Fintech Highlights - 6/20/2023
When we started this newsletter - I never thought it would slip to once every two weeks. Turns out we've done that a couple of times recently. Apologies.
Onwards. Here we go...
Pinned to the Top
Stripe made headlines more than once this week as it acquired a (non-fintech!) startup and announced an expansion of its issuing product into credit.
Stripe picked up Okay, a startup that developed a low-code analytics software to help engineering leaders better understand how their teams are performing.
Okay is a small startup, with just seven employees, that over time had raised $6.6 million from investors such as Sequoia Capital and Kleiner Perkins after graduating from Y Combinator’s Winter 2020 cohort.
Okay’s co-founder and CEO Antoine Boulanger stated that “by increasing engineering effectiveness, Stripe will be better positioned to attract and retain talented engineers.” It also presumably will be in a better position to compete in an increasingly crowded space.
In other words, Stripe deciding to acquire a startup that helps engineering leaders build performance dashboards to gauge how their teams are doing feels like the company is very serious about making sure its own engineering team is working effectively enough to not only move faster, but also be more productive.
Stripe also announced this week its plans to give companies the ability to create and distribute virtual or physical charge cards that allow their customers to spend on credit rather than using the funds in their accounts.
“Among our suite of products, Issuing [which it launched in 2018] has been doing really, really well,” Denise Ho, Stripe’s head of product for BaaS, told TechCrunch. “And the No. 1 top demand within Issuing has been the ability for Stripe to enable our platforms to offer credit to their users.”
This has a twofold benefit for Stripe — giving it a new revenue stream as well as the option to offer new financing capabilities to their customers “with little additional operational cost,” Stripe touts. It also gives companies like Ramp and Karat, among others, the ability to give their clients access to credit at a time when credit may not be as easy to come by.
The BFD
The largest U.S. banks could face tougher regulations that may raise overall capital requirements by as much as 20%, with the steepest planned increases reserved for the biggest banks that run sprawling trading businesses, according to The Wall Street Journal.
The potential move is part of an expected wave of new regulations to beef up oversight of the sector following a series of bank collapses earlier this year, including the failures of Silicon Valley Bank, First Republic Bank and smaller lenders Signature Bank and Silvergate Bank.
The largest U.S. banks have already railed against the threat of higher capital requirements, and WSJ reported Monday that lenders with more than $100 billion in assets may be subject to the rules, effectively lowering the current $250 billion threshold at which banks must meet the strictest regulatory requirements.
M&A
FIS (NYSE: FIS) acquired Bond, a San Francisco-based fintech infrastructure platform that had raised around $42m from Coatue, by Goldman Sachs, Mastercard, B Capital, XYZ Ventures, John Mack and Canaan Partners. More here ->
Barclays (LSE: BARC) is exploring options for its global payments business, per Reuters. More here ->
Visa (NYSE: V) is in advanced talks to buy Brazilian banking and payments startup Pismo, which could fetch $1b, per Bloomberg. Pismo has raised over $100m from backers like Accel, Amazon and SoftBank. More here ->
Capital One acquired luxury concierge service Velocity Black in a deal announced June 1 as the credit card giant seeks to bolster the perks offered to its customers. Terms of the deal were not made public. Founded in 2014, Velocity Black markets itself as an exclusive subscription service. More here ->
Nasdaq (Nasdaq: NDAQ) agreed to buy Adenza, a New York-based provider of trading, treasury and risk management software, from Thoma Bravo for $10.5b in cash and stock (55%/45% split). More here ->
EQT offered to buy Alfa Financial Software (LSE: ALFA), a British provider of software for the asset management industry, for around $773m. More here ->
Nordic Capital is in talks to buy Swiss digital banking software provider Temenos (Swiss: TEMN), after other suitors walked, per Bloomberg. Temenos had around a $5.4b market cap upon initial reports of takeover interest in early April, but it's now climbed to $6.7b. More here ->
Optasia, a Dubai-based provider of credit-decision software, hired Moelis & Co. to help it explore a sale or IPO, per Bloomberg. Backers include Convergence Partners. More here ->
Korean fintech Kakao Pay to acquire majority stake in US brokerage firm Siebert. More here ->
Belvo acquires Skilopay to enter payments market in Brazil. More here ->
Fintech
Keeta, a Santa Monica, Calif.-based cross-border payments startup, raised $17m led by Eric Schmidt. Keeta is a payments platform utilizing blockchain technology to build a high-efficiency payments network. More here ->
