Fintech Highlights - 11/12/2024
Here's what we've been watching this week 👇
Pinned to the Top
Cryptocurrency exchange Coinbase reported its fourth straight quarterly profit and announced a stock buyback of up to $1 billion, showing the company is delivering on its promise of steadier profits even during crypto market swings.
Revenue rose nearly 80% to $1.2 billion year-on-year in the third quarter, but dropped compared with the second quarter. A large part of Coinbase’s revenue comes from fees on crypto trades, which tend to rise and fall in tandem with crypto prices. Coinbase noted that trading in stablecoins grew significantly compared to the previous quarter—it generated little or no fees from those trades, but executives said growing stablecoin adoption still helps its overall business.
Coinbase also generates revenue through a partnership with Circle, which issues stablecoins designed to track the U.S. dollar. Coinbase shares in the interest generated by reserves backing the stablecoins, and revenue from the partnership was up 43% year-over-year and roughly flat from the prior period. Coinbase projected stablecoin and other non-trading revenue of between $505 million and $580 million in the fourth quarter, compared to $375 million the same period a year earlier and $556 million in the third quarter.
The BFD
Crypto exchange Kraken said in a blog post last week that it’s cutting an unspecified number of jobs to reduce organizational layers, even as it’s grown to generate “north of” $1 billion in net revenue.
Kraken also announced that Arjun Sethi, co-founder of Tribe Capital and a Kraken board member, is joining as co-CEO alongside David Ripley, confirming a report from The Information last week.
Kraken joins other crypto firms making job cuts despite a market rebound this year. Consensys, a software provider for ethereum, announced Tuesday it’s cutting 162 jobs, or 20% of its workforce. Dydx Trading, which develops the decentralized crypto exchange, said on Tuesday it laid off 35% of staff. Kraken executives have said that the company plans to go public, though its timeline is unclear.
The Other BFD
JPMorgan has rebranded its internal blockchain platform Onyx to Kinexys and renamed JPM Coin to Kinexys Digital Payments. The bank also said it plans to offer instant dollar-euro settlement via its blockchain, which it says will help customers speed transactions and reduce settlement risk.
Banks including JPMorgan have been experimenting ways to use blockchain, though most efforts are still early and haven’t generated sizable revenues. JPMorgan’s new capability will add a revenue source by collecting a spread on foreign exchange conversions done through its blockchain, a JPMorgan executive told Bloomberg.
The bank’s blockchain already processes more than $2 billion in average daily transaction volume, with companies including Siemens, Ant International and BlackRock using it to make cross-border payments and other needs.
M&A
Bank of New Zealand acquired open banking startup BlinkPay.More here ->
BC Credit Partners agreed to buy Runway Growth Capital, a Chicago-based provider of growth loans. More here ->
Technology provider nCino Oct. 30 announced plans to acquire SaaS platform FullCircl for $135 million cash. The acquisition will create an entity that enables financial institution customers to “unify and intelligently manage the entire client lifecycle across information intake, document collection and customer due diligence in one place, regardless of the entity’s complexity. More here ->
J.C. Flowers agreed to buy Pepper Advantage, a credit management firm focused on Europe and Asia, from Singapore's Pepper Global. More here ->
One Equity Partners sold Dragonfly Financial Technologies, a provider of digital business banking and cash management solutions, to FIS (NYSE: FIS). More here ->
Access Group, backed by TA Associates, acquired Paytronix, a Newton, Mass.-based restaurant customer engagement and payments software provider, from Great Hill Partners. More here ->
Fintech
San Francisco startup Tola, a SMB-focused cashflow management startup raised a $10.2M seed round. The company offers a "free and easy-to-use platform for businesses to manage their payments" and is "designed to streamline payment processes, reducing costs and increasing efficiency." More here ->
Melio, a New York-based B2B payments platform for SMBs, raised $150m Series E funding at a $2b valuation. Fiserv led, and was joined by Shopify Ventures, Capital One Ventures, Accel, Bessemer, Coatue, Frontline Ventures, General Catalyst, Latitude, and Thrive Capital. More here ->
Recognise Bank, a British digital bank for SMEs, raised £25m. It is focused on SME lending, financed by personal and business savings accounts and offers quick and simple business financing options. More here ->
JustFund, an Australian divorce lending fintech, raised A$5.7m. More here ->
9fin, a British financial data firm, is in talks to raise funding at around a $500m valuation from Mubadalaand KKR to raise funding that would value it around $500m, per the FT. More here ->
Investtech
Databento, a Salt Lake City financial data startup, raised $10m in Series A extension funding. The company provides real-time and historical market data APIs, offering access to data for various financial instruments such as equities, futures, and options, all through a single integration. More here ->
Crypto
Ellipsis Labs, a Solana-based decentralized exchange developer, raised $21m led by Haun Ventures. axios.link/3OeqaxL More here ->
Insuretech
Delos Insurance Solutions, an SF-based wildfire insurance MGA, raised $9m in Series A funding. It is specializing in wildfire risk assessment and coverage for California homeowners. Leveraging advanced technology and artificial intelligence, they break away from traditional risk analysis methods to provide a higher level of service to residents. More here ->
Proptech
MoradaUno, a Mexican real estate rental platform, raised $5.6m in Series A funding. By leveraging technology and customer-centric solutions, they aim to streamline the rental process for both tenants and landlords. More here ->
From the Stash
Truist developing intelligent router for efficient payments - Truist Financial is developing an intelligent router system that can direct payments quickly through the best payment channel. “Most people just want to tell their financial institution, ‘Just make the [payment] and get it there for me,’” Chris Ward, head of enterprise payments at Truist, told Bank Automation News. Clients “give us the instruction and […] More here ->
Morgan is new chief product, technology officer at Temenos - Tech provider Temenos on Oct. 7 announced Barb Morgan as its chief product and technology officer. In the role, Morgan will prioritize innovation, including products focused on client needs that tap into “AI, cloud and advanced data and analytics,” she said in the Temenos release. Additionally, Morgan will add to Temenos’ ongoing cloud and […] More here ->
Citizens streamlines account openings with in-house solutions - Citizens Bank is moving away from third-party vendors and launching in-house solutions to simplify account opening. The $219 billion bank has developed in-house solutions over the past two years, one business line at a time, to make account opening more intuitive, faster and less paper-intensive, Head of Deposits Chris Powell told Bank Automation News. More here ->
FIS Q3 wins - Technology provider FIS ended the third quarter with the acquisition of payment systems company Dragonfly Financial Technologies, a move that will boost the company’s digital offerings. “Dragonfly complements our digital portfolio, expanding our digital offerings across large financial institutions, including some of the largest regional banks, for which we already have significant relationships,” More here ->
Reports & Webinars
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