Fintech Highlights - 1/23/2024
Zing launches in the UK. "Invest America Accounts" may be a reality. The launch of peer-to-peer payments is the first step towards X’s move into finance
Here’s more of what we've been watching these last few weeks 👇
Pinned to the Top
Zing is a new international payments app and debit card being rolled out by HSBC in a bid to challenge big name fintechs like Revolut and Wise.
Though part of HSBC Group, customers do not need to be HSBC customers to download and use the Zing app, which is now available on all Android and Apple devices.
Zing launched in the UK on 4th January, allowing customers to hold up to 10 currencies at once, and send money to over 30 currencies worldwide.
The first 10,000 members will be given up to 20 free international ATM withdrawals every month. For everyone else, only the first withdrawal each month will be free, with any others incurring a £2 transaction fee.
Zing acts as an extension of Global Money, HSBC’s fee-free currency service that launched in 2020, and reportedly processed $11bn of transactions in 2022.
News of Zing’s launch has hit the front pages and generated a lot of interest across the industry, with immediate comparisons to Wise and Revolut.
As yet, it’s not clear how Zing will differentiate itself in a saturated UK market, but it does benefit from the backing of a huge international banking group to compete.
Additionally, HSBC have already stated interest in expanding Zing beyond the UK, which will only fuel speculation that it could become a significant player in time.
👉 Link
The BFD
Matt Lira is a longtime Republican politico, serving in the Trump White House and as a senior adviser to both Kevin McCarthy and Eric Cantor when they were House majority leaders.
- But his new full-time job isn't partisan. Instead, he'll head up a group to promote an initiative whereby all American newborns would get taxpayer-funded investment accounts.
The big picture: They're called Invest America Accounts, and are the brainchild of Brad Gerstner, founder and CEO of tech investment firm Altimeter Capital.
- "As I've gotten to know him, I've been struck by the range of stakeholders who trust Matt and who have worked with him to get things done," Gerstner says. "I look forward to the progress we can make together on this important initiative."
Details: The basic idea would be for the U.S. Treasury to create a $1,000 seed investment account for every baby born in America.
- The money would then be invested in the S&P 500 or in similar passive index funds, to be managed privately with parents able to select the custodians. Account holders would be eligible to withdraw upon becoming legal adults.
- Parents also could contribute more cash, but would not be able to make redemptions.
- Lots of specifics still need to be worked out before draft legislation is written, with Lira saying the $1,000 amount and withdrawal age both remain points of discussion.
By the numbers: There were nearly 3.66 million kids born in America in 2021, which means the program that year would have cost U.S. taxpayers at least $3.66 billion (administrative costs could boost the total a bit).
What they're saying: "There's a wave of skepticism right now about institutions and that the game is rigged for certain players," Lira says. "Here's a way for everyone to participate in the upside of American capitalism, thanks to the miracle of compounding returns, and also help enhance financial literacy."
- Lira adds that he plans to hire out a staff that will conduct research an engage with policymakers. The playbook will in part be modeled after opportunity zones (the initiative, not the specific policy), whereby the homework and legwork got done in waiting for a big legislative window, which became the 2017 tax bill.
Another BFD
Elon Musk, who bought social media platform Twitter (now X) for $44 billion, has previously stated his ambition to transform it into the ‘everything app’.
The launch of peer-to-peer payments is the first step towards X’s move into finance, though the exact rollout date has not yet been confirmed.
This comes less than a month after X announced three new money transmitter licences had been granted in the US.
Why this is interesting: The tech entrepreneur made his mark as the co-founder of PayPal and, after selling to eBay in 2002, turned his attention to electric cars. But in the summer of 2022 he created headlines with his big money purchase of Twitter.
This announcement is the first concrete step towards that, but the company have also shared plans to rollout more AI-powered tools as they continue to build X into a financial ‘super app’.
What’s next? Elon Musk’s ambition can easily be brushed off as bravado, but in a relatively short amount of time he has delivered substantial change at X.
Whether this is for better or worse is for you to decide, but we’re running a poll on X to gauge your reaction, and the results are overwhelming.
