Fintech Highlights - 7/6/2021
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Here’s what’s worth watching this week….. 👇
Pinned to the Top
Last week, Robinhood filed for what's expected to be one of the largest IPOs of 2021, capping off a stunningly swift corporate comeback.
Why it matters: Five months ago, Robinhood was on the verge of a capital and customer cataclysm, as a run on meme stocks like GameStop had exposed its lack of adequate reserves.
That fiasco also sparked an SEC investigation, numerous class action lawsuits, Congressional hearings and (as we learned from the S-1) a federal warrant for CEO Vlad Tenev's phone.
Three days ago, Robinhood agreed to pay a record $70 million in fines and restitution as part of a regulatory settlement over providing users with "false or misleading information."
Between the lines: It's not normal for a company under this much recent scrutiny to invite even more attention via a public listing, but these aren't normal times in Robinhood's industry. Just look at how much it made last quarter by enabling dogecoin trades.
Details: Robinhood plans to list on the Nasdaq under ticker "HOOD," and lists just about every bank in the world except for Morgan Stanley.
The BFD
Blend Labs, the home lending platform that enables banks to enable lending on their digital platforms, set IPO terms to 20 million shares at $16-$18. It would have a $3.7 billion market value, were it to price in the middle, plans to list on the NYSE (BLND) and reports a $75 million net loss on $96 million in revenue.
Why it's the BFD: housing is hot. And so is the rush to digitize product acquisition in financial services. Regional banks who don't have the capital required to build out their online platforms are getting left behind by their super-regional and national competitors. And they are rushing to make up the gap by partnering with stable fintech's like Blend.
Fintechs
Lower, a full-stack mortgage lender, as well as a platform for buying, selling, and insuring homes, has raised $100 million. The financing also marks the previously bootstrapped Lower’s first external round of funding in its seven-year history. More here ->
In gold rushes, the people selling the picks and shovels usually win. Thus, startups have turned their attention, not to launching full-stack banks, but to full-stack platforms that other people can launch their fintech startups and products upon. Enter Toqio, a fintech platform with a white label digital finance SaaS that allows anyone to launch a new fintech product. More here ->
Visa has announced that it is acquiring Tink, a Stockholm-based open banking platform, for $1.8 billion Euro. The deal comes after Visa’s bid to buy Plaid, an American rival to Tink, was torpedoed by U.S. regulators. More here ->
Whether you are part of the accounting department, or just any employee at an organization, managing expenses can be a time-consuming and error-filled, yet also quite mundane, part of your job. Today, a startup called Pleo — which has built a platform that can help some of that work more smoothly, by way of a vertically integrated system that includes payment cards, expense management software, and integrated reimbursement and pay-out services — is announcing a big round of growth funding to expand its business after seeing strong traction. More here ->
Codat, a startup that provides APIs to link small-business fintech data to external services, announced that it has closed a $40 million round. The startup’s API connects corporate data from internal SMB systems — QuickBooks, iZettle etc. — to external providers. More here ->
Kikoff, a San Francisco-based personal finance platform for building credit, raised $30 million. The company, which targets Millennial and Gen Z users, is looking to help people who have low credit scores or no credit scores establish and build credit through its online store. More here ->
Tomo, a mortgage process platform, raised $70 million in seed funding (no, not a typo). You can raise that kind of money when you are founded by a pair of executives that spent years at real estate giant Zillow. They launched last week in Seattle, Dallas and Houston, and say it will do things like issue fully underwritten pre-approvals “within hours, not days” and guarantee on-time closing. More here ->
Orum, based in New York, aims to speed up the amount of time it takes to transfer money between banks. They recent announced it has raised $56 million. Orum aims to use machine learning-backed APIs to “move money smartly across all payment rails, and in doing so, provide universal financial access.” More here ->
Insuretechs
Socius Insurance Services, Inc., an independently-owned management liability and property/casualty insurance wholesaler, today announced that it has received a significant growth investment from Abry Partners. Socius will look to further grow its already industry leading expertise in the management, professional and cyber liability practice disciplines, as well as bolster its position in the property and casualty marketplace. More here ->
The pet care industry has boomed over the past several years. From Chewy’s IPO to the various veterinarian startups that have sprung up, VC money (and consumer cash) is flowing into the space. And Wagmo is no different. The pet insurance and perks startup has closed on a $12.5 million Series A financing. More here ->
From the Stash
Talent Pipeline Makes Calgary A Great Place To Grow A Fintech Company — techtalent.ca
Calgary tech startups raised $307 million in 2020, an 88% increase from 2019.
Who Will Build Consumers a Debt Dashboard? - Andreessen Horowitz — a16z.com Plus, will neobanks be winner take many? How to choose the right partner bank? News and analysis from the a16z fintech team in our monthly newsletter.
5 use cases for the booming open banking market | Bank Automation News — bankautomationnews.com
As the banking industry continues to innovate and as the lines between fintechs and financial institutions continue to blur, open banking is booming, with the market size estimated to reach $43.15 billion by 2026, at 24.4% CAGR, according to Allied Market Research.
Embedded Insurance: Where insurance is bought, not sold - by Harry Simon - The Future State: Insurance by Radicle — thefuturestate.substack.com Welcome to The Future State: Insurance where we profile startups rewriting the future of insurance. For in-depth profiles and founder interviews released every 2 weeks – subscribe below: If you want a taste, read our top posts here: Openly: Is premium (high-value) home insurance the beachhead to penetrate the greater ~$110b home insurance market?
Reports / Webinars
Driving Into The New Normal - How AutoTrader Is Leveraging Owned Channels To Drive Incremental App Growth — branch.io Driving Into The New Normal - How AutoTrader Is Leveraging Owned Channels To Drive Incremental App Growth
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