Fintech Highlights - 8/2/2022
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Pinned to the Top
BNPL (Buy Now Pay Later) has been a topic of contention. The service is aka point-of-sale loans, which you can find all over eCommerce sites these days thanks to providers like Affirm, Afterpay, and Klarna. Even a $17.30 pair of jeans at Forever21 can be split up into four payments of $5.77.
BNPL has its benefits (it funds this writer’s Peloton without interest). The problem is it’s a little too convenient and younger generations are paying the price — over and over again with little payments that add up to big debt. BNPL constituted 91% of consumer loans in California in 2020. Gen Z is “spending 925% more now through point-of-sale services than in January 2020.”
The controversy we’ve seen over BNPL has been appropriately focused on the consumer space. Credit companies have always been subject to regulation to protect consumers, but point-of-sale, tech-supported loans are so new that many governments are only now tackling its downsides.
But what about BNPL for business? tranch’s launch in this space caught our eye earlier this week. At a basic level, the model seems much less problematic for companies — decision-makers are more experienced with defined budgets.
tranch offers an embedded BNPL solution for SaaS companies. This means businesses can get paid upfront and offer their customers flexibility for larger payments.
tranch got its start after co-founder Philip Kelvin realized while working as a CFO that payment options were lacking — “all offline, all painful.” In addition to enabling online payments that you can spread out, tranch lets businesses use their account to fund other large invoices with suppliers.
The community had their interest piqued by the concept, many noting its potential for SaaS companies and agencies who work with startups and SMBs. The makers at tranch closed a pre-seed earlier this year and joined YC’s Summer 2022 cohort, so things are starting to heat up.
The BFD
Wefox, a German digital insurer, raised $400 million in Series D equity and debt funding led by insider Mubadala at a $4.5 billion valuation.
Why it's the BFD: This is an up-round in a unicorn roadkill world. It's also VC validation of Wefox's indirect model, leveraging in-house and third-party brokers, which was viewed as antiquated by rivals that go direct-to-consumer.
Other investors include Eurazeo, LGT, Horizons Ventures, OMERS Ventures and Target Global.
Selective sharing: Wefox won't disclose the round's debt-to-equity ratio, even though it will disclose the round size, valuation and revenue ($200m+ in first round months of 2022, on $600m rev run rate).
The bottom line: "The approach is built on the basic notion that insurance is an inherently complex subject, and people would rather chat with a human and get personalized advice. And only then does the technology kick in, with all the usual mobile apps and online dashboards for registering and filing claims." — Paul Sawers, TechCrunch
Fintechs
TomoCredit, a San Francisco-based consumer credit startup, raised $22m in Series B funding at a $222m valuation. The company aims to help young adults who are in good financial health but have no credit score More here ->
Levelfield, a Houston-based financial trading platform, raised $9 million of venture funding. In coming months, LevelField will provide a full suite of products and services that will give consumers one destination for all of their digital asset and traditional banking needs. More here ->
Balance, a New York-based B2B e-commerce payments startup, raised $56m in Series B funding. Balance lets B2B merchants provide businesses with a way to pay how and when they want, while getting the funds instantly and easily as card payments. More here ->
Pogo, a New York-based consumer financial app, raised $14.8m in seed funding. The company aims to be much like Honey, allowing consuemrs to “unlock the power of your data to earn and save on shopping, finances and more." More here ->
Leapfin, a San-Francisco-based financial data management startup, raised $12.2m in Series A funding. The company provides a way for other companies to gauge the financial health of the company quickly. More here ->
B9, an SF-based provider of payroll advances to the underbanked, raised $2.6m in seed funding led by Sky Light Invest, per Axios Pro. More here ->
PayTalk promises to handle all sorts of payments with voice, but the app has a long way to go. PayTalk, a new app accepted into the first Black Founders Build with Alexa Program, aims to allow users to conduct all sorts of transactions with voice commands. More here ->
Shares, a U.K.-based investment app, raised $40m in Series B funding. Founded in 2022 by Benjamin Chemla, François Ruty, and Harjas Singh, the UK-based company offers a ‘social trading’ platform aimed at first-time investors. More here ->
Dbank, a Pakistani consumer fintech startup, raised $17.6m in a seed funding. Dbank is a fintech startup that will attempt to expand the reach of financial services in a “transparent and friendly” manner in Pakistan, taking on the informal credit system that tends to exploit those in need with exorbitant and unpredictable interest rates. More here ->
Featured Fintechs (via Republic)
Unbanked is a global neo-bank platform that bridges the gap between legacy financial systems and blockchain-based asset management. They are a crypto-focused Visa FastTrack Enablement partner, and serve 10+ whitelabel customers including Paxful, Nexo, and Litecoin Foundation. - Learn about Unbanked
Hedge has created a way to help make investing more inclusive and educational. Their collaborative trading platform allows investors to set up a hedge fund with their friends by pooling money and investing together. Hedge has secured key partnerships with NASDAQ, Alpaca Markets, Litquidity and more, and previously raised 1.2M from Starting Line VC, OrangeDAO and more. - Learn about Hedge