What we can also agree on is Musk’s determination to follow through on his promises.
However, peer-to-peer payments feel very similar to their existing tipping function, where users can already make one-off payments to their favourite creators.
What comes next will be interesting, and certainly all eyes are now on X.
M&A
Ant Group eyes $200m acquisition of MultiSafePay. More here ->
Accel-KKR agreed to buy Accertify, an Itasca, Ill.-based provider of fraud prevention solutions, from American Express (NYSE: AXP). More here ->
Edgewater Equity Partners acquired Ascent Technologies, a Chicago-based provider of compliance automation solutions for financial services companies. Ascent raised over $25m in VC funding from firms like Drive Capital, ING Ventures, Preservation Capital Partners, Alsop Louie Partners, Wells Fargo, and University of Chicago Endowment. More here ->
Bain Capital is weighing a sale process for Zellis, a British payroll tech firm that could fetch around £2b, per Bloomberg. More here ->
Insurance brokerage platform Keystone Agency Partners (KAP) has successfully acquired the Chicago-based digital broker LifeQuotes.com. More here ->
Fintech
Digital Onboarding, a Boston-based customer engagement platform for banks and credit unions, raised $58m from Volition Capital. Digital Onboarding aims to help financial institutions not waste hundreds of dollars on customers who open accounts only to close them. More here ->
Kashable, a New York-based provider of credit and financial wellness solutions as employee benefits, raised $25.6m in Series B funding. Kashable offers a benefit program to Employers providing their employees with disciplined credit at low rates More here ->
Tandem, a Chicago-based money management app for couples, raised $3.7m in seed funding led by Corazon Capital. The fintech app tracks first financial milestones for couples and grows with the relationship through planning, saving and spending features. More here ->
Vertice, a London-based software spend management startup, raised $25m in Series B funding. Vertice helps finance and tech leaders gain visibility, control and savings across their SaaS and cloud spend. More here ->
Carmoola, a British auto financing startup, raised £15.5m in Series B funding. More here ->
Alt Mobility, an Indian EV leasing and lifecycle management firm, raised $6m in equity and debt financing. More here ->
Upswing Financial Technologies, an Indian financial services platform, raised $4.2m in pre-Series A funding. More here ->
More fintech:
AltFi
Abdullah Ajibade
Mary Ann Azevedo
Investtech
Flowdesk, a Paris-based digital asset trading firm, raised $50m in Series B funding. More here ->
Depasify, a Madrid-based passive digital asset investing startup, raised €2m from JME Ventures and GoHub Ventures. More here ->
Canza Finance, a Nigerian DeFi FX startup, raised $2.3m. More here ->
Crypto
• HashKey Group, operator of Hong Kong crypto exchanges, said it raised nearly $100m at a $1.2b post-money valuation from backers like OKX Ventures. More here ->
Kiln, a crypto staking platform, raised $17m. 1kx led, and was joined by Crypto.com, IOSG, Wintermute Ventures, KXVC, and LBank. More here ->
Renzo, an Ethereum restaking protocol, raised $3.2m in seed funding. Maven11 Capital led, and was joined by Figment Capital, SevenX Ventures, and IOSG Ventures. More here ->
Woo X, a Taiwanese crypto exchange, raised $9m from Wintermute, Selini Capital, Time Research, Presto Labs, Pulsar, AlphaLab Capital, Efficient Frontier, Amber, and Riverside Hedge. More here ->
Insuretech
New York-based insurance startup, Korr, has successfully raised US$3.2 million in seed funding, with Motive Ventures taking the lead, alongside contributions from Tokio Marine Future Fund and Plug and Play Ventures. More here ->
Qover has officially entered the UK motor insurance sector, expanding its reach to the ninth European market for its innovative motor insurance programmes. More here ->
Bharatsure, the Mumbai-based Insurtech startup that specialises inproviding Infrastructure-as-a-Service (IaaS) solutions tailored for insurance distributors, has successfully raised US$1 million (approximately 8.3 crore), with Capital-A taking the lead. More here ->
Proptech
Overmoon, a San Rafael, Calif.-based vacation rental platform, raised $10m from NFX, Khosla Ventures, Camber Creek, 1Sharpe, and Sunsar Capital. More here ->
