Fintech Highlights - 10/26/2021
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Here’s what’s worth watching this week….. 👇
Pinned to the Top
For years, the most avid investors in crypto startups have been firms that specialize in the category—with the notable exception of Andreessen Horowitz, the Silicon Valley venture capital firm that got crypto religion early. Now, though, the most storied firms on Silicon Valley's Sand Hill Road are going from crypto curious to true believers.
This year, a quarter of the new investments by the U.S. and European branches of Sequoia Capital have been crypto related. In the latest example, Sequoia and Founders Fund are leading an investment round in a six-month-old crypto startup called Parallel Finance that values it at $250 million. Accel, Sequoia, Lightspeed Venture Partners and Bessemer Venture Partners are among the top VC firms that have made more crypto investments this year than in any other.
And some of those firms are thinking about taking the next step, as Andreessen Horowitz did several years ago, and launching their own dedicated crypto funds.
The further along the decentralized finance model goes, the more validity there is to it. Definitely a space to be watching closely.
The BFD
Expense management platform Expensify officially filed its S-1 late Friday, joining the parade of enterprise tech companies going public this year.
Why it's the BFD: The Portland-based company aims to follow enterprise-facing tech companies like WalkMe, Sprinklr, Confluent and others, which have all gone public in the last several months. Just last week, San Francisco-based DevOps platform GitLab saw its shares spike nearly 35 percent in first-day trading—giving the company a market cap of nearly $15 billion. So this will be an interesting one to watch.
Details: According to the S-1, Expensify has realized significant growth in the first half of this year. The company saw revenue for the first six months of 2021 of $65 million—compared to $40.6 million for the first half of last year. Net income was $14.7 million for the first six months, versus $3.5 million for the same six months in 2020. Adjusted EBITDA was $22.9 million for the first six months of 2021, compared to $9.2 million last year.
The bottom line: Enterprise SaaS has had some challenges pre-pandemic. But is certainly on a role right now as companies expedite their digital transformation efforts. Expensify's issuing will show if that trend is continuing
Fintechs
Pomelo, a Buenos Aires-based embedded finance startup, raised $35 million. Its infrastructure aims to allow fintechs and embedded finance players to launch virtual accounts and issue prepaid and credit cards via “compliant” onboarding processes. More here ->
Embed, a Vancouver, Wash.-based securities custodian-and-clearing firm, raised $20 million. Embed will soon roll out its financial infrastructure platform that will let customers add stock trading to their own products by the end of this year. The foudner had led Cash App Investing, a subsidiary of Square. More here ->
N26, the German digital / neo bank, raised $900 million at a $9 billion valuation. Founded in 2013, N26 is one of several start-ups in Europe seeking to challenge established banks with app-based checking accounts and little to no fees. Competitors include Revolut, which was recently valued at $33 billion, and Monzo. More here ->
Brex, the San Francisco-based corporate credit card company focused on startups, raised $300 million at a $12.3 billion valuation, per TechCrunch. More here ->
Billie, a German BNPL platform for B2B transactions, raised $100 million. Money that it will be using to continue building out the range of BNPL-type services that it provides to organizations buying goods to run their businesses, both in Europe and further afield after passing 100,000 customers earlier this year. More here ->
Groww, an Indian investing platform, raised $251 million in Series E funding at a $3 billion valuation. Groww helps millennials invest in mutual funds, futures, derivatives, stocks, and initial public offerings. More here ->
UpEquity, an Austin, Texas-based digital mortgage company, raised $20 million in Series B equity funding and $30 million in debt. The company makes cash offers on a buyer’s behalf and has seen 500% year-over-year growth in revenue and transaction volume. More here ->
SMBX, an SF-based fintech marketplace for small businesses bonds, raised $11.5 million in seed funding. The founders created the SMBX marketplace and the Small Business Bond after the SEC implemented Title III of the JOBS Act in 2016, making it easier for people to invest in startups and small businesses as non-accredited investors. More here ->
Resistant AI, a Prague-based provider of fintech anti-fraud tools, raised $16.6 million. The company uses artificial intelligence to help financial services companies combat fraud and financial crime — selling tools to protect credit risk scoring models, payment systems, customer onboarding and more. More here ->
Element Finance, a San Francisco-based open-source protocol for fixed and variable yield markets, raised $32 million. Element, which provides a yield-maximizing marketplace for crypto interest rates, will use the funds to expand its workforce, especially in the areas of engineering, research, user interface (UI) and design, the company said. More here ->
Pismo, a Brazilian banking and payments startup, raised $108 million. Pismo said its cloud-native platform for financial institutions hosts more than 25 million accounts and transacts more than $3 billion a month, adding that firms like Brazilian banks Itau Unibanco Holding SA and Banco BTG Pactual SA are among its customers. More here ->
Primer, a U.K. online payments startup, raised $50 million. Primer has built a drag-and-drop framework to help merchants easily build payment stacks to sell online, and has seen rapid take-up of its services in the 20 months since it launched. More here ->
Zopa, a U.K. peer-to-peer finance company, raised $300 million. Essentially a neobank - it has over 500,000 users in the U.K. where it provides peer-to-peer lending, savings accounts, credit cards and other services. More here ->
Insuretechs
BondAval, raised $7 million. An insurtech startup with offices in London and Austin, Texas, they are focused on helping retailers access better credit terms while providing assurance to suppliers that they will be paid on time. More here ->
Insurights, a New York-based employee health management startup, raised $22 million in seed funding. The company has developed an AI-powered platform, designed to improve human health by allowing employees to seamlessly access, understand and utilize their health benefits. More here ->
From the Stash
Capital One Launches with Button — blog.usebutton.com Capital One Launches with Button’s Tap product and Introduces Dedicated Mobile Commerce Strategy as the Commerce and Fintech Revolutions Collide!
Ally Is Giving Credit Cards Another Go With Fair Square Financial — axios.link
Ally Financial is giving the world of credit cards another go. The auto-lending giant said on Thursday it’s agreed to pay $750 million for credit-card company Fair Square Financial. With the deal, Ally will be getting a business that has more than 650,000 cardholders who carry about $763 million in balances.
BofA Crushing It with Financial Wellness App (Here's Why) — thefinancialbrand.com The megabank succeeded where others failed by creating a channel-agnostic 'engagement platform' that Millennials and Gen Z love.
Umpqua focuses on ‘human-digital’ banking strategy amid merger — bankautomationnews.com
Umpqua Bank is cultivating its "human-digital" strategy as it approaches a partnership with Tacoma, Wash.-based Columbia Bank that will boost its market share on the West Coast.
Podcast
The Leadership In Insurance Podcast with Alex Bond — preview.mailerlite.com We didn’t feel we could ask our guests to share their fears, hopes and aspirations if we do not share some of our own biggest challenges so we have taken a different path with the podcast today and we have our host Alex discuss his challenges with mental health, his experiences with managing his mental health and what he thinks we can do to accommodate and to help other people manage their own mental health in the world of start-ups.
Conferences
Connect 2021 - Facebook Conference — facebookconnect.com Discover more about the Facebook Connect conference here, with event updates, and all you need to know about the AR/VR conference.
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