Oct 24, 2023 10 min read

Fintech Highlights - 10/24/2023

Bank of America posts a Q3 profit. American's hold a lot of stocks. boltech acquires Digital Care. Here's what we've been watching this week 👇

Pinned to the Top

Bank of America Profit Climbs 10%; CFO Says Dealmaking Slump Will Persist

Bank of America’s third-quarter profit grew 10% to $7.8 billion, aided by strong earnings in the bank’s trading division and extra revenue from charging customers higher interest rates.

BofA bucked an industry-wide slump in investment banking fees, with its fee revenue rising 2% to $1.2 billion, but chief financial officer Alastair Borthwick said a sluggish deal-making environment would persist until investors had greater certainty on the future macroeconomic and geopolitical situation. “Investment banking can come back very, very quickly. It’s just that we’ve grown tired of predicting when that might be,” Borthwick told analysts.

CEO Brian Moynihan said the bank added clients and accounts across all lines of business “in a healthy but slowing economy that saw U.S. consumer spending still ahead of last year but continuing to slow.” The bank, the second-biggest in the U.S., said its markets division reported its second best year-to-date sales and trading revenue in a decade as traders navigated market gyrations sparked by the Federal Reserve’s rate hikes. Shares of BofA rose 1.8% in Tuesday trading.

The BFD

Data: Federal Reserve. Chart: Axios Visuals

The share of U.S. households that own stock either in mutual funds, retirement accounts or as individual shares hit a new high in 2022.

Why it matters: The large share of households with a stake in the stock market is a distinctive feature of American capitalism, setting it apart from other big advanced nations, Matt Phillips reports for Axios Markets

🧮 By the numbers: The Fed's just-published triennial Survey of Consumer Finances shows that in 2022, about 58% of American households owned stock, either directly or indirectly through mutual funds and other investment accounts.

That's the highest on record — trouncing the previous high water mark of 53% seen during the dot-com boom and right before the Global Financial Crisis.

What's happening: The rise in those who own stock directly — that is, by buying individual shares rather than through mutual funds — was a big driver.

Direct ownership of stocks increased "markedly" between 2019 and 2022, jumping from 15% to 21% — making it the largest change on record, the Fed said in its report.

This reflects COVID-related changes in behavior among Americans, many of whom first turned to the stock market as a way of scratching a sports gambling itch during the early phase of the pandemic.

Smartphone-based apps aimed at younger traders, notably Robinhood, helped build the habit.

Surging retail stock buying famously became a cultural phenomenon in January 2021, when coordinated retail investors helped drive the share price of GameStop into the stratosphere.

M&A

Hamilton Insurance Group, a Bermuda-based insurer and reinsurer, filed for a $100m IPO. It reports $1.2b in revenue for the 12 months ending June 30, 2023, and plans to list on the NYSE (HG). Backers include Blackstone. More here ->

Rho Technologies, a New York-based SME banking startup valued at $475m by VCs like Dragoneer, is in talks to acquire Creative Juice, an Austin, Texas-based provider of upfront financing for creators, per The Information. Creative Juice has raised over $20m from firms like Acrew Capital, Index Ventures and Inspired Capital. More here ->

Fiserv (NYSE: FI) acquired Skytef, a Brazilian provider of electronic funds transfer solutions. More here ->

Stax Payments, an Orlando, Fla.-based payments platform valued by investors at around $1b, acquired Atlantic-Pacific Processing Systems, a Las Vegas-based payment processing and merchant tracking provider. More here ->

BitGo, a Palo Alto, California-based digital asset platform valued by VCs at $1.75b, acquired HeightZero, a Jackson, Wyo.-based wealth management platform. More here ->

bolttech, the fast-growing international insurtech, announced that it has acquired Digital Care, a leading embedded protection company based out of Poland. More here ->

In a move aimed at broadening its footprint in the Canadian market, insurtech firm Accelerant has announced the acquisition of Omega Insurance Holdings, Inc. from Till Capital Ltd. More here ->

Depository Trust & Clearing, a Jersey City, N.J.-based stock market clearinghouse, agreed to buy Securrency, a developer of blockchain-based fintech infrastructure, for a reported $50m. Annapolis, Md.-based Securrency raised around $49m from firms like RRE Ventures, Abu Dhabi Catalyst Partners, Mubadala, State Street and U.S. Bank. More here ->

Airwallex, an Australian fintech valued by VCs at US$5.5b, agreed to acquire MexPago, a Mexican payment service provider. More here ->

Fintech

Nova Credit, a startup focused on immigrant credit history, raised $45m in Series C funding. The company offers cross-border credit reporting for new-to-country consumers, with a focus on cash flow underwriting and verification of income and employment via its CashAtlas product. More here ->

Prove Identity, a New York-based fraud reduction startup, raised $40m co-led by MassMutual Ventures and Capital One Ventures at a valuation north of $1b. Prove is "the modern way for businesses to enable their customers to prove their identities" and offers phone-centric solutions that enable its customers to acquire new consumers and engage with their existing customers. More here ->

