Fintech Highlights - 12/28/2022
Pinned to the Top
Klarna CEO Sebastian Siemiatkowski says that the collapse of crypto exchange FTX may encourage financial sector regulation that’ll make it harder for fintech firms to compete against traditional lenders.
Speaking to Bloomberg, he said: “I’m a little bit concerned that these debacles that we’ve seen will again inhibit that and continuously prolong the overly large profitability that we’ve seen in the banking industry.”
There’s not a ton of evidence to support this, but it’s undeniably true that regulators are preparing to take a long, hard look at crypto specifically after years of legislative inaction. The Washington Post reports that the Treasury Department has placed calls to large crypto exchanges to assess the risks of a broader contagion and congressional committees have readied reviews, including a House inquiry that could see FTX founder Sam Bankman-Fried testify under oath next month.
The BFD
News like this doesn’t exactly bolster the case for fintech.
According to the Chicago Sun-Times, “since 2020, more than 3,500 complaints have been filed about San Francisco-based Chime Financial Inc. with the federal Consumer Financial Protection Bureau about closed accounts, unauthorized charges or other issues.
Why this is the BFD: this is mainly related to scammers. Chime accounts have been notoriously used to pay, then “not pay” rental car companies and other categories - leading these companies to not accept Chime debit cards for deposit or bookings. These scams, along with other activities noted above, reduce the freedom clients expect to have enabled by their financial services provider.
The big picture: Most are marked ‘closed with explanation,’ meaning the company resolved them privately with the customer…Some Chime customers who have complained about sudden account closures were shocked to hear that it could take up to a month to get their money back.”
M&A
Arthur J. Gallagher & Co. announces $660M acquisition of Buck
Gallagher announced on Tuesday that it has agreed to acquire the partnership interests of Buck, a provider of retirement, HR and employee benefits consulting and administration services. More here →
Fintech
Over a year after grabbing $4 million in pre-seed funding, Chile-based Kredito, a business lending startup, is back with another $6 million in new funding. The company launched to the public in 2021 and partners with financial institutions to help small businesses with their spend management, access digital unsecured loans, open a bank account and obtain a business credit card. More here →
Opensee, a Paris-based business user analysis platform for financial institutions, raised €11m in Series A funding. The technology allows risk, finance and front office users to manipulate data for simple or complex calculations with embedded analytics for a wide range of use cases, ranging from risk management and regulatory reporting, to trading decisions and ESG analysis. More here →
Aviva, a Mexican lender that enables voice-based credit applications, raised $2.2m in pre-seed funding. Aviva’s approach uses artificial intelligence and natural language processing to match customers’ spoken word to the fields of a real-time credit application. Within minutes, customers can qualify for a nano-business or house improvement loan of up to $1,000. More here ->
Crypto
Arrakis Finance, a decentralized market-making protocol, raised $4m in a seed funding round. Last week, Arrakis Finance launched V2 of its protocol, which can be "thought of as an abstraction layer on top of concentrated liquidity automated market makers (AMMs) like Uniswap V3." More here →
Insuretech
Get Covered, a leading insurance technology provider for multifamily operators, managers, residents and distribution partners, today announced it has raised $14.5 million in total funding after closing a recent investment round. More here →
Evertas, a Chicago-based startup that is focused on cryptoasset and blockchain insurance, has closed a $14 million funding round. More here →
CyberCube, an insuretech that creates “cutting-edge products and solutions to quantify cyber risk” has raised $50M in growth capital financing. The new funding will fuel the commercial development of CyberCube while accelerating go-to-market expansion. More here →
Fountain Life Raises $15M in Funding
Fountain Life, a Naples, FL-based preventative health and longevity company, raised $15M in funding. Fountain Health Insurance, a subsidiary of Fountain Life, covers traditional care, focusing on proactive engagement and preventative care. More here →
Australian insurance startup Butter Insurance has closed a $1.3 million pre-seed funding round. The company offers property, liability and worker's comp insurance to neighborhood businesses like coffee shops, retail stores and fast casual restaurants. More here →
From the Stash
Big Ideas in Tech for 2023: An a16z Omnibus - This time of year, the floodgates open to a deluge of best-of lists and end-of-year recaps. But we at a16z have always been more interested in what’s to come. We asked dozens of partners across the firm to spotlight one big idea that startups in their fields will tackle in 2023. From entertainment franchise games to the precision delivery of medicines, small modular reactors to loads of AI applications, here are 40+ builder-worthy pursuits for the year ahead, according to the a16z team. More here →
AI buzzwords beating those for Web3 in funded startups - Some business plans are in vogue one season and out the next while others show prolonged staying power; Web3 and the broader crypto space, and AI, respectively. For perspective, we charted out funding rounds for the past six quarters. - More here →
Ford striking up insurtech partnerships - Ford has been busy in the insurance and insurtech space lately, striking up partnerships with insurtechs wejo, Cerebrumx and ChromeData, Part of J.D. Power for telematics and vehicle data functions, plus its foray into commercial insurance with Pie Insurance. More here →
Next Insurance to offer employment practices liability insurance for restaurants
Next Insurance, a leading digital insurtech transforming small business insurance, announced its renewed commitment to small business restaurant owners with the expansion of Employment Practices Liability Insurance. More here →
American Express launches B2B payments platform - American Express has launched business-to-business payments network AmEx Business Link, allowing commercial clients to support several types of payments including card, non-card, domestic and cross-border transactions. The API-based solution connects to a variety of technology platforms and provides buyers and sellers the ability to choose in real time how they want to be paid. More here →
By the Numbers: FIs to invest in digital, customer engagement in 2023 - Banks and credit unions will invest in their customer and member engagement offerings in 2023 as more clients desire relationship banking. Financial institutions (FIs) plan to invest in digital improvements, physical branch support, contact center technology, marketing, operations and loan technology, according to the report “ENGAGE 2023: Customer Engagement in Banking: Annual Trends Report.” More here →
5 Questions with … Bank of America SVP Jorge Camargo - Bank of America Senior Vice President Jorge Camargo is focused on delivering a high-tech, high-touch strategy to improve customer experiences. The $3.1 trillion bank continues to invest in both tech talent and in the bank’s virtual assistant, Erica — an effort that Camargo has led. More here →
Reports / Webinars
Roundtable report: Building the partnership economy - Insurance companies are partnering with non-insurance brands to provide customers with better insurance and protection, creating a “partnership economy” where partners can collaborate and compete in the same sector.
This model is expected to grow to 16% of the insurance market, representing up to $5 trillion in revenues, and has already proven to deliver increased reach, efficiency, and customer engagement. Insurtech Insights and Bolttech hosted a roundtable to discuss ways to accelerate this progress.
McKinsey & Co: Opportunities for insurers in a rapidly shifting insurtech market
The market dynamics today, with insurtech players facing headwinds and incumbent insurers benefiting from certain tailwinds, have effectively “turned the tables” across the insurance landscape, putting traditional insurance companies in a much more advantageous position relative to insurtechs. Read More, 1 min read
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