Fintech Highlights - 11/19/2024
Here's what we've been watching this week 👇
Pinned to the Top
Jack Dorsey’s payments fintech Block is negotiating a potential settlement with several state regulators that have probed the company’s anti-money laundering and other compliance programs, adding to the legal problems the Cash App and Square parent is facing.
Block disclosed the new regulatory matter in its third-quarter results released on Thursday, which showed the company’s revenue growth slowed to 6% for the three months through September, bringing in $5.98 billion. Revenue had grown 24% during the same period a year earlier. Block reported net income of $284 million for the quarter, a turnaround from a $89 million loss a year earlier.
Block said it was engaged with state money transmission license regulators to determine whether it could settle problems raised during their investigation and has earmarked money for a potential fine. Separately, the Consumer Financial Protection Bureau has launched action against Cash App’s handling of customer complaints, while the Securities and Exchange Commission and the Department of Justice is investigating the company’s compliance and risk practices.
The BFD
Instalment lender Klarna has filed confidentially for a U.S. initial public offering, the company announcedTuesday. The number of shares and the pricing for the potential offering have not been set, Klarna said.
Klarna was valued as high as $46 billion in 2021, amid a surge in e-commerce and fintech investment, but slashed its valuation to $6.7 billion in a funding round the next year. More recently, mutual funds and secondary trades have valued the company around $10 billion. Sequoia Capital is the company’s largest outside shareholder and controls just over 20% of the company, according to Klarna’s 2023 annual report.
Stockholm-based Klarna has returned to profitability after losing money while the company expanded aggressively over the past few years. Klarna’s revenue grew 27% from a year earlier in the six months ending in June to $1.23 billion, up from a 15% increase in the same period last year. (See The Information’s Klarna org chart here.)
M&A
Bremer Financial, a Minnesota bank with $1.35b of equity capital, is seeking a buyer, per Bloomberg. More here ->
ServiceTitan, which sells software to help tradespeople such as plumbers, electricians and landscapers run their businesses, filed paperwork for an initial public offering. The filing showed that the company’s revenue grew 31% to $614 million in the 12 months to January 2024 but lost $195 million during the same period. Its top-line growth rate slowed to 24% in the six months ending in July. More here ->
Bumper, a British auto financing startup, acquired AutoBI, a provider of business intelligence tools for auto retailers and OEMs. Bumper has raised about $100m from backers like Autotech Ventures, Shell Ventures and Porsche Ventures. More here ->
Vertafore has announced its acquisition of Surefyre, a leading submission and underwriting platform designed to empower Managing General Agents (MGAs) and wholesalers. More here ->
Fintech
Affiniti, a provider of co-branded credit cards for SMBs, raised $11m in equity funding. The company partners with trade associations to offer customized credit cards with industry-specific features, rewards, and benefits. This unique approach enables Affiniti to tap into a largely underserved market of SMBs that are customers of traditional community banks. More here ->
Trolley, a Canadian payouts platform, raised US$23m in Series B funding. Founded in Canada in 2015 as Payment Rails, Trolley offers a comprehensive solution for businesses to automate and manage payouts, collect recipient tax and banking information, and mitigate fraud and risk. More here ->
Neo Financial, a Canadian challenger bank, raised C$360m in Series D funding. Notable are the investors in this round, with investments via prominent Canadian technology founders including Tobi Lütke (Shopify), Stewart Butterfield (Slack), David Baszucki (Roblox), and Mike Wessinger (PointClickCare). More here ->
Ualá, an Argentine challenger bank, raised $300m in Series E funding at a $2.75b valuation. The bank provides a mobile application for managing a Mastercard prepaid debit card and other financial services. More here ->
Brazilian fintech Tako is emerging from stealth with a $13.2 million seed round co-led by Ribbit Capital and Andreessen Horowitz. Tako’s employee life cycle platform automates tasks like onboarding and payroll to save companies time and bring employee information into one place. More here ->
Cometa, a Mexican payments platform for education, raised $12m. More here ->
Lean Technologies, a Saudi fintech infrastructure platform, raised $67.5 million in Series B funding. It provides a universal application programming interface (API) for fintech companies and third-party service providers to access their customers’ bank data and initiate real-time payments. More here ->
