Fintech Highlights - 3/23/2021
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This edition is seemingly about charters. Bank charters that is. A lot of movement from Square, SoFi and Revolut shows that the next step for neobanks and fintechs is to establish themselves in a much bigger way, as they fight for the attention and share of wallet.
See below for some highlights.
Pinned to the Top
Payments giant Square has only gone and launched its own in-house bank.
Yes. A bank. With a charter and everything. The company filed their application in 2021, and was recently granted permission to move forward.
Square already has 80 million customers. And now itās set to offer FDIC-insured deposit accounts and loans to small businesses that have previously used the company for payment processing.
Despite what seems to be a free-flow of capital for businesses right now, small and medium sized businesses typically struggle to raise funds. A couple of years back Square attempted to solve this by offering working capital to customers by tapping their revenue via Square terminals.
And now they can offer a bigger range of small business owners a one-stop financial services provider, that is obviously a big need right now.
While also holding a charter - the holy grail of banking that sets them well ahead of their competition (see below re: SoFi acquiring a bank for their charter, and Revolut making an application - seemingly to keep pace).
The BFD
In case you missed it - Chime is reportedly evaluating options for going public, whether IPO, direct listing, or SPAC ā at a valuation of $30 billion.
That valuation would be more than double the $14.5 billion valuation of its Series F fundraise announced just six months ago (and an astounding 20x its valuation 24 months ago.)
Look - big funding rounds and sky-high valuations resulting from capital gambles via VC's don't always mean all that much. BUT the takeaway here is that Chime is 1) growing and 2) has a very powerful brand.
And in a slightly commoditized category where features and benefits are hard to compete on - brand awareness and equity can create and drive inbound interest, deposits and engagement.
And Chime seemingly has found a place in the collecting conscience of American consumers.
Fintechs
SoFi is acquiring Golden Pacific Bancorp, a Californian community bank regulated by the OCC, for $2.55 in cash per share (totaling a lowly $22.3 million). The purchase helps SoFi snap up a charter, allowing them to accept deposits and make loans. More here ->
Revolut has filed for a bank charter with the FDIC and the California Department of Financial Protection and Innovation. Right now, Revolut partners with Metropolitan Commercial Bank in the U.S. to handle deposits, card issuing, FDIC insurance etc. More here ->
Zillow, the online real-estate giant has announced it is adding over 2,000 staffers to the company by years end. The hiring goal was sparked by "a year of impressive growth across the business and a historic year in the real estate industry," the company said in a statement. More here ->
Sivo, a debt as a service provider, seems to have some big investor interest. Recently the company graduated out of YC and has raised $5m on a $100m valuation. They offer fintech's, neobaks and other technology companies to offer segments of their customers access to debt capital on "day one." More here ->
Bloom Credit has raised 3.87m to to help denied loan applicants become financially eligible. They recently announced a staggering stat - that loan issuers reject 10-15 times the number of loans they actually make, while 60% of those may actually be eligible. Which is a sizeable market opportunity. More here ->
Insuretechs
Chubb has offered to buy rival property and casualty insurer The Hartford for $23.24 billion in cash and stock. This would be the largest U.S. P&C merger since the current version of Chubb itself was created in January 2016. More here ->
Next Insurance, the leading digital insurtech company transforming small business insurance, today announced a partnership with Amazon Business to provide eligible members the opportunity to access customized small business insurance. More here ->
USAA's Smart Pilot program, their usage based insurance pilot, has found its groove. New customers are signing up for the carrier's SafePilot UBI program at a 50% clip, and leadership says more focus on the currently-serving customer segment is in the future. More here ->
Cowbell Cyber, a Pleasanton, California-based startup has raised a $20 million Series A round as more small and medium-sized enterprises look for insurance against the growing number of cyberattacks. More here ->
From the Stash
Bank of America tees up individualized digital experiences ā bankautomationnews.com
The bank plans to reprioritize funding for Life Plan to drive automated personalization
Walmart, Super Apps, And The New 'Retail' Bank | PYMNTS.com ā www.pymnts.com News that Walmart had poached two executives from Goldman to join its FinTech efforts shines a spotlight on the allure of super apps, with banking in the mix.
Compass Is Funded Like A Tech Company. Is It One, Though? ā Crunchbase News ā news.crunchbase.com
Dorseyās masterplan. As a Stocktwits user noted this weekā¦ | by Tom Brammar | Medium ā medium.com Its CEO is Jack Dorsey, who as its founder still holds a significant shareholding in the company which itself amounts to a large percentage of his net-worth. Now part of Jackās mission in life seemsā¦
Reports / Webinars
Bank Automation Ignite ā bankautomationignite.com
Gonna catch this years Bank Automation Ignite event. If you need it - save 10% on registration using code SHARE10.
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