Fintech Highlights - 3/21/2022

🔔 The dashboard: The S&P 500 closed up 0.9%.

• Biggest decliner? First Republic Bank (-47.1%), after suffering a second credit rating downgrade in a week from S&P. (See below.)

Pinned to the Top

Circle, the issuer of USD Coin, said in a tweet last week that $3.3 billion of its reserves backing the stablecoin were held in Silicon Valley Bank, the bank that regulators shut down earlier in the day. After Circle’s disclosure, the price of USD Coin, which is meant to stay pegged to the U.S. dollar, fell to a little under 92 cents before recovering to roughly 94 cents, according to CoinGecko.

Redemptions of USDC surged on Friday—the market cap of all outstanding USDC started Friday at more than $43 billion but ended the day at less than $39 billion, CoinGecko data shows.

Coinbase customers have traditionally always been able to redeem USDC for USD on its platform, but the crypto exchange said in a tweet on Friday night it was temporarily pausing that conversion. “During periods of heightened activity, conversions rely on USD transfers from the banks that clear during normal banking hours,” the crypto exchange said in the tweet. “When banks open on Monday, we plan to re-commence conversions.”

THE BFD

The Federal Trade Commission will sue to block Intercontinental Exchange's (NYSE: ICE) proposed $13 billion takeover of home mortgage software provider Black Knight (NYSE: BKI).

Why it's the BFD: Antitrust regulators are filing merger lawsuits at a brisk pace; in part because of the perceived merits, and in part to dissuade new deals from emerging.

Details: ICE and Black Knight announced their agreement last May. Earlier this week, ICE had offered to sell the Empower loan origination of Black Knight, in what apparently was a futile effort to secure regulatory approval.

The bottom line: The FTC may seek to make both horizontal and vertical merger arguments, as previewed earlier this week by Axios Pro. The horizontal case could be about direct competition in loan originations, while the vertical would be systemic risks posed by one company controlling so much of the entire mortgage lifecycle.

M&A

Chipper Cash, an SF-based cross-border payments company focused on Africa, is considering a sale or new financing round, per Bloomberg. Chipper Cash has raised $300m, most recently at a $2.2b valuation in a round co-led by FTX and SVB Capital. More here →

Insurify has entered into an agreement to acquire Inspop USA, LLC and its subsidiary, Compare.com Insurance Agency, LLC ("Compare.com"), a pioneer in the U.S. online auto insurance comparison market in a transaction expected to close in H1 2023.  More here →

FairMoney, a Nigerian digital banking platform that’s raised over $55m in VC funding, acquired merchant payment services firm PayForce for between $15-$20m in cash and stock, per TechCrunch. More here →

Fintech

Apexx Global, a payments orchestration platform, raised $25m in Series B funding. Founded in 2016, Apexx combines acquirers, gateways, shopping carts, alternative payments methods and now BNPL products into a single API connection, easing the efforts of merchants to offer a complete one-stop shop option for consumer payments. More here →

Tilia, a payments platform for metaverse projects, raised $22 million led by JPMorgan. The company enables games, virtual world publishers, mobile applications and NFT providers to accept payments, issue virtual tokens, manage in-game purchases, and enable users and creators to earn and extract real money. More here →

Socure, a digital identity startup, has elected to take $95M credit facility. The company,  provides more than 1,500 customers, like Chime, SoFi, Robinhood, Gusto and Public, digital identity verification and fraud services. More here →

Payabli, a Miami-based payments API for SaaS platforms, raised $8m.  With Payabli, software companies can accept payments from customers, automate payouts to vendors, and monetize their payment stack. More here →

Candidly picks up student debt relief where new US policies leave off. Candidly, previously known as FutureFuel, partners with entities, including employers, financial institutions, retirement and wealth management firms, to embed artificial intelligence-driven student debt and savings optimization products into employee benefits engines. More here →

Fynn, a platform to finance students in vocational education, has raised $36M. Fynn’s funding is coming in two parts, an $11 million seed, and a $25 million debt facility for providing financing to students. The seed includes backing from Y Combinator, where Fynn first started as part of the Summer 2019 cohort (originally called TradeUp), and Susa Ventures.  The company is a “SoFi for trade students” in a sense. It currently works with around 150 technical colleges in the U.S., and now with some traction — $4 million loaned since the platform first went live in the summer of 2022More here →

FilmHedge, an Atlanta, GA-based provider of financing to film and television productions, raised $5M in Series A funding. Founded in 2020 and led by CEO Jon Gosier, FilmHedge is a fintech platform that provides private credit and financing solutions to qualified TV and Film producers, offering up to $10M per Film or TV production. The company uses data to track Film/TV production financial data, interest rates, and the credit worthiness of producers and production companies. More here →

Growfin, a SaaS fintech, has landed a $7.5M round.  Founded in 2021, Growfin helps finance, sales and customer success teams connect in one place to handle customer relationships during the payment process and improve efficiency in collecting payments.It seamlessly integrates with any ERP (which connects invoices with payments) and CRM systems (which connect leads to sales) to drive faster payment collections from customers, improving the cash flow and the financial health of businesses. More here →

