Fintech Highlights - 10/17/2023
Q3 earnings season is here. Goldman is getting out of consumer banking. Block acquires HiFi. Carefull raises a round. Here's what we've been watching this week 👇
Pinned to the Top
Earnings reports for Q3 kicked off with big banks this week.
- Profits for JPMorgan Chase, Wells Fargo and Citigroup soared by more than a third from a year ago, WSJ reports.
Why it matters: Financial giants have been charging more for loans than they have been paying for deposits, but the latter is starting to catch up.
- Interest expense rose 275% from the same time last year at Wells Fargo to nearly $9 billion last quarter.
- Citigroup reported a 185% spike to $21 billion, and JPMorgan reported a 170% jump to $22 billion.
The BFD
Goldman Sachs has agreed to sell Atlanta-based installment lender GreenSky to an investor group led by Sixth Street Partners.
Why it matters: GreenSky was one of the biggest stumbles in David Solomon's plans to expand into the consumer market.
- Goldman paid $1.7 billion to buy the company in 2021, but already had reported a $504 million writedown, and says that the sale will result in a 19-cents-per-share knock to Q3 earnings.
Details: The Sixth Street group also includes KKR, BayView Asset management and CardWorks, while a source says that PIMCO will acquire part of the underlying, $8 billion loan book.
The bottom line: Wall Street went to Main Street and tripped on the curb.
M&A
Block has acquired Hifi, a music-focused fintech startup, for an undisclosed amount. Hifi launched in 2020 as a financial rights organization for artists, enabling users to track their royalty income through a dashboard that aggregates data from music labels, distribution services, music publishers and performing rights organizations (PROs). This marks Block’s second investment in music tech after buying music streaming service Tidal in 2021. More here ->
Stone Point is in talks to buy the insurance brokerage unit of Truist Financial (NYSE: TFC) for around $10b, per Semafor. More here ->
Cred, an Indian credit card payment app valued by VCs at $4b, is in talks to buy Indian wealth management app Kuvera, per TechCrunch. Kuvera is backed by VC firms like Eight Roads. More here ->
MGT Partners acquired CM Select Insurance, a Greenwood, Colo.-based insurer for U.S. religious organizations. More here ->
CRED in talks to acquire mutual fund startup Kuvera, in what is a sign of the Indian fintech giant’s growing interest in the lucrative category of stock investments and mutual funds. Kuvera, ffocuses on stable and conservative long-term investments and has won many affluent customers in India with its zero commission offering, reliable customer support service and a wide-range of investment tools such as the ability to automatically adjust the portfolio to avoid over reliance on a particular asset. More here ->
Payment processor Shift4 Payments has purchased competitor SpotOn’s sports and entertainment business unit for $100 million in cash. More here ->
Aviation insurance startup SkyWatch.AI has acquired the assets of Droneinsurance.com from insurance technology provider REIN. SkyWatch offers hourly, monthly, and annual insurance policies that cover a variety of drone operators — from small photography businesses to inspection services, drone deliveries, light shows, and beyond. Coverage is available in all 50 states and Canada. More here ->
European digital insurtech startup Getsafe acquires Luko’s German portfolio, reaches 550,000 customers. More here ->
Fintech
Carefull, a New York-based startup that helps banks protect older customers from fraud, raised $16.5m in Series A funding. The company is leverging to help families defend money, credit, identity, passwords and critical documents. More here ->
Canopy Servicing, a Claymont, Del.-based loan management platform, raised $15.2m in Series A1 funding. The deal valued the company at $35m pre-money. It was valued at $48m pre-money in its Series A. The company enables personalized, transparent, and safer credit and lending products, such as Buy Now Pay Later and modern payment cards. More here ->
StretchDollar, a San Francisco, CA- and Philadelphia, Pennsylvania-based startup that enables small employers to provide pre-tax funding to employee-owned health insurance, raised $1.6M in Pre-Seed funding. More here ->
Sparx, a startup out to manage financial operations for enterprises, secured $3.1 million in seed capital to continue developing its free suite of automated products meant to save companies money on their recurring expenses. Sparx wants to do for enterprise what Truebill did for consumer recurring bills. More here ->
Kafene adds another $12.6M to its Series B round. Kafene is a flexible point-of-sales digital offering that provides lease-to-own options making purchases accessible for the underserved consumer that has non-prime credit. More here ->
Stampli, a key player focused on AI-powered accounts payable automation, announced that it has raised $61 million in a Series D venture funding round. More here ->
Fintech firm Revio boosts community bank growth with $2.5M funding. Specialising in the enrichment of core banking data, Revio has established itself as a pivotal player in sales enablement and marketing personalisation. The company provides a unique platform for community and regional banks to spotlight potential growth areas, aiming to foster stronger customer ties, extended customer lifetime value, and heightened profitability. More here ->
Investree, an Indonesian P2P lender, raised €220m in Series D funding. It provides invoice and purchase order financing to support the country’s SMEs. More here ->
Kennek, a London-based lending infrastructure provider, raised $12.5m in seed funding. kennek helps any lender to scale their operations, automate payments, manage risk and report to their investors. More here ->
Mexico’s albo has raised $40m in Series C funding. The neobank aims to offer easy-to-manage online accounts and smart budgeting tools along with a prepaid Mastercard so that customers can receive, transfer, and spend their funds More here ->
Brite, the Stockholm based account-to-account payment company, raised $60M. Brite, which only launched in 2019 and was founded by former Klarna exec Lena Hackelöer, had something of a breakout year in 2022, claiming to have doubled its transaction volume and revenue, and reached profitability. Its platform is now available in 25 countries across Europe, though not the U.K. More here ->
South African fintech Stitch, which has built an “end-to-end payments solution designed to meet the complex and evolving payments needs for its enterprise clients,” is announcing some funding to become a market leader in this payments segment - raising a $25M Series A extension. More here ->
Investtech
