Fintech Highlights - 12/12/2023
Who will be the next Mint? Robinhood sees increased crypto activity. Canadian startups Koho and Virtuo raise big rounds. Here's what we've been watching this week 👇
Pinned to the Top
When Intuit announced it would shut down personal finance app Mint in January, it was a chance for competitors to grab a portion of Mint’s over 3 million users.
However, one investor says companies shouldn’t try to be the next Mint.
Sheel Mohnot, co-founder and partner at Better Tomorrow Ventures, tweeted on X, “Heard of a few people building a new version of @mint now that Intuit shut it down. I wouldn’t recommend it if you want to build a venture-scale business. There aren’t that many people who want to actively manage their finances; startup graveyard is littered with PFM’s.”
Yes, Mohnot is most likely biased. He is, after all, an investor in finance tracker Albert. Yet, Mohnot said years ago he looked at many of the concepts being built with the aim of competing with Mint — Albert included - and found.
“Seven or eight years ago, there were a ton of funded companies, all seed-funded, with some even raising a Series A,” Mohnot said. “However, none of them hit any sort of scale with the PFM (personal finance management product). They all had to pivot into something else to make it work.”
It is widely reported that most Americans will have trouble if an unexpected $400 bill comes up. So actively managing your money — and a free product to boot — can be attractive. Except that, as it turns out, it isn’t.
Mohnot explained that Albert founders also had to shift strategy when they realized that people don’t actually want to manage their own money. They want a solution to do it for them.
“The AI manages their money, and there’s a lot more people who want that,” Mohnot said. “They have hundreds of millions in revenue to show that.”
So should companies try to be the next Mint? A free product, like Mint was, is most likely not going to yield a “venture-scale business,” according to Mohnot.
The BFD
Robinhood’s crypto trading volume surged 75% in November compared with one month prior, according to preliminary trading data the company disclosed on last week, while its stock trading volume remained relatively flat.
Why this is the BFD: The spike comes as crypto prices have surged in recent weeks, with the price of bitcoin rising more than 20% over the past month and topping $42,000 in recent days, highs not seen since before the popular terraUSD and luna cryptocurrencies collapsed in May 2022. Robinhood’s update today suggests it processed around $4 billion in crypto trades last month, based on its previously disclosed October total, the most since FTX collapsed in November 2022.
The surge in crypto investor enthusiasm has likely also boosted trading volumes on crypto exchange Coinbase, which has seen its stock price surge more than 60% over the past month.
The big picture: Every week we read somethign about the demise of crypto. Regulatory challenges, fraud exposures, etc all provide signals. Yet crypto continues to be interesting for traders as an asset class.
M&A
Worldline (Paris: WLN), a French digital payments firm, is considering asset sales, per Reuters. More here ->
Mercer Advisors, an RIA majority owned by Oak Hill Capital and Genstar Capital, acquired Jacksonville, Fla.-based Paragon Wealth Strategies. More here ->
Constellation Wealth Capital invested in AlphaCore Wealth Advisory, a La Jolla, Calif.-based RIA focused on alt assets. More here ->
Nearmap, an Australian portfolio company of Thoma Bravo, agreed to acquire Betterview, an SF-based property intelligence and risk management startup that had raised $34m in VC funding from firms like Nationwide Ventures, Guidewire Software, and ManchesterStory, Runway Venture Partners and Alumni Ventures. More here ->
FG Merger III, a blank check company targeting the financial services industry in North America, filed to raise up to $150m in an IPO. More here ->
AXA (Paris: AXAF) is weighing the sale of some of its Western European protection insurance businesses for upwards of €1b, per Reuters. More here ->
BAWAG Group of Austria is the frontrunner to buy the German consumer finance unit of Barclays (LSE: BARC), per Reuters. More here ->
ZestMoney, an Indian BNPL startup that raised over $125m in VC funding, has shut down. Backers included Goldman Sachs, Quona Capital, Zip Co., PayU, Ribbit Capital, Accion and Regal Partners. More here ->
Fintech
KOHO Financial, the Toronto-based challenger bank, raised C$86m in Series D extension funding at a C$800m valuation. KOHO describes itself as an alternative banking provider looking to enable financial balance” for all Canadians. It offers full-service individual and joint banking accounts. More here ->
January, a New York-based debt collection startup, raised $12m in Series B funding. According to January, its technology allows it to be 120x more efficient than traditional debt collection agencies with a 92 percent completion rate on payment plans. More here ->
Spade, a New York-based fintech fraud prevention startup, raised $10m in Series A funding. Spade claims that it cleans and enriches transaction data in real time through first-party data sets. Transactions are matched one-to-one with actual merchant identities, categories and geolocations. They are also enriched with details such as logos, business hours and spending histories to give a fuller picture of a purchase. More here ->