US-based fintech start-up Plenty has launched with $2.75 million in a pre-seed funding round. Founded in 2022 by an early Stripe employee, Plenty offers a financial platform that helps couples discuss, manage and invest their money together. Its goals-based investing platform is available via membership, and simplifies and automates the financial forecasting and investing process for couples who want to plan toward life milestones. More here ->
Mosaic, a corporate financial decision-making platform, raised $26m in Series C funding. Mosaic offers a Strategic Finance Platform that provides real-time financial analytics and planning to get teams from data to decision — faster. More here ->
Bonside, a revenue financing platform for brick-and-mortar businesses, raised $4.35m from the 81 Collection and Philz Coffee co-founder Jacob Jaber. Bonside is a financing platform designed for brick-and-mortar businesses that provides growth financing through revenue. More here ->
MoCaFi, a Harlem-based startup focused on strengthening access to banking for people without bank accounts, has announced it has raised $23.5 million in a series B round. The money will be used to expand MoCaFi’s offerings and to work hand-in-hand with more governments seeking to reach the very same populations the company serves. More here ->
Secro, a Wilmington, DE-based provider of a digital bill-of-lading platform known as Secro e-Bill, raised $3.6M in Seed funding. Secro provides a platform that enables users to perform all the functions of a paper bill of lading with increased speed, user interaction, lower cost and security, without the need for private agreements used by other electronic bill of lading (eBL) providers. More here ->
Stori, a Mexican fintech unicorn, has secured $50M in debt capital. Stori Card is a digital platform focused on providing digital financial services to underserved customers. More here ->
Mexican fintech start-up Trébol has secured $3 million in seed funding. Founded in 2021, Trébol automates business identity verification and underwriting decisions allowing banks, lenders, and insurers to quickly onboard its customers. It claims to have automated the verification of more than 8,000 businesses for banks, lenders, and expense management platforms in Mexico and Colombia. More here ->
Griffin, a newly licensed U.K. bank, raised $13.5m in Series A funding. The BaaS platform allow firms to open "ring-fenced accounts" with a tighter, less record-heavy compliance structure. More here ->
UK fintech Freemarket, which operates a platform for regulated B2B cross-border payments and currency exchange, has received an undisclosed amount of investment from Baird Capital. With the funding, Freemarket intends to propel its growth and international expansion, as well as provide a partial cash-out to existing shareholders. More here ->
Fintech Farm, a UK based company which is helping to create neobanks in emerging markets, has reportedly closed its Series B funding round on $22m. The company helps to create neobanks in emerging markets. These services provide customers with user-friendly mobile apps and credit products for mass audiences and those with little credit history. More here ->
Thunes, a Singaporean cross-border payments startup, raised $60m. Thunes has built a proprietary global network for an improved and more connected cross-border payment experience. More here ->
US and Israel-based open source risk decisioning platform Ballerine has raised $5 million in a seed funding round. Founded last year, the start-up provides an open-source platform that integrates global data sources and tools to automate decision-making processes for onboarding, underwriting and transaction monitoring. More here ->
Investtech
RealBlocks, a New York-based provider of a technology platform for alternative investments that provides an end-to-end digital investing process and secondary trading, raised additional $10M in extension of Series A funding. The company intends to use the funds to continue to scale its technology platform that provides capabilities such as onboarding and management of the entire lifecycle of alternative funds and their investors. More here ->
Dori, an Atlanta based generative AI platform for private market transactions, today announced the company’s official launch out of stealth. Dori provides AI-powered products that simplify fundraising for founders and attorneys and summarize complex deal documents for VCs. More here ->
Insuretech
Incline P&C Group, an Austin Based insurance firm focused on program market services, has announced a $125M investment from Braemont Capital. More here ->
Lfe5 (fka Getlife), a Spanish life insurance startup, raised €10m in Series A funding. The company’s underwriting engine can handle 700 illnesses and risk professions, which greatly increases the acceptance rate. The startup acts as a managing general agent and partners with insurers and reinsurers, such as Axa and CNP Assurances. More here ->
