7 min read

Fintech Highlights - 11/29/2022

Plaid hires a key payments exec. Neobank Nubank scorches it's earnings. And embedded fintech Lentra raises a round. Here's what's we're watching this week 👇

Pinned to the Top

iPhone X beside MacBook
Plaid announces a key hire- via Meta

Plaid announced it has hired John Anderson, a former Meta exec, to serve as its first head of payments. The move comes as the fintech startup leans into payments, both in terms of facilitating them itself and aiming to help others do so better and faster.

The first thought that comes up - is that Plaid was taking another swing at Stripe, but currently the two remain partners. Plaid also announced that its Signal offering is out of beta with early users such as Robinhood, Webull and Uphold. It claims that by using Signal, companies can “unlock instant ACH.”

More here →

The BFD

man writing on paper
Nubank’s quarterly earnings illustrates the strength in lending

In contrast to crypto (whoo boy), some segments of the lending market appear to be robust — at least presently.

Nu Holdings, the Warren Buffett–backed Brazilian banking firm that offers credit cards and personal loans and that is more commonly known as Nubank, posted a nearly threefold jump in Q3 revenue on Monday.

Why is this the BFD? While publicly traded Nu has seen its U.S. shares lose over half their value this year, its customer base has grown to over 70 million following a dramatically expanded footprint in Mexico. Nu’s total revenue in Q3 reached $1.3 billion, up 171%, while profit climbed to $427 million, up 90%.

The big picture: Crypto is the big story in fintech right now, but i’s skewing perception of a category that is currently doing pretty well and holding strong in difficult headwaters.

M&A

Chipper Cash, an SF-based cross-border payments company focused on Africa, agreed to buy Zoona, a Zambian online payment and agent services business. Chipper Cash has raised $300m, most recently at a $2.2b valuation, while Zoona raised $25m from firms like AHL Venture Partners, Quona Capital and the IFC.  More here →

Quantifeed, a Hong Kong-based automated investment platform whose VC backers include HSBC, acquired Alpima, a London-based asset management startup that raised $2m from Eight Roads and Fidelity International Strategic Ventures.  More here →

Everyware, an Austin-based integrated, payment and customer engagement platform, was acquired by ELCA for an undisclosed amount. The company previously raised approx. $4M led by TTV Capital.  More here →

KKR has acquired April Group, a French insurer, from CVC Capital Partners, in a deal valuing it at about €2.3 billion ($2.4 billion).

Embedded Fintech

Lentra, an Indian embedded AI-based finance startup, has raised $60 million — a Series B that values the startup at “over $400 million.” Lentra, which is profitable, has been growing at a very fast clip. In 2019, its first year of operations, it registered $1 million from its “annual consumption rate” — this term relates to the amount of revenue Lentra makes based on usage of its APIs. As of this year, that figure is up to $10 million, and it is projected to hit $100 million in 2024. More here →

Fintech Partnerships

Just over a year ago, Wise — the company formerly known as TransferWise — went public on the London market. Now, in search of new growth avenues, Wise is inking an expanded partnership with up-and-coming remote hiring startup Deel to enable companies to pay employees faster (ostensibly). Wise and Deel’s new feature lets customers send funds via Deel using just an email address, opening up new currencies in Deel’s existing payments infrastructure. To take advantage, Deel customers simply need to open an account with Wise and connect it to the Deel platform.  More here →

Fintech startup Bump and Mastercard are collaborating on a new card aimed at musicians and content creators (think TikTok influencers). How does one build a card for creators, you might ask? Well, in Bump’s case, they do away with monthly fees and credit checks, factoring in things like a customer’s web3 assets (e.g., cryptocurrencies, NFTs) when determining credit limits. There’s plenty of other cards out there that don’t require a credit check, and at least one startup, Spectral, is attempting to create a system of web3 “credit scores.” But Bump’s offering is intriguing nonetheless.  More here →

Fintech

Taktile, a NY based startup that helps fintech companies test and deploy decision-making models, raised $20M.   Taktile offers a no-code interface that allows nontechnical employees to build, adjust and evaluate decision flows. An example: Say a bank wanted to tweak its lending criteria by moving the minimum age to apply for an account from 25 to 21. Taktile would let the head of credit at the bank back-test the change and analyze its impact before actually implementing it. More here →

Prosper, the SF-based lending platform, raised $75m. Prosper Marketplace offers peer-to-peer lending solutions including personal loans, credit cards, home equity products, and investment products.  In the third quarter, the company facilitated over $1 billion of personal loan originations (over 2x year-over-year growth) through its platform. Prosper now has over 150,000 customers for its credit card product that launched last December and recently launched a new fixed-rate home equity loan product that complements its existing home equity line of credit product.  More here →

PayZen, an SF-based provider of health care financing tools, raised $20m in equity funding led by 7wire Ventures (plus another $200m in debt from Viola Credit). PayZen uses data and AI to create individualized patient payment plans that families can afford, and they fund providers up-front for all billings regardless of a patient’s credit score.  More here →