QuoteMachine, a customer quote and invoicing startup, raised $3.7m in seed funding. The company enables emrchants to automate payment collection with online documents integrated with Point of Sale systems like Lightspeed Retail and QuickBooks Online. More here ->

Finzly, a Charlotte-based provider of payments infrastructure for financial institutions, raised $10m in Series A funding. The company offers a sleek customer experience for instant payments on the RTP network quickly and seamlessly through a modern-preconnected payment infrastructure. More here ->

Statement, an enterprise cash flow management platform, raised $12m in seed funding. Statement is described by it's founders as a “cash intelligence” platform for companies working with multiple banks, managing liquidity and attempting to forecast their cash flow. Statement connects with banks and integrates with existing systems, including business tools (e.g. Google Sheets), enterprise resource management platforms (e.g. Oracle Cloud, NetSuite) and payment providers (e.g. PayPal, Stripe), to reconcile and sync real-time financial data to give visibility into a firm’s cash performance. More here ->

Darwinium, an SF-based fraud detection startup, raised $18m in Series A funding. The company offers a digital security and fraud prevention platform that runs on Content Delivery Networks. More here ->

Nexu, a provider of financing solutions to car dealerships in Mexico, raised $20m in Series B funding. Nexu is a financial solution to provide auto loans faster and with less paperwork than at a traditional dealership More here ->

Mon Petit Placement, a French digital savings startup, raised €6.5m. It's mission? "Make investment accessible to all." More here ->

Akahu, a New Zealand-based open finance startup, raised $1.4m. Akahu provides open banking and open finance infrastructure and make it simple for people to connect their financial accounts to trusted third parties. More here ->

Investtech

Flanks, a Barcelona-based API for automated wealth services, raised $8m in Series A funding. Flanks can automate up to 80% of the manual processes performed by wealth managers. More here ->

Jiraaf, an Indian fixed-income investment startup, raised $8.7m in Series B funding. Jiraaf offers individual investors access to an array of curated fixed-income products and a mix of asset classes, risk profiles, yields, and tenors for wealth creation – areas that were only accessible to high-net-worth individuals earlier. More here ->

Neo, an Indian wealth and asset management startup, raised $35m from Peak XV Partners. More here ->

Globacap, a London-based startup focused on digitizing and automating private capital markets, raised $21m in Series B funding. More here ->

Auquan, a London-based data science platform for financial services, raised $3.5m in seed funding. Auquan is a data science platform for asset managers and hedge funds. They offer solutions across the entire investment workflow for Portfolio Managers to stay ahead of the market and achieve better returns. More here ->

Crypto

Membrane Labs, a cryptocurrency-focused trading and lending platform, raised $20m in Series A funding. Membrane is a platform for enterprise-grade trading and lending applications integrated with a custody-agnostic settlement network. More here ->

SynFutures, a decentralized crypto derivatives exchange, raised $22m in Series B funding. For SynFutures, “anything” can be large-cap cryptocurrencies, altcoins, equities, gold, indices, or any other asset they desire, a unique offering among decentralized derivatives platforms which typically only offer set trading pairs and products. More here ->

Insuretech

Nirvana Insurance, an SF-based insurer of commercial truck fleets, raised $57m in Series B funding. More here ->

Iink, a Tampa, Fla.-based payments startup focused on multiparty property insurance claims, raised $12m in Series A funding. It provides a digital payments network that expedites the disbursement of funds associated with multi-party property insurance claims. More here ->

Proptech

Natrx, a Raleigh, N.C.-based developer of coastal resilience infrastructure, raised $3.5m in seed funding. Ponderosa Ventures and Oval Park Capital co-led, and were joined by Fulcrum Financial Partners, Silverstrand Capital and Titan Cement. More here ->

Nomad Homes,a Dubai-based home buying platform, raised $20m in Series A extension funding. More here ->

From the Stash

Conferences

The Guide to AWS re:Invent for Financial Services Professionals

Join AWS in Las Vegas, Nov. 27 – Dec. 1, to hear from AWS leaders and industry experts about the latest announcements and developments in our solutions for financial services, learn from your peers, and explore the latest tech trends that you can quickly implement into your organization.

This year’s program promises to be the most exciting one yet, with more than 75 breakout sessions dedicated to the financial services industry. Scott Mullins, General Manager of Worldwide Financial Services for AWS, will also lead an Innovation Talk with executives from JPMorgan Chase & Co., S&P Global, and Nasdaq on building the future of financial services.

Register here ->

2024 Fintech Risk & Compliance Forum - January 17 - 18, 2024, Chicago, IL

The Fintech Risk & Compliance Forum is a must attend conference for senior-level executives who understand the pivotal role of fintech risk management and compliance.

Currently there are special discounted rates for practitioners and early registrants (until 10/31/2023).