Fintech Highlights - 4/30/2024
Here's what we've been watching this week 👇
Pinned to the Top
In 2023 - Stripe surpassed the $1T mark in payment volume.
Yes, you read that right, 1 trillion. That’s NINE zeros.
In its annual letter published on Wednesday, the fintech giant currently valued at $65 billion announced it had hit the milestone just 15 years after it was founded.
For context, that’s 8 years faster than a little company called PayPal achieved the same feat.
The achievement has been largely credited to the adoption of Stripe’s products by fast-growing startups as well as the growth of its enterprise business.
The letter, penned by Co-Founders and brothers Patrick and John Collison, said:
“Although VC funding in 2023 hit its lowest levels since 2018, we’ve seen record startup formation across Stripe. (Besides the US, the biggest increases have come from the Netherlands, Sweden, and Canada).”
There are now a whopping 100+ companies processing upwards of $1 billion annually through Stripe’s platform. That’s one hell of a customer portfolio.
Another interesting tidbit from the letter was that Stripe saw twice as many AI companies go live on their platform in 2023 compared to 2022 including the likes of Perplexity and Mistral. They go on to state that the aggregate revenue of those AI companies grew by 249%.
“Our net assessment is that the startup ecosystem is more vibrant than ever before.” - a nice positive note within the announcement that signals a change in fortunes after a period of low investment across fintech.
A long-anticipated IPO for Stripe was widely expected this year but after an employee stock-sale deal last month, it doesn’t seem to be on the cards for 2024.
For now, it’s onwards and upwards for the fintech giant already boasting a customer list that includes Uber, Microsoft, and Best Buy, with plenty more undoubtedly lining up after this announcement.
The BFD
JPMorgan Chase has been fined roughly $350 million for failing to properly monitor client trading activity over nearly a decade, an action foreshadowed to investors by the bank in February.
What's the fine? The Federal Reserve and the Office of the Comptroller of the Currency on Thursday announced penalties of $98.2 million and $250 million, respectively, after finding JPMorgan failed to surveil “billions” in trading activity across at least 30 global financial trading venues. The venues were hosted through the company’s corporate and investment bank, and included trading platforms operated by investment firms.
What happens next? A JPMorgan spokesman said the bank expected no disruption to clients and that it had “self-identified the issue, significant remedial actions have been taken and others are underway; and we have not found any employee misconduct or harm to clients or the market in our review of the previously uncaptured data.”
The Federal Reserve said JPMorgan’s surveillance program operated without adequate data oversight and reconciliation processes. The bank is now barred from onboarding new trading venues without approval from the Federal Reserve. It has been ordered to review trading stretching back to 2014 and conduct a third-party review of its policies. JPMorgan must also set up a board-appointed compliance committee with a majority of independent directors to oversee the bank’s compliance with the orders.
M&A
Accel-KKR completed its purchase of Accertify, an Itasca, Ill. provider of fraud prevention solutions, from American Express (NYSE: AXP). More here ->
Fintech
Birdwingo, a Czech investment app for teens, raised €1.2m led by Bienville Capital. More here ->
Investtech
Altruist, a Culver City, Calif. custodian for RIAs, raised $169m in Series E funding. Iconiq Growth led, and was joined by Granite Capital Management and insiders Adams Street Partners and Sound Ventures. More here ->
From the Stash
Transactions: EverBank selects Finzly to update payment processing system - EverBank has selected payment and financial solutions provider Finzly to update its payment processing system, according to an April 18 release. The $34.6 billion, Jacksonville, Fla.-based bank was looking to modernize its payment operations without completely replacing its core, a need many Finzly clients are trying to address. More here ->
Block shares CashApp, Afterpay integration update - Block’s Cash App profit and number of users grew in the first quarter as the payments provider integrated buy now, pay later provider Afterpay. Block, formerly Square, acquired Afterpay in August 2021 for $29 billion but it has had issues integrating the solution with its Cash App Card debit card, Chief Executive Jack Dorsey said More here ->
HSBC to invest in wealth, transaction banking technology - HSBC is restructuring the organization by leaving some geographic territories, investing in tech and — most recently — undergoing a leadership change. The bank is looking for a replacement for Chief Executive Noel Quinn, HSBC Chairman Mark Tucker announced during today’s first-quarter earnings call. More here ->
Payments, cloud services contribute to Apple’s $23B services revenue - Tech giant Apple reported record revenue from its services businesses, which include payments and iCloud, and is going knee-deep in its generative AI foray. “We set an all-time revenue record in services with $23.9 billion, up 14% year over year,” Chief Executive Tim Cook said during the company’s second- earnings call May 2. More here ->
ING launches 3 digital banking features in Q1 - ING Bank is improving its digital capabilities and offerings as it posted growing mobile banking adoption in the first quarter. The bank is prioritizing delivering “a superior customized digital experience that is personal, easy, relevant and instant,” Chief Executive Steven van Rijswijk said during the digital bank’s first-quarter earnings call today. More here ->
Fifth Third CIO: Chatbot 97% accurate in classifying customer intent - Fifth Third Bank says that added efficiencies to its chatbot have boosted its accuracy rate as it leans into generative AI. When it comes to technology, “our chatbot is one that we are really investing a lot of energy in,” Jude Schramm, chief information officer, said March 18 at Bank Automation Summit. More here ->
More from the stash:
Julie Hyman
Jason Mikula
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