Necto, a New York and Singapore-based corporate banking API aggregator, raised $8m in seed funding. Necto's API aggregator homogenizes the various corporate bank API standards into a single, unified, secure, and easy to integrate format. More here ->
Plum, a London-based money management app, raised €5m. Plum is the ultimate smart money app, helping over 1 million people to invest, save and manage their spending with automation. More here ->
Rich Data Co., an Australian credit risk decisioning firm, raised A$28m in Series B funding. RDC provides an AI decisioning platform for lenders to access to insight into borrower behaviour, enabling decisions that empower Business and SME lending. More here ->
Banxware, a German lending-as-a-service startup, raised €15m in Series A funding. Banxware is a leading fintech using embedded lending to drive growth for platforms by supporting their sellers with fully digital business loans. More here ->
Solvento, a fintech company serving Latin America's trucking sector, raised $3.5m in seed extension funding. It also secured a $50m debt facility from Lendable. Solvento's platform aims to strengthen the supply chain by providing tools that are dependable, flexible, and simple to use. Solvento automates payments, finances invoices, and meets truckers' liquidity needs More here ->
Navadhan, a Mumbai-based rural fintech, raised $5m in pre-Series A funding. Navadhan Capital is connecting small rural businesses with financial resources. With a network of 18 lending partners. More here ->
Bujeti, a Nigerian corporate card startup, raised $2m in seed funding led by Y Combinator. More here ->
More funding announcements:
Kyle Wiggers
Ivan Mehta
Tage Kene-Okafor
Kyle Wiggers
Romain Dillet
Meir Orbach
FinSMEs
Investtech
Pontera, a New York-based wealth management startup, raised $60m in funding. The company is making it possible for financial advisors to actively manage 401(k) and other held away accounts. More here ->
Scalable Capital, a German l digital investment company, raised €60 million in additional Series E funding at a $1.4b valuation. More here ->
Crypto
Babylon, a Bitcoin staking protocol, raised $18m. The Babylon protocol will allow bitcoin holders to stake their coins on proof-of-stake blockchains and earn yield. More here ->
Insuretech
Mulberri, a Sunnyvale, Calif.-based business insurance startup, raised $6.75m in Series A funding. Mulberri is an AI-powered intelligent business insurance platform that PEOs, brokers, small-medium businesses, and carriers trust to help them be more efficient and productive when writing business policies. More here ->
Igloo, a Singapore-based insurtech, raised $36m. The company offers their customers insurance products that provide protection on electronics and coverage on accidents and travel.. More here ->
Proptech
Virtuo, a Calgary-based homeownership concierge platform, raised C$3.5m in seed funding. The company was founded three years ago with the express purpose of smoothing out those potholes to take the stress out of the relocation adventure. More here ->
Simply Homes, a Portland, Maine-based single-family rental sourcing and underwriting platform, raised $22m. More here ->
From the Stash
Fintech funding: Digital lending startups lead with 70% jump - Digital lending startup funding drove global fintech funding rounds during the third quarter as automated lending strategies gained investor attention. Funding for these startups reached $1.7 billion in Q3, up 70% sequentially, according to CB Insights’ State of Fintech Q3 report published in October. More here ->
Twilio Lays Off 5% of Workforce - Software company Twilio is cutting 5% of its workforce, the company said Monday, in its third round of layoffs since September of 2022. The cuts affect about 300 employees in Twilio's data and analytics business, according to regulatory filings.In an address to "Twilions" — the company's term for its employees-CEO Jeff Lawson blamed the cuts on lackluster growth in its data unit, which recently lost its president Elena Donio. "Last year, we made the decision to invest, ahead of growth, in go-to-market for Segment," Lawson said. "Unfortunately, that bet hasn't led to the growth outcome we'd hoped for. As a result, we're simply spending too much." More here ->
Citi taps Traydstream for document processing - Citibank is looking to reduce manual processing risk and costs by utilizing document processing company, Traydstream to automate document information processing and document creation. “The reliance on paper in the trade industry needs to reduce and we see the next few years to be transformative." More here ->
Amazon Dropping Venmo as a Payment Method - Amazon is removing Venmo as a payment option next month, according to Venmo’s website. The retail giant alerted customers to the change on Wednesday via email. Amazon will reportedly continue to accept Venmo-branded credit and debit cards. Amazon began accepting payments from Venmo last year. Its reversal is a blow to Venmo owner PayPal’s efforts to broaden Venmo’s usage beyond payments between friends, which don’t produce revenue for PayPal unless a user pays a fee to more quickly transfer their Venmo balance to their bank account. But merchants who accept payments from Venmo accounts pay a fee on every transaction. On PayPal’s third-quarter earnings call, CEO Alex Chriss said it is “very important” for PayPal to increase the number of merchants that accept Venmo. More here ->
More from the stash:
PYMNTS
Reports / Webinars
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