Champion Lender is removing barriers to home ownership for minority communities. Their B2C total home buying app is designed to educate borrowers and empower them to borrow confidently; meanwhile, their B2B mortgage platform is designed to generate leads and drive sales for lenders. They've been 100% bootstrapped to date and have seen revenue grow consistently over the last three years. Learn about Champion Lender
Visit Republic to find more emerging fintech’s - here ->
Crypto
Hashflow, a San Francisco-based decentralized finance exchange, raised $25m in new funding at a $400m valuation. The capital infusion will “enable Hashflow to continue to offer the best DeFi trading experience yet, centered around professional market makers using a request-for-quote (RFQ) model which optimizes for seamless interoperability, guaranteed price execution, and MEV protection.” More here ->
Topl, an Austin-based blockchain startup, raised $15m in Series A funding. The company arer the "creators of the world’s only blockchain built to drive impact initiatives and sustainable transformation for companies across the world.” More here ->
Aptos Labs, a Palo Alto, Calif.-based blockchain startup, raised $150m in Series A funding. Aptos is building a blockchain that uses a programming language called Move, which also powered the Diem blockchain and is supposed to make transactions faster and cheaper. More here ->
Morpho, a DeFi lending protocol, raised $18m via a native token sale. Morpho introduces a groundbreaking lending protocol that combines the current liquidity pool model used in Compound or AAVE with the capital efficiency of P2P matching engines used in order books. More here ->
Hidden Road Partners, a New York-based crypto prime brokerage, raised $50m in Series A funding. Hidden Road Partners provides a credit network for investors that enables access to traditional and digital markets. More here ->
Insuretechs
Reserv, a New York-based claims adjusting software startup, raised $8m in seed funding. Led by CEO CJ Przybyl, Reserv is a digital-native third party administrator (TPA) that also develops and sells software to power claims adjusters. More here ->
Koffie Insurance, a New York-based trucking and transportation insurance company, raised $11m in Series A funding. By leveraging technology, the platform is able to streamline all facets of the truck insurance experience starting with origination and quoting through claims management. http://axios.link/bbfv
Proptech
Intelligent City, a Canadian prop-tech company, raised $17m in Series A funding. The company is best known for deploying robotics to assemble mass timber buildings geared towards mid-to-high-rise homes and offices. More here ->
TestFit, a Dallas-based real estate modeling software company, raised $20m in Series A funding. TestFit’s building configurator helps real estate developers, architects and others involved in real estate planning to generate plans quickly for commodity structures such as multifamily, commercial and industrial buildings. That allows feasibility studies to be conducted more quickly. More here ->
Residently, a U.K.-based home rental marketplace, raised £4m in new funding. Residently provides a renting app that lets renters arrange viewings, take virtual tours, make offers, secure their home, pay deposits and extend or renew their lease all within one app. More here ->
Nada, a Dallas-based real estate fintech startup, raised $8.1m in seed funding. Nada's Cityfunds enable people to invest in single-family rental homes and fractionally invest in owner-occupied homes in Dallas, Austin, and Miami. More here ->
Nabr, a New York-based direct-to-consumer housing startup, raised $48m in equity and debt funding. The company builds sustainable apartments that consumers can design and own on their terms. More here ->
From the Stash
Lemonade closes on acquisition of insurtech Metromile, promptly lays off about 20% of its staff – TechCrunch — techcrunch.com Publicly traded Lemonade has laid off about 60 employees of Metromile, the auto insurtech company it just acquired.
Global Payments to Buy EVO Payments - WSJ — www.wsj.com Deal gives Atlanta-based payments company EVO an enterprise value of $4 billion, the companies say
Richard Branson backs Lightyear as UK stock trading platform launches into Europe – TechCrunch — techcrunch.com Lightyear, a U.K. fintech startup that offers commission-free trading on U.S. and European stocks, is officially extending into Europe.
The End Of The Neobank Era — www.forbes.com Neobanks may have won the first battle with incumbent banks, but a new wave of competition is coming from the likes of Square, PayPal, and Apple. It’s hard to imagine that venture capitalists will continue to fund new neobank startups.
Investment platforms face hangover after pandemic party | Reuters — www.reuters.com The trillion-dollar retail investment express is losing steam, dampening the fortunes of British trading platforms that boomed during lockdowns on the back of a meme stocks frenzy.
These Are Some Of The Tech Companies That Have Paused Hiring — news.crunchbase.com We’ve rounded up some of the tech companies that have said they’d slow down or put a freeze on hiring amid the market downturn.
Meta, Amazon, Tesla: Big Tech’s Stock Selloff Is Long Overdue - Bloomberg — www.bloomberg.com The market collapse isn’t just the inevitable result of macroeconomic forces like high interest rates and inflation. It’s also the best opportunity in more than a decade to reckon with the tech industry’s excess.
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