Fintech Highlights 8/1/2023
FDIC is shopping Signature's loans. Banc of California and PacWest merge. Finicast raises a round. Here's what we've been watching this week….👇
The BFD
The FDIC announced that it's seeking buyers for $18.5 billion in private equity-linked loans from Signature Bank, which collapsed in March.
Why it's the BFD: A reminder that it can take less time for banks to fail than for bank regulators to dispose of the wreckage.
Details: The sealed-bid process is being managed by Newmark, with closing anticipated by October. It's split into four pools. Bidders must be FDIC-insured depository institutions or commercial banks that don't compete with the borrowers.
The bottom line: "The portfolio comprises 201 performing capital-call loans tied to firms including Starwood Capital Group, Carlyle, Blackstone, Thoma Bravo and Brookfield Asset Management, according to a person familiar with the matter .... Newmark is still working on preparing a sale of Signature's commercial real estate loans, although timing remains unclear."
The BFD x 2
Banc of California and PacWest, two California regional banks, are merging under the former's brand. Warburg Pincus and Centerbridge are also investing $400 million into the combined business for about a 19% stake.
Why it's the BFD: It's the latest regional bank merger this year in the name of stabilization — but this time, without regulator involvement.
Details: The new bank will operate under the Banc of California brand, with president and CEO Jared Wolff remaining at the helm. After the deal closes, the combined bank is expected to have about $36.1 billion in assets, $25.3 billion in total loans, $30.5 billion in total deposits and over 70 branches in California.
The bottom line: "PacWest was hit harder by the recent banking turmoil, losing 18% of its deposits in the first half of the year, versus a nearly 4% loss for Banc of California. PacWest investors were particularly skittish because of its ties to the type of venture customers who pulled cash en masse at SVB .... Executives and government officials increasingly expect regional banks to bulk up through mergers to help them weather the tougher operating environment." — Lauren Thomas, Justin Baer, Ben Eisen, Gina Heeb, WSJ
M&A
AngelList acquired Nova, maker of investor management software for institutional private funds. More here ->
Rapyd, a fintech valued by VCs at $8.75b, agreed to buy the global payments organization of Prosus-backed PayUfor around $610m, excluding its Indian, Turkish or Southeast Asian business. More here ->
Fintech
Finicast, a San Mateo, Calif.-based business finance collaboration startup, raised $12.8M in seed funding. The company is "managed, designed, and developed by analysts and power users of spreadsheets that are dedicated to making the analyst's job easier, collaborative, and massively scalable to deliver the insights that drive success." More here ->
Tradeshift, a B2B payments and supply chain startup, raised $70m. Areas where it said it plans to invest include adding more SaaS, B2B marketplace and embedded financial services. It is also considering some acquisitions. More here ->
Bunq, a Dutch neobank, raised €100m ($111m) in funding at a €1.65b ($1.8b) valuation. Bunq that provides banking, savings, payments, card and other services to consumers with a focus on people who might need such services in more than one country across Europe. More here ->
Investtech
Giraffe, a New York-based maker of impact investing tools for employees, raised $10.5m in seed funding. More here ->
Proptech
Topline Pro, a New York-based online scaling service for home services businesses, raised $12m in Series A funding. More here ->
From the Stash
State of fintech funding Q2: Fintech funding the lowest since 2017 - The total funding and number of deals in the fintech sector fell in the second quarter in the face of high-profile U.S. bank collapses in the spring. In Q2, global fintech funding slumped to $7.8 billion, down by 48% quarter over quarter, while number of deals dropped by 22% sequentially to 845, lowest since 2017. More here ->
Fiserv payments revenue up 8% to $1.6B - Payments and financial services technology company Fiserv is looking to expand efforts in embedded finance and cloud services to meet increased demand for digital banking products. The high demand among its financial institution customers is leading Fiserv to raise its outlook for the full year, Frank Bisignano, president and chief executive, said More here ->
Promise and peril: Fairness in AI-based lending - Artificial intelligence has revolutionized credit decisioning. What was once a slow, manual and subjective process is becoming highly automated, and the all-important act of approving or denying credit is increasingly being turned over to highly sophisticated neural networks. More here ->
FI Innovation Rankings: Top 5 most innovative financial institutions - Bank Automation News and banking data and analytics platform FI Navigator have released the latest ranking of the top five most innovative financial institutions. The dataset ranks the top 25 financial institutions across four asset tiers — $500 million to $1 billion, $1 billion to $10 billion, $10 billion to $100 billion and FIs over $100B. More here ->
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