Fintech Highlights - 2/6/2024
Brex reduces headcount. The FSB is recommending changes to current liquidity rules. Sunbit raises a round. Here's what we've been watching…. 👇
Pinned to the Top
What goes up must come down.
For spend management startup Brex, this was the case for its employee headcount.
While interest rates were low, the company saw a bump in business and VC money was easier to come by. Its headcount had swelled to about 1,300 before it laid off staff in October of 2022.
As things have come down to earth, Brex is attempting a reset, announcing recently that 282 employees, or nearly 20% of its staff, in a restructuring.
The move came after reports the company burned $17 million in cash each month during the fourth quarter and that it is trying to preserve runway.
The BFD
The FSB is due to bring a report to the next G20 convention in October recommending changes to current liquidity rules.
These changes are a response to the collapse of Silicon Valley Bank (SVB) in 2023, which saw $42 billion of deposit outflows in just 10 hours.
The FSB are thought to believe the influence of social media played a significant part in the scale and escalation of the SVB run.
Why this matters: The Financial Stability Board is an international body that monitors and makes recommendations about the global financial system.
Its membership includes all G20 major economies. It cannot enforce regulation, but its recommendations can set the blueprint for each jurisdiction to follow.
Liquidity and capital requirements were raised around the world following the 2008 financial crisis. This extra buffer gives banks a cash buffer in the event of a run, which is highly unlikely but can be fatal if it happens.
The FSB are now thought to be considering the impact of social media to identify vulnerabilities in the current rules, and recommend changes.
What's next? The full report and any recommendations will not be presented until the next G20 in October, but expectations have now been set.
It is likely that any recommendations will involve raising liquidity requirements, to mitigate the impact of more recent factors such as social media, which was not a concern back in 2008.
Assuming countries heed the FSB’s advice, this could put a strain on smaller institutions, but there will also be a lengthy window to implement any changes.
M&A
Aadhar Housing Finance, an Indian home lender owned by Blackstone, plans to raise up to $650m in an IPO at a $3b valuation, per Reuters. More here ->
Ramp, a New York-based corporate finance automation startup valued by VCs at $5.8b, acquired procurement startup Venue, which was seeded by Sequoia Capital, Exponent Founders Capital, and Basecase Capital. More here ->
Barclays (LSE: BARC) is speaking with PE firms about buying a majority stake in its British merchant payments unit, after talks with strategics were unsuccessful, per Reuters. More here ->
Fosun International is considering a sale of its 10% stake in Ageas, Belgium's largest insurer, which is valued at nearly $800m, per Bloomberg. More here ->
Achmea, a Dutch insurer, reportedly is considering a sale of its life insurance unit, which could fetch around €3b. More here ->
FTX debtors are asking a bankruptcy court to approve a sale of Digital Custody, which FTX acquired in 2022 for $10m, for just $500k to CoinList. More here ->
FinZi, the Colombian fintech company, has been acquired by Girasol Payment Solution. More here ->
Fintech
Nasdaq Private Market, a provider of liquidity solutions to private companies, raised $62.4m in Series B funding. Nasdaq led, and was joined by BNP Paribas, DRW VC, UBS, and Wells Fargo. It offers a range of services, including a trading marketplace, liquidity programs for employees, and data and analytics for informed trading decisions. More here ->
Mia Share, a Sheridan, Wyo.-based payments and collections services to trade and technical schools raised $6.5m. The company partners with schools to offer technology solutions aimed at managing affordable student financing. More here ->
Metronome, a SF-based provider of usage-based billing solutions for software companies, raised $43m in Series B funding. The company's platform is designed to help businesses move faster by reducing the engineering effort typically required for billing and empowering business and product teams to fully own revenue and pricing. More here ->
Sunbit, the fast-growing Buy Now Pay Later (BNPL) provider has raised a significant US$310m in a debt warehouse facility led by Citi Group with participation from Ares Management. The fintech aims to use these funds to expand its BNPL offering. Today, 40% of Sunbit’s market is in BNPL services for auto repair, and it is growing its patient financing services in dentistry. More here ->
Digital Onboarding has grabbed $58M to help banks with profitable customer engagement. Communications from financial institutions is often paper-based, which often leads to between 25% and 40% of new checking accounts closed within the first year. This SaaS startup wants to fix this. More here ->
Kashable banks $25.6M to offer employment-based lending: More employers are adding financial products to their employee benefits and perks, and many startups have jumped into this sector to help. Fintech company Kashable is the latest.More here ->
Tandem gives ‘modern couples’ app to manage finances together and separately: Meet Tandem — a new fintech startup that addresses the first financial milestones for couples and grows with the relationship – which just raised $3.7 million. More here ->
