Fintech Highlights - 8/23/2022

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Startup Twitter spent much of last week debating Andreessen Horowitz's $350 million investment in Flow, WeWork co-founder Adam Neumann's new housing company.

Why it matters: To many, Neumann is a disgraced entrepreneur whose excesses should disqualify him from future investment (and trust) from investors. Yet, he's the latest boldface name founder to get a second shot, whether he deserves it or not.

• Meanwhile, there was also a lot of frustration that women and people of color — who can't even get a sliver of that cash from investors, despite not having Neumann's baggage — can't seem to get a break.

The big picture: Where some see an entrepreneur ousted from his own company under a cloud of mismanagement and waste, others see an ambitious founder who created billions of dollars out of nothing — and could probably do it again.

• It's right there, in Marc Andreessen's blog post explaining the investment: "Adam is a visionary leader .... [I]t's often under appreciated that only one person has fundamentally redesigned the office experience and led a paradigm-changing global company in the process: Adam Neumann."
• Andreessen also hinted that he's not buying everything that's been written about Neumann and WeWork, calling those accounts "sometimes accurately" covered.

Other investors polled pointed out that at the end of the day, WeWork is now a $5 billion company — something few people could make happen.

• "They'll chalk it up to 'ethics' ... but most chalking it up to ethics would have done the deal if they had the opportunity," one techie said in a message.

Also: To some folks, Neumann's new company has merit in and of itself.

• Of course, plenty also disagree, pointing out non-software margins, and the huge valuation gap with residential housing companies.

Between the lines: That's not a perspective unique to Neumann.

• "Parker is one of the best founders we've ever worked with, and his ability to go from zero to one is one-of-a-kind," Initialized Capital's Garry Tan said in 2017 about backing Zenefits co-founder Parker Conrad's new company, Rippling. A slew of other investors made similar statements.
• Ditto for Uber's Travis Kalanick, who went on to start CloudKitchens. He raised funding, and even recruited some of his old employees, to whom he remained a uniquely talented entrepreneur.

The intrigue: As some have speculated, it's also quite possible that Andreessen Horowitz's investment includes some additional downside protections.

• The firm declined yesterday to comment beyond its blog post on the investment.

The bottom line: Beauty may be in the eye of the beholder, but potential for massive returns is in the eye of the check writer.

The BFD

Guesty, a Walnut, Calif.-based short-term rental management company, raised $170 million in Series E funding led by Apax Digital Funds, MSD Partners, and Sixth Street Growth, with Viola Growth and Flashpoint also participating.

Why it's the BFD: The pandemic gave a huge boost to Airbnb — and adjacent businesses like Guesty are also trying to ride that wave.

The bottom line: "The company is not yet profitable, [co-founder and CEO Amiad] Soto said, but it's aiming for it next year, when it is also on course to surpass $100 million in ARR in the first six months." — Ingrid Lunden, TechCrunch

M&A

Mexican fintech Covalto, which serves Mexican SMEs and was formerly known as Credijusto, has agreed to publicly list on a U.S. stock exchange via a SPAC at an estimated pro-forma valuation of $547 million. The transaction is believed to be the first time a Mexican fintech has agreed to publicly list on a U.S. stock exchange. Upon closing of the transaction, LIVB will be renamed Covalto and remain listed on Nasdaq under the new ticker symbol “CVTO.” More here ->

eToro, the social investment platform, has agreed to acquire fintech startup Gatsby for $50M. The acqusition is geared towards will allowing eToro to broaden the range of its U.S. product, which today is focused on stocks and crypto. More here ->

Sequoia backed, Indian insurer Digit Insurance has filed for an initial public offering, looking to raise about $440M even as many of its local peers have deferred plans to list publicly in the South Asia nation. More here ->

Noble Money, a digital currency company, was acquired by QENTA Payment Solutions, a subsidiary of Emergent Technology Holdings, for an undisclosed amount. Noble had raised $2.25M in funding to date from Tribe Capital, Green Sands Equity, Hard Yaka, Social Capital,and 8VC. More here ->

Fintechs

Forage, a San Francisco fintech that strives to make online groceries accessible to more shoppers on food assistance programs, has raised a $22M funding round. Instacart founder Apoorva Mehta, PayPal Ventures and fintech-focused Nyca Partners all joined Forage’s Series A round. More here ->

Givers, a fintech startup for family caregivers, raised $3.5m in seed funding. Givers, which is launching out of beta, unearths savings for caregivers through tax credits, state programs, health insurance benefits, and more. More here ->

Highbeam, a New York-based neobank built for people building e-commerce brands on marketplaces like Shopify and Amazon, raised $7 million in seed funding to continue developing banking tools that cater to these entrepreneurs’ needs. By focusing on e-commerce, Highbeam is able to provide a single financial view of the business and help entrepreneurs decide the right cash and credit options. More here ->

Pomelo, a San Francisco-based lending startup, raised $20m in seed funding. The company wants to make it easier to send remittance payments and conduct international money transfer. More here ->

YC-backed Arc, a digital bank for ‘high-growth’ SaaS startups, landed $20M. The company offers both debt funding and digital banking services to SaaS startups. More here ->

AtoB, a startup that aims to to modernize the transportation industry, by providing working capital to small truck fleets, has raised $155 million. AtoB’s platform includes no-fee fleet cards and instant direct deposit payroll. The company also offers services that it said help reduce fuel theft and improve truck-routing in ways that, among other things, cut emissions. More here ->