Meanwhile, a Bermuda-based crypto life insurance startup, raised $19m in seed funding. Meanwhile claims to be the first and only life insurer to offer products entirely denominated in crypto. More here ->
Insify, an Amsterdam-based business insurance startup, raised €10m in Series A extension funding. Insify addresses the long tail of the business insurance market. While big companies usually have plenty of options when it comes to insurance products, if you’re a freelancer or a small company with a handful of employees, the current experience isn’t great. More here ->
Brazilian health insurance company Sami secures $18M. Sami, which sells only corporate plans, also announced that its health plans are no longer restricted to the online format and direct sales. More here ->
Proptech
EliseAI, a conversational AI platform for real estate, raised $35m in Series C funding. More here ->
TheGuarantors, a firm building smart financial and insurance solutions for renters and landlords, has scored $35m in growth funding. Founded in 2015, The Guarantors is working to improve renting affordability and access for renters across the U.S. More here ->
From the Stash
CFPB highlights AI-driven chatbot risks for FIs - Financial institutions must consider the efficiencies and limitations of artificial intelligence when deploying chatbots as client adoption grows and regulators address pain points of the technology. According to the Consumer Financial Protection Bureau’s (CFPB) “Chatbots in Consumer Finance” report, released yesterday, adoption of bank chatbots is expected to hit 110.9 million users by 2026. More here ->
Affirm has a partnership with FIS’ Worldpay - that enables Worldpay merchants to offer Affirm’s Adaptive Checkout product. Eligible consumers can, in a few clicks, sign up for biweekly and monthly payment options. Check out TechCrunch’s coverage of Affirm, including what happened with Affirm’s earnings earlier this year and the buy now, pay later boom. More here ->
JPMorgan debuts payments partner marketplace - JPMorgan Chase is giving business clients deeper access into its $9.6 trillion payments network. The banking giant on Thursday (June 1) debuted its Payments Partner Network, a digital platform powered by Salesforce. More here ->
How a $13 billion fintech that angered Jamie Dimon won over banks - Over the past decade, Plaid’s digital pipes have enabled 1 in every 3 people with a US bank account to connect it to the app or service of their choosing. What’s next for Zach Perret’s $13.4billion company? More here ->
Kasisto launches KAI-GPT - the first banking industry-specific large language model. More here ->
Adyen launches payout services - to provide faster global payments. More here ->
PayPal’s 80% stock plunge hasn’t soured Wall Street - For the majority of PayPal Holdings Inc. analysts, the only way is up. Trouble is, the stock keeps going down. About two thirds of the more than 50 Wall Street firms covering the digital-payments company has a buy or equivalent rating on the shares, according to data compiled by Bloomberg. More here ->
Bank of America ups tech spend $400M YoY amid AI boom - Bank of America expects to increase technology development spend by nearly 12% year over year as the race for generative AI innovations engulfs the financial industry. The bank is projected to hit $3.8 billion in tech spend in 2023, up from a February projection of $3.7 billion, Chief Executive Brian Moynihan said Thursday. More here ->
Northwest Bank gains sticky deposits through Deluxe - Northwest Bank has improved its customer acquisition and retention through personalized, automated marketing and digital offerings since implementing data-driven marketing agency Deluxe in 2021. The $14 billion bank launched Deluxe’s Life Event Trigger Program last year and posted program outperformance at 112% of the target, checking balances also outperformed at 118% of the target. More here ->
Outlook not so good for Binance and its co-founder - We can’t make this stuff up. The Securities and Exchange Commission filed 13 charges against the world’s largest crypto exchange Binance, its co-founder Changpeng Zhao, and other entities related to the exchange. More here ->
TD Bank unveils redesigned mobile app - TD Bank is redesigning its mobile banking app to create an easier and more connected user experience as mobile banking demand grows, Head of Canadian Personal Banking at TD Bank Michael Rhodes said at today’s Investor Day 2023 event. More here ->
Fintech Firm Rho in Talks to Buy Startup Formerly Known As Party Round - Capital, an Andreessen Horowitz-backed company that helped founders raise and manage cash, is in advanced talks to sell itself to cash-management startup Rho, according to two people familiar with the matter. The sale talks haven’t been previously reported. Terms of the deal could not be learned. Capital went by the name Party Round until last year. More here ->
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