Monnai, an AI-driven decisioning engine for fintech’s, has raised a Series A round of $6.5M. The company provides a global infrastructure that delivers customer insights to financial organizations that need to make better informed decisions for client lifecycle management.  More here →

Elyn, a French payments startup, raised a $2.7M seed round.  The company wants to offer some flexibility when it comes to e-commerce online payments. Instead of paying for items before they are even shipped, Elyn lets customers try before you buy something. More here →

Broom, an Indonesian auto-financing startup, raised $10m in pre-Series A funding. Broom helps help used car dealers work more efficiently by applying the asset-backed lending model to their businesses — offering in-app trading among dealers and providing new financing to do so.  More here →

🏦 Griffin obtains a UK banking licence. Unlike many consumer or SME challengers, Griffin’s BaaS platform is designed to provide fintechs with access to all the UK's payment rails, bank accounts, debit cards, an integrated ledger, and customer onboarding automation. More here →

🤖 Abound announces $601M raise to supercharge AI-based consumer lending. Its service — based around loans of between £1,000 and £10,000, with repayment options extending up five years (although average repayments have been 2.5-3 years), with interest rates the company guarantees are lower than those offered by banks (currently they are 24.8% APR) — has been growing on average 30% month-on-month; it has issued loans to more than 150,000 customers to date, and it says it is on track to loan out £1 billion ($1.2 billion) by 2025. More here →

Indian fintech unicorn Slice acquires stake in a bank. Slice has acquired a 5% stake in the Indian bank North East Small Finance in what analysts say is a key step in the unicorn fintech startup’s journey amid mounting challenges from the central bank that has toppled many young firms.More here →

French fintech Aria has bagged a €50m debt facility. Founded in 2020 and based in Paris, Aria offers an API-led B2B financing solution built to enable marketplaces and Software-as-a-Service (SaaS) companies to boost their growth by offering instant payments to providers while maintaining cashflow until their customers have paid. More here →

Brazilian B2B payments platform Barte has raised $3M. Founded in 2021, São Paulo-based Barte is tackling the working capital management headache suffered by many Latin American SMEs that face low transaction approval rates, manual processes and poor visibility, leading to cash flow constraints. Its payments platform promises to centralise SME transactions, simplifying complex payment processes and unlocking growth. More here →

From the Stash

MUST READ - The Axios Pro Rata Players Are Now Pleased to present, A Bank Collapse in Three Acts: Early in the week of Feb. 27, Silicon Valley Bank was informed that credit rating agency Moody's was considering a double-downgrade…..  More here →

In their own words: Silicon Valley Bank was more than a bank - We feature several voices from Silicon Valley on the impact of SVB and what its downfall means for them personally and professionally. More here →

SVB Securities Execs Look to Buy Back Bank’s Investment Arm -  The managers at the investment arm of Silicon Valley Bank are attempting to buy the firm back from its failed parent, Bloomberg reported. The attempt comes as the FDIC solicited bids from potential buyers for SVB more broadly. The report cautioned that there was no certainty of an SVB Securities deal being reached and that the effort could fall through or another buyer found. More here →

Silicon Valley Bank Experienced $42 Billion in Attempted Withdrawals -  Depositors initiated $42 billion in withdrawals from Silicon Valley Bank Thursday, according to a Friday regulatory filing from the California commissioner of financial protection and innovation. The bank was left with a negative cash balance of about $958 million, according to the filing. SVB was left unable to meet its cash letter with the Federal Reserve, despite trying to transfer collateral from other sources, it said. It’s unclear how much money was withdrawn: On Thursday, the bank told clients money transfers were ‘backed up.’ More here →

Roku, Roblox and Others Disclose Exposure to Silicon Valley Bank - Several public companies disclosed they had money on deposit at failed Silicon Valley Bank, including Roku and Roblox, a sign of how widespread SVB’s tentacles reached. More here →

Credit Karma has launched Net Worth, a new product to help people know, grow and protect their wealth - The new feature brings the 16-year-old company closer to becoming an end-to-end personal finance management platform, also offering debt, credit building and checking and savings products, Credit Karma founder and CEO Kenneth Lin said in an interview. As Credit Karma members moved through their credit journey of establishing credit and getting their credit score in check, they are now thinking about the next stage of their life: “financial goals and outcomes, he said.” More here →

Reports

How does embedded finance make money?
In the words of Method Man: “Cash rules everything around me.” 11:FS’ own David Barton-Grimley is joined by guests from Ampla, Fiat Republic, and HSBC, to look at how to make embedded finance profitable.  More here →

KPMG’s Latest Pulse of Fintech report
The U.S. continued to drive fintech investments last year, accounting for $61.6 billion across 2,222 deals during 2022, including $25.2 billion in the second half of the year. Seed-stage fintech deals saw record investment as valuations of late-stage VC-backed companies saw significant downward pressure, attracting a record $4.5 billion, up from 2021’s $3.4 billion.  “We’re also seeing a continued focus on BNPL, AI offerings/tools, and M&A activity remaining slow through the first half of 2023.” More here →

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