SmartBank, a Japanese personal finance management app, raised around $19m in equity funding from SMBC. Founded in 2019 by Shota Horii, his twin brother Yuta Horii, and Jun Taketani, SmartBank aims to address the unique financial needs of dual-income households in Japan, where traditional banks often lack joint account options. More here ->
Ooodles, a U.K. fintech focused on IT procurement, raised $2.7m. More here ->
Marosa, an accounting SaaS for invoicing and compliance, raised €12m.More here ->
Lerian, a Brazilian core banking startup, raised around $3.2m. More here ->
Satispay, an Italian payments startup, raised €60m. It that has developed a mobile payment network, allowing users to make everyday payments conveniently and securely. The startup has gained significant traction, exceeding €1 billion in valuation and becoming Italy’s second unicorn. More here ->
Equal has raised a Series A round of $10 million at a post-money valuation of $80 million to scale its operations. The Hyderabad-based startup aims to address India’s growing cyberfraud problem with its suite of identity verification and financial data-sharing products. More here ->
Investtech
Fractional, a startup enabling users to co-invest in properties together, raised $15m in Series A funding. More here ->
Zeplyn, an AI assistant for financial advisors, raised $3m in seed funding. The platform, commercially released in January 2024, aims to streamline wealth management workflows by automating meeting preparation, note-taking, and follow-up tasks. More here ->
Big xyt, a London-based provider of data analytics for financial markets. More here ->
QPLIX, a German provider of wealth management software for family offices and private banks, raised €25m. More here ->
Crypto
Folks Finance, a cross-chain DeFi platform, raised $3.2m in Series A funding at a $75m valuation. More here ->
Insuretech
ECI Partners invested in Insurance Insider, a London-based insurance industry content provider. More here ->
Delos Insurance Solutions, a property insurance managing general agent (MGA) focused on wildfire-prone areas, has successfully raised $9 million in a Series A funding round led by HSBC Asset Management. More here ->
Proptech
MoradaUno, a proptech company that aims to make it easier to rent apartments in Mexico, just raised a $5.6 million Series A round co-led by Flourish Ventures and Cometa. The funds will be used to help with expansion, co-founder and CEO Santiago Morales told TechCrunch. More here ->
⚡ Kugu, a German proptech focused on energy management, raised €8.5m in Series A funding . More here ->
From the Stash
BNY, Citizens, Truist train employees on AI - Financial institutions and tech providers are teaming up to develop training programs to help bank employees navigate new AI-driven technology. As banks look to AI to gain efficiencies, employees must get on board, Srinivasan Seshadri, global head of financial services at tech provider HCLTech, told Bank Automation News, adding that FIs “want to do more […] More here ->
Skyla Federal Credit Union speeds up digital onboarding by 70% - Skyla Federal Credit Union switched consumer loan operating systems in July to meet growing demand for digital loan applications. “We are seeing an uptick in online applications,” Geri Hopkins, chief operations officer at Skyla Federal Credit Union, told Auto Finance News, a sister publication to Bank Automation News. The Charlotte, N.C.-based credit union selected online […] More here ->
Capital One, FIBT and Truist tap personalization for deposit retention - Banks are leaning on technology to provide personalized services to retain consumer deposits as the Federal Reserve shifts to lowering interest rates. Consumers will tap their savings and use that money for investments, Udi Ziv, chief executive of fintech Personetics, told Bank Automation News. More here ->
Skyla Federal Credit Union speeds up digital onboarding by 70% - Skyla Federal Credit Union switched consumer loan operating systems in July to meet growing demand for digital loan applications. “We are seeing an uptick in online applications,” Geri Hopkins, chief operations officer at Skyla Federal Credit Union, told Auto Finance News, a sister publication to Bank Automation News. More here ->
Citizens digital tools offer intuitive experience - Citizens Bank continues to focus on building out its in-house solutions, adding digital tools to help clients move toward more intuitive banking options. This year, the $219 billion bank in August launched a digital scheduler within its mobile app for: Online appointments; Financial advice; and Financial planning tools. More here ->
Nvidia developing a full-stack gen AI strategy for FIs - Chipmaker Nvidia is executing a full-stack gen AI strategy to expand its services to the financial services industry, evidenced through its product launches and acquisitions. The financial services “market appears to be moving toward what we call ‘full stack, AI dominance,’” Adya Pandey, intelligence analyst at data company CBInsights, said during a recent webinar. More here ->
Reports & Webinars
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