M/C Partners invested in AccessParks, a San Diego-based provider of broadband to RV parks, manufactured housing communities and state/national parks. More here ->
PredictAP, a Boston-based provider of real estate accounts payable software, raised $8m in Series A funding. RET Ventures led, and was joined by Wise Ventures. More here ->
From the Stash
PNC to spend $425M on improvement plan in 2024 - PNC Financial plans to spend $425 million this year on its ongoing improvement plan, which funds business and technology investments. As the Pittsburgh-based bank looks to continue to improve operations, it is pulling back on spending in other areas, including headcount, Chief Financial Officer Robert Reilly said during today’s fourth-quarter earnings call. More here ->
U.S. Bank tech spend up 12% to $513M - U.S. Bank made digital and operational investments during the fourth quarter as it focused on modernizing payments and technology. The $668 billion, Minneapolis, Minn. bank spent $513 million on technology and communication during Q4, up 12% year over year, according to its Q4 2023 earnings presentation. More here ->
KeyBank invests in clients, people, technology - KeyBank prioritized its investment in technology during the fourth quarter as it looks to build the bank’s franchise to ensure competitiveness. “Our first investments are always going to be good clients and our people. And then in this world, you’ve got to continue to invest in technology,” Chief Financial Officer Clark Khayat said. More here ->
Truist restructuring costs to reach $225M - Truist Financial is simplifying its operations through ongoing restructuring efforts, affecting headcount, footprint and innovation. Costs associated with the restructuring are expected to reach $225 million, or more than 30% of the bank’s savings goal of $750 million for the year, Chief Financial Officer Mike Maguire said during Truist’s fourth-quarter 2023 earnings call. More here ->
Discover to focus on integrated digital banking model in 2024 - Discover Financial Services invested in its integrated digital banking model, risk management, analytics and compliance initiatives in 2023 and expects to continue those efforts this year. “We’ve dedicated a lot of dollars in terms of analytics, in terms of call frequency and best time to call, and we’ve worked on our call scripts... More here ->
Citizens to deliver on AI, data analytics in 2024 - Citizens Bank is looking toward AI and generative AI technology to improve operational efficiency and client experience. The $222 billion bank has “many exciting things on our technology, our digital, data analytics and AI road map that we need to deliver on,” Chief Executive Bruce Van Saun said during the bank’s fourth-quarter earnings call. More here ->
Huntington CTO to retire - Huntington Bancshares Chief Technology and Operations Officer Paul Heller is set to retire March 1. Heller has built the technology operations throughout the $187 billion, Columbus, Ohio-based bank since 2012, according to a Jan. 10 bank release. As Heller retires, the bank’s executive team is getting an overhaul. More here ->
Fifth Third to up tech investment in 2024 - Fifth Third Bank expects to increase noninterest expenses slightly in 2024 as technology investment ticks up at the bank. Noninterest expenses in the fourth quarter fell 7% year over year to $1.5 million, but are expected to increase 1% overall in 2024. More here ->
More from the stash:
Editorial Team
Reports / Webinars
Data.ai - State of Mobile 2024 - To empower you in maximizing your mobile performance this year, we are thrilled to release the industry’s leading mobile report — the State of Mobile 2024. Seize the opportunity to stay ahead of the curve and propel your mobile strategy to new heights. Download the report to unlock a wealth of insights that will reshape the way you approach 2024.
Why should retailers care about embedded financial services? - Finding new revenue streams is vital. And this is where embedded finance comes into play. In this 11:FS Explores, embedded finance expert David Barton-Grimley breaks down the arsenal of tools embedded finance gives retailers to boost revenues.
The current state of open banking - David Brear is joined by the CEO of South African fintech Stitch, and Canadian open banking expert Andrew Escobar to discuss the current state of open banking, why more countries are pushing for a regulated framework, and what the future holds in this space.
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