle
- Upcoming automation innovations in Financial Services Cloud
- RBC's best practices for modernizing the onboarding experience
—
☑️ Thanks for reading. Please ask your friends, colleagues and others to sign up. Use the above.
If you have any companies or news to share - use the form
AND - if we’re not already connected - let’s do it.