Funding Circle co-founder Samir Desai has unveiled a new U.K. fintech startup called Super Payments, a venture he founded back in February but which very little was known about until now. Super promises to help its customers (businesses) cut out the financial "middlemen" payments processors, who often charge up to 5% on top of every transaction. More here ->

Zywa, a Dubai-based neobank for Gen Z users, raised $3m in seed funding. Zywa is a social banking app and prepaid card to make it possible for Gen Z (between the age of 11-25 years) to receive money, manage it and make payments. The app brings convenience to parents too, as it enables them to send money to their children, and to monitor their spending and saving habits. More here ->

Pastel, a Nigerian bookkeeping and digital platform for merchants, has raised $5.5M. Pastel provides a digital bookkeeping app for small businesses to monitor/manag transactions and customers, and effectively manage customers who owe them. More here ->

Jar, an Indian savings app, raised $22.6m in funding at a $300m valuation led by Tiger Global. Jar, founded in January 2021 by two engineers, Misbah Ashraf and Nishchay AG, will use the fresh funds to expand into multiple financial services like facilitating lending, selling insurance products and advising people on investing in financial products from mutual funds to fixed deposits. More here ->

Crypto

Rocketplace, the “next-generation asset management platform for crypto” has raised $9 million in seed funding. Rocketplace — which offers commission-free trading of more than 30 tokens — claims to “not be just another crypto exchange.” More here ->

Primitive, a New York-based decentralized finance startup, raised $9m in Series A funding. More here ->

Insuretechs

Some recent funding news in the insuretech space include:

Bento ($8.1M, Schooner Capital): Health: End-to-end dental coverage platform and provider for the group benefits market.

Reserv ($8M, Altai Ventures): Claims: Digital TPA for Property & Casualty adjusters providing real-time metrics and AI-driven solutions to complex claims.

Koffie Ins ($11M, Anthemis Group): P&C: Digital MGA focused on the trucking industry using machine learning and telematics for risk reduction and accelerated underwriting.

Ranger ($5.25M, Lerer Hippeau Ventures): P&C: Agent-focused platform designed to support accuracy in homeowner policy valuation and cross sales.

Proptechs

Closinglock, an Austin-based real estate transaction tools startup, raised $4m in seed funding. ClosingLock is a provider of wire fraud prevention software that is designed to protect title companies, attorney offices, and their customers from social engineering, email spoofing, clone phishing, email hacking, imposter fraud, and compromised accounts. More here ->

Agora, a rapidly growing real estate investment management platform and financial products providerm has raised a $20M Series A round. Agora he,ps companies automate everything from fundraising to investment management, to reporting, to payments, to secure document sharing and tax operations. More here ->

From the Stash

USAA Life Insurance to partner with Human API | Insurtech Insights — www.insurtechinsights.com USAA Life announced a partnership with Human API, a health data platform, to further digitize the life insurance buying process...

Introducing Robinhood Advanced Charts — blog.robinhood.com The single most requested feature from advanced investors will begin rolling out today

Introducing Robinhood Cash Card Offers — blog.robinhood.com Cash Card customers now earn cash back automatically at some of their favorite retailers with no activation or opt-in required

PayPal Users Can Now Transfer, Send, and Receive Bitcoin, Ethereum, Bitcoin Cash, and Litecoin — newsroom.paypal-corp.com PayPal now supports the transfer of cryptocurrencies between PayPal and other wallets and exchanges.

BigCommerce and Affirm Expand Partnership to Offer Affirm’s Adaptive Checkout™ as the Preferred Pay-Over-Time Solution | Business Wire — www.businesswire.com BigCommerce merchants can now offer Affirm’s flexible and transparent bi-weekly and monthly payment options to their customers.

AI Is Transforming How We Bank—and Regulators Need Help to Keep Up — www.theinformation.com Crypto may be hogging headlines, but it’s far from the only technological innovation causing problems for financial regulators. In particular, advances in a type of artificial intelligence known as machine learning are changing: how banks allocate credit; how banks manage their own risks ...

Fintech Investors Cherry-Pick Deals in Boom’s Aftermath — www.theinformation.com In October, QED Investors managing partner Nigel Morris addressed the CEOs of several dozen fintech startups in an Alexandria, Va., hotel at the venture capital firm’s annual summit. After two days of discussions—and a cycling trip in Shenandoah National Park—he had a message for them: “These ...

Tech Layoffs: US Startups And Tech Companies With Job Cuts In 2022 — news.crunchbase.com Tech layoffs in 2022 have included cuts at Netflix, Better, Fast and other U.S. companies. We track all the notable tech and startup layoffs of 2022.

Reports / Webinars

5 questions with … TD Bank Head of Integrated Sales and Advice Chris Yancey — bankautomationnews.com TD Bank’s head of integrated sales and advice for consumer distribution, Chris Yancey, has adapted his approach to relationship banking to meet the needs of both in-branch and mobile banking clients based on personal preferences collected through the bank’s customer relationship management (CRM) platform. The bank recently launched several technology initiatives, including its Next Evolution

Viewpoint: Can intelligent automation ensure the survival of the insurance industry? — www.insurtechinsights.com The economic viability of the insurance industry’s current business model has been under discussion for several years...

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