Fintech Highlights - 3/15/2022
👋 Thanks again for subscribing.
This week's edition is chock full of funding announcements. Buckle your seat belt in and get ready......👇
Looking for a company from a past edition? Find 'em here ->
Pinned to the Top
A new study of Americans' checking account relationships underscores the growth of digital banks and fintechs like Chime, PayPal, and Square—and the decline of megabanks like Bank of America, JPMorgan Chase, and Wells Fargo.
Some top level findings from Cornerstone Research / Ron Shevlin:
- The percentage of Americans whose primary checking account is with a digital bank has skyrocketed since 2020
- Megabanks’ primary customer share is plummeting
- Community banks are making a comeback
- Credit unions aren’t keeping pace
So what is actually happening to explain the above?
- Digital banks aren’t the “challenger” banks, anymore
- Consumers are looking for a different kind of account
- Checking account usage is becoming specialized
- Gen Z is flocking to PayPal and Cash App
- Personal relationships still matter
If you want a great snapshot on what's happening in the market - have a look ->
The BFD
Buy now, pay later firm Sezzle, which is to be acquired by rival Zip, is laying off 20% of its North American workers this year.
The cuts are an effort to save around $10 million as the company focuses on moving closer to profitability, Sezzle said in a statement on Thursday.
Sezzle said the redundancies were part of its effort to position the business for long-term growth while establishing a path toward profitability and free cash flow.
Why this is the BFD? BNPL companies have, to date, have painted a pretty rosy picture of their businesses via strong customer adoption. However recently there has been some consolidation (i.e. Square / Afterpay, etc) in the space, and obvious need to reduce costs and free up cash to continue to make loans.
The big picture: "Sezzle has experienced significant growth in its history and is now at an important juncture. Sezzle's growth prospects remain unchanged and these actions position the company to maximize its long-term success," Sezzle Chief Executive Charlie Youakim said.
Fund Announcements
Portage Ventures, a Canadian fintech VC firm, raised US$616m for its third fund. More here ->
S3 Ventures of Austin, Texas, raised $250m for its seventh fund. More here ->
Bain Capital Ventures raised $560m for its debut crypto fund, which can buy both startup equity and tokens, and unveiled a dedicated crypto team. More here ->
M&A
Public.com, a social investing company valued by VCs at $1.2b, bought Otis, a fractional investing platform for NFTs, art and collectibles. More here ->
Fintechs
Propel, a fintech startup that helps users keep track of food assistance and other government benefits, raised $50m in Series B funding. Propel is building financial tech for this often-neglected group through Providers, a mobile app that allows users to track their food stamps, government benefits and cash balances without having to call a 1-800 number or consult a government website. More here ->
Stax, an Orlando, Fla.-based payments platform, raised $245m at a $1b valuation. Since it was founded in 2014, Stax’s payment processing technology has powered more than $23 billion in transactions for businesses. The company last year made a majority investment in Canadian billing management software firm Fusebill, and the influx of capital will enable Stax to further grow its international customer base. More here ->
DataRails, a New York-based financial planning and analysis platform for Excel users, raised $50m in Series B funding. The company has built a set of financial planning and analytics tools for those users, so that they can get more out of their numbers on Excel (or whatever spreadsheet app is being used, for that matter). More here ->
Stilt, an S.F.-based provider of fintech services for immigrants, raised $14m in Series A. It also secured a $100m debt facility. The capital raises coincide with the company’s launch of Onbo, which it describes as a “credit-as-a-service” product “that allows any business to build and offer a credit product, without needing a bank sponsor in the background.” It also comes on the heels of a 4x increase in annual recurring revenue in 2021, the company said, although it declined to reveal hard revenue figures. More here ->
Branch, a Minneapolis-based payment platform for contract workers, raised $75m. Branch’s mission is to give companies a more cost-effective, faster way to pay employees and contractors, which in turn theoretically can maybe help them attract and retain talent and save money compared to using traditional payment methods. It acquires users by partnering directly with employers or tech partners. More here ->
