Aug 27, 2024 8 min read

Fintech Highlights - 8/27/2024

State Street taps Taurus to build out digital assets services. Tally shutters after failing to raise capital. Klarna is expanding into banking. And more.

Here's what we've been reading and watching this week 👇

Pinned to the Top

a group of pills floating in the air — State Street Taps Taurus to Build Out Digital Assets Services

State Street, the Boston-based custody and financial services giant, has tapped Swiss startup Taurus as a technology vendor for its digital assets services.

State Street will use Taurus’ technology to build tokenization services for clients, allowing them to record and transfer traditional securities or funds on blockchain with instant settlement. It will also build custody services to safeguard the digital assets. The partnership resembles one that BNY Mellon has already inked with startup Fireblocks, and highlights the growing adoption of tokenization among traditional financial firms.

The bank still intends to provide custody for crypto assets, including bitcoin, in addition to tokenized versions of traditional assets, according to Donna Milrod, State Street’s chief product officer and head of State Street Digital. But State Street is waiting for changes in regulatory guidance that would no longer require it to treat crypto under custody as liabilities on its balance sheet, Milrod said. Such a change would make it less costly for banks to comply with separate capital requirements.

Taurus raised $65 million in early 2023, led by Credit Suisse, with participation from Deutsche Bank, Arab Bank Switzerland and others. It provides digital asset custody and tokenization services to Deutsche Bank.

The BFD

black and orange card on brown wooden table — Tally shutters after failing to raise capital

Tally, a 9-year-old fintech that helped consumers manage and pay off their credit card debt, is closing its doors after an unsuccessful attempt at securing more capital.

Why this is the BFD: Generally, startup shutdowns are way up this year. In this case, after raising $172 million from investors such as Andreessen Horowitz and Kleiner Perkins (two of the biggest venture investors in the country) the company failed to find further funding to support the model.

CEO and co-founder Jason Brown: “This decision was incredibly difficult, but I’m proud of what Tally accomplished over the years. … While Tally's journey is ending, the drive to help people manage their debt more effectively continues, and I’m hopeful that others will build on what we started.”

ALSO:

turned-on monitor — Klarna continues to broaden their offering

Swedish fintech giant Klarna announced last week that it was expanding into banking.

The company started out as a buy now, pay later provider and has gradually broadened its offerings over the years.

Klarna is now offering a new “balance” account and the ability to earn cash back on purchases made through its app. While U.S. users can’t yet earn interest on any money they store in the account, European users can earn up to 3.58%.

The move puts Klarna in competition with other fintechs, such as Revolut, as well as incumbents such as Bank of America and JPMorgan Chase. It comes just a few months after it launched a credit card in the U.S.

M&A

Klarna acquired the assets of defunct BNPL firm Laybuy in New Zealand. More here ->

Rise Growth Partners made a minority equity investment in Bleakley, a Fairfield, N.J., wealth advisory and financial planning firm with nearly $10b in advisory assets. More here ->

TipRanks, which uses AI and other analytics to build datasets and other insights to help people make smarter bids on stocks, is getting snapped up for $200 million by Prytek, a developer of business process products for financial services, human resources and other enterprise verticals. More here ->

Stellex Capital Management acquired Canadian financial data company Fincentric from S&P Global and combined it with a unit of Stellex-backed Just Build It. More here ->

CTBC Financial is prepping a takeover of rival Taiwanese financial conglomerate Shin Kong Financial, per The Economic Daily. More here ->

Bitfarms (Nasdaq: BITF) agreed to buy rival crypto miner Stronghold Digital Mining (Nasdaq: SDIG) in a $175m all-stock deal ($125m in equity value). More here ->

DMI Finance, an Indian shadow bank, is raising funding from Mitsubishi UFJ at around a $3b valuation. More here ->

Fintech

Revenew, an SF-based payment operations and optimization platform, raised $4.6m. Revenew positions itself as a growth partner for platforms and marketplaces, addressing the intersection of embedded finance and the rising platform business mode. More here ->