Alpaca, a San Mateo-based startup, offers stock and crypto brokerage trading services via API that enables investing fintech companies and others to embed this functionality into their apps. Today, the startup announced it has secured $15 million in the form of a convertible note from Japanese financial firm SBI Group. More here ->
Farther has closed a Series B funding round at a $131M valuation. This new round comes a little over a year after the wealth tech firm raised a Series A on a $50 million valuation. The firm’s core offering includes a platform which provides strong client service with all their accounts and products under one login, while also giving advisors the tools to earn and accelerate the growth of their books — streamlining administrative tasks to focus on in-depth problem-solving for clients. More here ->
Zest Equity, a UAE-based digital platform for "democratizing" private markets, raised $3.8m in seed funding. More here ->
Vega, a UK-based WealthTech, exits stealth with over $8M funding. More here ->
Vyzer raises $6.3M seed round for AI-powered wealth management platform. The platform aims to eliminate the need for conventional high-cost models and financial advisors and make wealth management accessible and understandable More here ->
Berlin-based fintech Upvest, which provides trading, settlement and custody infrastructure for digital wealth management, has secured €30 million in a fundraising round led by BlackRock. More here ->
Untangled Finance, a London-based startup bringing private credit onto the blockchain, raised $13.5m. More here ->
Insuretech
Matic Insurance has successfully raised an additional US$20 million in an extension of its Series B funding round. Founded in 2014, Matic Insurance specialises in offering home and auto insurance through strategic partnerships. The company boasts collaborations with over 100 lenders, servicers, and banks, collectively facilitating the processing of 20% of home loans in the United States. More here ->
Vellum Insurance, a data and analytics platform for the insurance and reinsurance industries, raised $7m in seed funding. Vellum Insurance is a data and analytics platform that provides insights to the insurance and reinsurance industries. The platform is built specifically for the insurance and reinsurance industry, and it allows professionals to measure risk in real-time, identify changes and trends, and quickly take proactive steps to control risk within their portfolio More here ->
Indian insurtech InsuranceDekho has announced the successful completion of its Series B funding round, raising an impressive US$60 million. More here ->
Orus, a French professional insuretech startup, raised €11m in Series A funding. he startup offers insurance products specifically designed for small and medium companies. More here ->
Reserv raises $20M for AI-driven insurtech software More here ->
Proptech
Propify, a Boston-based property management software startup, raised $3.3m in seed funding. Propify’s API enables engineers to launch integrations in days rather than months, reducing development and ongoing maintenance costs. More here ->
From the Stash
Tiny Banks That Powered Cash App Grew Like Crazy. Then the Feds Came Calling - How a firehose of business from fintechs like Block can overwhelm their small banking partners. More here ->
Allianz Partners and bolttech Forge Strategic Alliance to Meet Rising Demand for Embedded Insurance Solutions - In a major move addressing the escalating demand for embedded insurance solutions in the realm of device and appliance protection, Allianz Partners, a global leader in B2B2C insurance and assistance services, has announced a strategic partnership with bolttech, a renowned international insurtech. More here ->
Bolt CEO gets frank about SEC probe - Bolt Financial CEO Maju Kuruvilla says that the one-click checkout company is putting a recent U.S. Securities and Exchange Commission probe behind it and is moving on. “It obviously is a very, very involved process, but we’re really happy to put that behind us,” Kuruvilla told TechCrunch. “We look forward to focusing on the momentum for the business and how we can help the retailers, especially the big retailers who are looking to us to innovate for them, because this is a tough year for retailers.” More here ->
Banking-as-a-service startup Synapse confirmed Friday that it laid off 86 people, or about 40% of the company - The San Francisco–based company, which operates a platform enabling banks and fintech companies to easily develop financial services, has been open about past layoffs. In June, CEO Sankaet Pathak wrote in a blog post that the company had let go of 18% of its workforce as “the current macroeconomic conditions” had begun to impact its clients and platforms, affecting its anticipated growth. More here ->
Wells Fargo reduces headcount, invests in tech - Wells Fargo is leveraging technology and automating investments to streamline its operations as the $1.6 trillion bank continues to trim its workforce. “I would say there are very few parts of the company that are optimized at this point,” Mike Santomassimo, chief financial officer at Wells Fargo, said today during the bank’s third-quarter earnings call. More here ->
Visa plans to invest $100 million in companies developing generative AI technologies and applications “that will impact the future of commerce and payments,” - Visa Ventures head David Roff told TechCrunch that the fintech giant has “a lot of flexibility” with regards to how many investments it would make out of the new fund, and average check size. More here ->
Last week, Klarna introduced a suite of new features - including an AI-powered image-search tool called Shopping lens. The Swedish fintech giant is also launching shoppable videos in Europe, in-store product scanning, a new cashback program, express refunds and more. More here ->
Adyen lost $13 billion in market cap last month - when investors scrambled to sell shares after the payments company missed quarterly revenue targets. But it’s not the only one facing the music in fintech. More here ->
And more….
The Public platform offers everyday investors a slice of ‘Shrek’ catalog with quarterly payouts
Stockpile and Green Dot partner on debit cards for minors
Amex pilots biometrics in online checkout
Pie Insurance appoints Audra Foglietta as chief financial officer
Monzo picks Cash App vet Conor Walsh for US CEO
Folsom-based EV Life launches electric car loan to lower monthly payments
CLEAR launches reusable KYC solution
Reports / Webinars
Why every business should care about FedNow - In an article from earlier this year, Orum CEO Stephany Kirkpatrick writes about the importance of FedNow’s launch in the US and what it means for businesses.
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