Proof Technology, a Denver-based legal document filing and processing startup, raised $7m in Series A funding. Proof Technology provides a legal industry platform that directly connects law firms, attorneys general and pro se parties directly with process servers for the physical delivery of legal documents. More here ->
AutoFi, an S.F.-based auto financing startup, closed $85m. AutoFi is in the midst of a four-year streak of 100% revenue growth, doubling the size of its staff in 2021 to 220 employees, processing more than one million auto finance requests that resulted in more than $3 billion in vehicle sales last year, according to the company. More here ->
Sila Inc., a fintech software platform that provides payment infrastructure as a service, today announced that it partnered with Corpay, a FLEETCOR brand that provides integrated cross-border payments and currency risk management solutions. This partnership will expand Sila’s cross-border payment capabilities and access to global FX markets for its customers by providing them with access to 145+ currencies in over 100 countries. Customers will be able to seamlessly move between domestic and international payment options even more so than before. More here ->
Lendai, an Israeli cross-border financing startup, raised $35m in equity and debt funding. Lendai's mission is to change the way foreign investors access U.S. financing without the need for a U.S. credit history or residency. More here ->
Yoco, an African payments, and software company has acquired one of the leading fintech and Web3 software development agencies in Africa, Nona Digital. According to the announcement, this acquisition significantly accelerates Yoco’s roadmap by bringing a team of highly specialized fintech product and technology professionals to join Yoco’s team. The two companies have been in partnership since 2019. More here ->
Dash, a Ghanaian payments app, raised $32.8m in seed funding. Dash’s alternative payment network brings together mobile money and traditional banks and facilitates transactions for consumers and businesses. It doesn’t aim to replace mobile money or banks. Instead, its wallet allows users to access a plethora of services they can’t find on their traditional provider. More here ->
Thirdfort, a London-based payment fraud detection startup, raised £15m in Series A funding. It has built a platform to help professional services firms run more thorough due diligence, and to flag when something is suspicious, is announcing a funding round of £15 million (about $20 million), money that it will be using to continue expanding its services, specifically to build payment infrastructure directly into its platform. More here ->
CredAvenue, an Indian business credit marketplace, raised $137m in Series B funding. CredAvenue has built what it says is India’s most comprehensive technology stack to meet businesses’ complete debt cycle from disbursal to collections. More here ->
Tabby, a Dubai-based BNPL startup, raised $54m in new Series B funding. Its two main markets are Saudi Arabia and the UAE. Arab said Saudi Arabia commands the lion’s share of the company’s transaction volume, driven by solid consumer adoption and increasing online transactions. More here ->
Lendable, a British P2P lending platform, raised £210m. Lendable applies AI and automation to enhance underwriting, and offer customers better rates, transparency and service, while offering institutional investors ranging from global banks to family offices access to the asset class. More here ->
Lunar, a Nordic neobank, raised €70m in new Series D funding at a reported $2b post-money valuation. Lunar has a full banking license (setting it apart from a number of other neobanks, which operate on other banks’ rails), and it offers checking and deposit accounts; loans and other credit services like buy now, pay later; stock, fund and ETF investing for consumers; plus business accounts, loans and financial management for SMBs. More here ->
In3, a Dutch BNPL startup, raised $11.1M. In3's customers pay the upfront cost of the purchase in three installments over 60 days – a longer period than most providers offer. Consumers themselves pay no interest charges or fees to make purchases in this way; instead, in3 makes its money from retailers who pay fees when their customers use the lender’s services. More here ->
Yuno, a Colombian payments startup, raised $10m in seed funding. Put simply, Yuno wants to bring to Latin American companies an easy online checkout solution that solves the pain point of managing multiple payment methods, as well as fraud detection tools, which can be costly and painful to manage. More here ->
Crypto
Online payments processing giant Stripe unveiled features on Thursday that will allow crypto businesses to use its software to more easily convert fiat currency such as the U.S. dollar into cryptocurrencies, and vice versa, within blockchain applications. More here ->