StellarFi, a credit-building service that makes bill payments on your behalf and reports them to the major credit bureaus, is on the upswing. The company announced this week that it has surpassed $1 million in annual recurring revenue just five months after launch and that its customer base has grown 83% during the past month.   More here →

Revere Partners, a venture capital fund focused on oral health, announced that the fund is investing more than $10 million in fintech for the dental industry, including in startups such as Choice Payment Services, Walnut, FeatherPay, Plan Forward, Zuub, AirPay, and Tuuthfairy. All of these investments from Revere were completed in 2021-2022, with more investments in fintech closing in Q4 2022, and several more in the category expected in 2023.  More here →

Ramani, a Tanzanian fintech focused on Africa’s consumer packaged goods supply chain, raised $32m in Series A equity and debt funding. The company provides inventory management systems, procurement and point-of-sale software to its network of micro distribution centers (MDCs), enabling them to enhance the management of their inventory and operations.  More here →

Flourish Fi, the San Francisco-based bank focused SaaS startup, has raised $2.3m in seed funding.  Flourish Fi offers a low-code SaaS model with three modules: a rewards engine that banks can tailor to incentivize users when they complete tasks like saving or paying bills on time; a financial knowledge module where customer account insights and spending patterns are turned into a question-and-answer game; and an intelligence hub that provides the financial institution with new insights on its consumers and helps drive business decisions.  More here →

Sella pilots biometric credit cards. The pilot project is being led by Sella Personal Credit, Sella group’s unit specialising in credit for families and will target select customers based in Italy. More here →

ClearBank,  the enabler of secure accounts, real-time clearing, and Embedded Banking for financial institutions,  announced that it has reached profitability. The fintech bank has nearly tripled its 2022 YTD revenue compared to the same period last year. And FY2021 was the second consecutive year that ClearBank’s revenue grew by over 100%. More here →

Nirvana Money shuts after just 22 days. More here →

Djamo, a Cote d’Ivoire-based fintech startup, raised $14m in funding. The company provides financial services for the underbanked and unbanked population. Its focus is on French-speaking markets where fewer than 25% of adults have bank accounts. More here →

Crypto

Nucleo, a New York-based crypto infrastructure security startup, raised $4m in seed funding. The company seeks to create a private multi-sig solution for organizations to transact on the Ethereum blockchain through zero-knowledge cryptography.  More here →

Insuretech

Surround Insurance, an InsurTech passionate about changing the insurance experience for consumers in their 20s and 30s, has raised $2.5M in seed funding. Surround has designed its experience around transition moments for customers like leaving the parental nest for college, establishing life in the city, or making a first-time car purchase. More here →

From the Stash

Tesla Insurance is available in Minnesota - Making it now available to drivers in 12 states with the recent addition of Minnesota.The insurance program, similar to other states with the exception of California, leverages telematics data to provide policyholders with dynamic rates.  More here →

Scaling with purpose: 4 ways to future-proof banking - The importance of customer experience has increased exponentially over the past few years as people bring more aspects of their lives online. This year, more than 65% of Americans are using digital banking as their preferred banking method, according to a May 2022 survey published by Statista. So, what does this mean? Financial institutions must adapt and follow suit by prioritizing a digital customer experience in order to thrive.  More here →

Venmo adds in-app charitable donations, redesigned ‘send money’ screen - PayPal-owned Venmo is today rolling out two changes to its peer-to-peer payments app, including the ability to donate to charities through Venmo as well as a redesigned money-sending experience. More here →

Here’s How Far Fintech Funding Has Fallen - Last year, financial services was the leading sector for venture investment, with at least $131 billion globally going into startups in the space. This year, the industry still ranks among the largest recipients of venture capital funding. However, investment to startups in the space has been dropping every quarter this year, with Q4 likely to be the lowest yet.  More here →

What Goes Up Must Come Down - Thousands of employees — and many consumers — are paying the price.  More here →

Despite being the world’s largest prepaid debit card company by market cap, Green Dot usually flies under the radar. But the firm has faced challenges in recent months, disclosing that it’s in a dispute with Uber — one of its contract customers — and that “several” of its banking-as-a-service clients declined to renew their contracts this summer. In a shake-up aimed at righting the ship, Green Dot named a new CFO, COO and chief revenue officer this week and said it was focusing on tech modernization, including a move to a cloud-based core banking platform and card management system.  More here →

Webinars / Reports

Highly-digital insurance agencies grew 70% faster than counterparts - Liberty Mutual and Safeco Insurance released The State of Digital in Independent Insurance Agencies, which highlights how digitization is necessary to stay relevant, but most agencies have slowed adoption of digital tools since 2020.  More here →

State of the Markets Report H1 2022 - The State of the Markets highlights the latest trends for an innovation economy that reached new heights in 2021 with venture investment doubling to a record $333 billion. Here are three takeaways from the report: More here →

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