Skyfire, an SF-based payments network for AI, raised $8.5m in seed funding. The company aims to be the "Visa for AI" by enabling autonomous financial transactions for AI agents. More here ->

Efficient Capital Labs, a provider of revenue-based financing to emerging market SaaS businesses, raised $11m in Series A funding. More here ->

Your Money Line, an Indianapolis-based workplace financial wellness platform, raised a $4.5m Series A. Your Money Line combines AI-powered software with live financial coaching to help employees improve their financial stability and confidence. More here ->

Thera, a provider of back-office fintech tools, raised $4m in seed funding from YC and 10x Founders. More here ->

PostEx, a Pakistani financing and logistics startup for online retailers, raised $7.3m in pre-Series A funding. The company offers instant access to capital for online merchants, addressing the challenges of traditional financing methods More here ->

More fintech:

Transaction banking startup Transbnk raises $4 million

TransBnk, a Mumbai based Transaction Banking Platform, has successfully raised $4 million in Series A funding. The round was led by 8i Ventures, the early-stage India-focused VC fund known for its notable successes in the fintech space, including M2P, Slice, Easebuzz, among others.

FinextraEditorial Team

Investtech

Siepe, a Dallas provider of software to the private credit industry, raised $30m in Series B funding led by WestCap, per Axios Pro. The company offers solutions for front, middle, and back-office teams of private credit asset managers and CLOs. More here ->

Crypto

Thalex, a crypto derivatives exchange that partners with other exchanges, raised a €3m Series A extension, per Axios Pro. More here ->

Proptech

Trunk Tools, a New York provider of automation solutions for construction documentation, raised $20m in Series A funding led by Redpoint. More here ->

Rentvine, an Estero, Fla., provider of property management software for the long-term residential rental market, raised $74m from Mainsail Partners. More here ->

From the Stash

Transactions: FIs invest in credit decision platforms - Gather Federal Credit Union has selected credit underwriting platform Zest AI to reduce fraudulent activity during the loan origination and decisioning process. AI-driven Zest Protect can help financial institutions fight identity fraud and identify fake documents during the loan procedure, Adam Kleinman, head of strategy and client success at Zest AI, told Bank Automation News. More here ->

Facing increasing pressure from regulators, Apple on August 14 announced it’s opening up NFC transactions to third-party developers - NFC, or near field communication, is the short-range wireless technology that powers Apple Pay and Wallet. The tech giant also said it generated a record $24.2 billion in revenue from its services unit, which includes payments, in the second quarter. More here ->

TD Bank expects to pay $2.6B for US compliance lapse - TD Bank took a provision of $2.6 billion in the third quarter as it estimates the cost of fines from its U.S.-based money laundering compliance lapses. During the Canadian bank’s Q3 earnings call, Chief Executive Bharat Masrani gave an update on TD’s remediation program resulting from the U.S. money laundering investigations. More here ->

CFPB funding under new scrutiny - The Consumer Financial Protection Bureau is facing additional challenges that call into question the legality of the bureau’s funding. The Supreme Court upheld the CFPB’s funding mechanism in May. In several recent lawsuits, companies sued by the CFPB for violations argue that the bureau is using funds it should not have. More here ->

Regional FIs deploy tech to remain competitive - Regional banks are deploying technology to keep up with client demand and compete with major financial institutions. The $62 billion Valley Bank joins other financial institutions, including the $18 billion Alliant Credit Union, $40 billion EverBank and $170 billion Navy Federal Credit Union, in investing in tech stacks to keep up with digital demands More here ->

More from the stash:

Reports / Webinars

Plaid - The Future of Finance: 4 Trends Driving Growth

Fraudsters are exploiting AI. Customers actually want to pay by bank. Trends like these are shaping the next era of finance. And we’ve got the insights you need to be ready.

Get the report ->

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