24 Exchange, a Bermuda-based multi-asset trading platform, raised $7M. 24 Exchange is a platform that allows market participants to seamlessly exchange their exposures at the lowest possible cost. More here ->
Milo, a Miami-based cross-border crypto mortgage startup, raised $17m in Series A funding. In January 2022, Milo launched the first-ever 30 year crypto mortgage and has begun processing applications from its waitlist of 7,400+ consumers. More here ->
Blockmetrix, a Dallas-based Bitcoin miner, said it raised $43m in Series B funding from undisclosed investors. The company had previously raised $7 million that went into deploying more than 1,000 mining rigs. More here ->
Upstream, a no-code DAO platform, raised $12.5m in Series A funding. Upstream calls its product a collective, but what it’s offering are tools to manage, and eventually launch, DAOs, which pool groups of people who invest some capital, often by purchasing tokens through cryptocurrency, in exchange for voting rights in decisions made by the group. More here ->
Metasky, a crypto wallet startup focused on the creator economy, raised $1.8m in a token sale co-led by Sequoia Capital India and Woodstock Fund. Metasky’s Wallet can seamlessly integrate inside any existing website or application, converting any existing app to a Web3 app. More here ->
Cega, a DeFi derivatives startup, raised $4.3m in seed funding. Arisa Toyosaki, who also headed up marketing at Bitcoin.com, told TechCrunch in an interview that many of the strategies available to crypto derivatives traders today are fairly risky, a motivating factor behind why she founded Cega, which she says is the first-ever DeFi exotic derivatives protocol. More here ->
Insuretechs
Talage, a Reno, Nev.-based provider of digital distribution software for commercial insurance, raised $9M. Over the past 12 months, demand has prompted Talage to add the ability to quote additional lines of coverage such as professional liability and cyber insurance and deliver industry-first tools to simplify renewals, book rolls, and cross-sell opportunities. More here ->
Proptech
Cain Acquisition, a real estate SPAC, pulled a $250m IPO registration. More here ->
Roofstock, an Oakland-based online platform for single-family rental investing, raised $240m in Series E funding at nearly a $2b valuation. With approximately 15,000 homes in its current portfolio, Roofstock has completed nearly $5 billion in transaction volume to date, with more than half of that amount taking place in the last year. More here ->
From the Stash
Fintech Funding Takes A Tumble — news.crunchbase.com Venture capitalists’ enthusiasm for fintech, which ranked as the hottest sector for startup investment last year, is showing signs of waning.
More Early-Stage Funding Flows To Climate Fintech And Finance — news.crunchbase.com
Relative to the size and urgency of the problem, climate change-focused startups comprise a comparatively paltry portion of venture funding recipients. Over time, however, their numbers have been rising.
Banks Beginning to View Fintechs as Frenemies — techcrunch.com Welcome to my new weekly fintech-focused column. I’ll be publishing this every Sunday, so in between posts, be sure to listen to the Equity podcast and hear Alex Wilhelm, Natasha Mascarenhas and me riff on all things startups! And if you want to have this hit your inbox directly once it officially turns into a newsletter on March […]
As API-first Startups Multiply, GGV Builds an Index — techcrunch.com When GGV Capital reached out and said that it had built an index of API-first companies, I was curious. Venture-built indexes of startups and other firms have proved useful tools in recent years, led by Bessemer’s cloud index, which is now also a tradable ETF on Nasdaq. But what GGV had in mind was startup-focused, […]
BMO Taps Document Ai for Lending Workflow Automation — bankautomationnews.com CHARLOTTE, N.C. — Unstructured data in documents is an automation focus for the Bank of Montreal. The $773 billion bank is employing artificial intelligence-based (AI) document handling as a chief technology, Atul Verma, BMO’s CIO of U.S. personal and business banking said Tuesday during the Bank Automation Summit 2022. Photographer: Brent Lewin/Bloomberg Mercury Intelligent document
Reports / Webinars
Connectivity, Clients & Claims: An Interview With Alex Bargmann & Ralph Blust, CEO & CRO, PathPoint — open.spotify.com
This week join Alex Bargmann, Pathpoint's CEO and Co-Founder & Ralph Blust, Pathpoint's President and CRO.
—
☑️ Thanks for reading. Please ask your friends, colleagues and others to sign up.
If you have any companies or news to share - use the form
AND - if we’re not already connected - let’s do it.