More funding news:
Christine Hall
Investtech
Finvest, an SF-based app for investing in U.S. treasuries, raised $2.7m. The app allows users to purchase, manage, and sell U.S. Treasury Bills seamlessly, providing directaccess to these government-backed securities. More here ->
Charlesbank Capital Partners committed $250m to Rise Growth Partners, an Austin, Texas-based "financial partner" for registered investment advisors. More here ->
Integral, a Palo Alto, Calif.-based forex trading startup, raised $30m in growth financing from Vistara Growth. More here ->
Marstone, a Providence, R.I.-based investment and wealth planning firm, raised $8m in Series B financing. It was founded in 2013 and is an independent provider of digital wealth solutions, offering a platform that enables organizations to provide digital wealth services to their clients, including the creation of personalized investment portfolios and financial aggregation tools for comprehensive financial planning More here ->
Mesh, an SF-based embedded finance solution for digital asset transfers and account aggregation, raised $6.5m led by PayPal Ventures. More here ->
Insurtech
Rainbow, the managing general underwriter targeting the restaurant industry, has raised $12 million. Founded in 2021 and based in California, Rainbow’s flagship program, an admitted business owner’s policy product tailored to the restaurant industry, is currently live in 8 states and expected to be available in over 25 states in 2024. More here ->
Wisedocs, a Toronto-based document processing platform for insurance claims, raised US$9.5 million in Series A funding led by Information Venture Partners, per Axios Pro. More here ->
Indemn, a New York-based provider of insurtech product configuration and underwriting solutions, raised $1.9m in pre-seed funding. More here ->
AVLA, a leading provider of surety and trade credit solutions, has successfully raised $25 million in funding. AVLA is recognized as one of theleading surety and trade credit insurance companiesin Latin America, with a presence in four countries in the region. More here ->
CarbonPool, founded by former Allianz executives, has successfully concluded a significant funding round aimed at revolutionising the carbon credit market. More here ->
Proptech
Closinglock, a fintech and fraud prevention technology provider for the real estate industry, raised a $12M Series A. The company previous raised a $4M seed round led by LiveOak in August 2022. More here ->
From the Stash
P2P market to reach $6.2B by 2028 - The peer-to-peer payments market is growing as consumer demand ticks up and new competitors enter the space. P2P payment market size is expected to reach $6.4 billion by 2028, according to a January report by market research group The Business Research Co. More here ->
Fintech, oh, fintech. Last year wasn’t easy on you - Fintech investors injected $34.6 billion in startups across 2,055 deals in 2023, a –43.8% and –32.4% YoY drop, respectively, according to PitchBook data. Valuations also mostly dropped, with the median of $19.4 million, down –13% from 2022’s median. Exits also took a dive, with just $5.9 billion in exit value generated across 185 deals in 2023, a decrease of –76.1% and –22.3% YoY, respectively. But Q4 was a good one. According to CB Insights, fintech saw eight new unicorns during the period and equity funding increase by double-digit percentages.
PayPal will begin piloting a few new upcoming updates to its service - some of which will leverage AI-driven personalization. The company is introducing a new “CashPass” cash-back offering called “Smart Receipts,” with personalized recommendations, among other things. More here ->
12 Top Investment Rounds: Insurtech Funding off to a Flying Start in 2024 - Insurtech investment has seen a lot of challenges over the past 12 months, but January 2024 has seen some impressive raises from seed to series B. Insurtech Insights reports. More here ->
Deutsche Bank simplifies workflows, automation to reduce headcount - Deutsche Bank is reducing costs bankwide through automation and technology efforts. The $578 billion, Germany-based bank is using simplified workflows and automation on the front end and application decommissioning and operation model improvements on the back end, Chief Executive Christian Sewing said during today’s Q4 earnings call. More here ->
Banks in talks to finance $13billion DocuSign buyout deal - Several Wall Street banks including JPMorgan Chase & Co. and Bank of America Corp. have held talks to provide as much as $8 billion in financing for a buyout of DocuSign Inc. that values the company at around $13 billion, according to people with knowledge of the matter. More here ->
Earnings roundup: FIs trim headcount, increase tech spend - Major U.S. banks released fourth-quarter earnings over the past month showcasing that they looked to reduce costs – but not necessarily on tech spend as digital banking usership increased. JPMorgan saw its tech, communication and equipment expense spend jump 7% year over year to $2.4 billion. More here ->
Apple reports record revenue from payments, cloud services - Apple reported record payments and cloud revenue that contributed more than 19% of the tech giant’s overall revenue growth. Revenue from the services, which include iCloud and Apple Pay, was $23.1 billion in its fiscal first quarter, up 11.3% year over year, according to the company’s earnings statement released Feb. 1 More here ->
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