Fintech Highlights - 9/20/2024
Here's what we've been watching this week 👇
Pinned to the Top
Trading platform eToro will stop offering trading in nearly all types of crypto assets as part of a settlement with the U.S. Securities and Exchange Commission.
The settlement comes amid broader SEC scrutiny of retail stock trading apps that offer crypto services. Robinhood, for example, in May got a warning from the SEC about potential enforcement action over its crypto offerings.
eToro agreed to pay $1.5 million to settle SEC claims it operated an unregistered broker and clearing agency for facilitating trading of crypto assets that the regulator deemed as securities. It neither admitted nor denied the SEC’s findings. Going forward, the only crypto assets that U.S. customers can trade on eToro will be bitcoin, bitcoin cash, and ether.
The BFD
Sequoia Capital last week completed its $861 million purchase of Stripe shares from Sequoia limited partners, as reported by Axios.
Why it's the BFD: This is a stark example of just how thirsty LPs are for liquidity, as there was enough selling interest to fulfill the full allotment that Sequoia offered in July.
- It also could become a model for how VC firms deal with long-in-the-tooth portfolio companies.
Details: LPs in Sequoia funds raised between 2009 and 2012 sold at $27.51 per share, which is Stripe's most recent 409A mark and represents a $70 billion valuation.
- Some LPs exited completely, while some only sold a portion, and many also were buyers via commitments to more recent Sequoia funds.
The bottom line: "We are pleased that we are able to offer flexibility to our LPs and in doing so, deepening our commitment to Stripe, a company we are very bullish on long term. We are optimistic about Stripe's future and believe that Stripe is well-positioned to compound for many years to come." — Sequoia Capital spokesperson to Axios
M&A
Sentry Insurance agreed to acquire Nashville, Tenn.-based auto insurer The General from American Family Insurance for $1.7b. More here ->
Mercury, the SF fintech valued by VCs at $1.6b, acquired Teal, an accounting products startup seeded by Torch Capitaland Citi Ventures. mercury.com More here ->
Pockit, a British prepaid credit card startup that's raised over $50m in VC funding, is in talks to acquire the consumer arm of U.K. challenger bank Monese, which has raised nearly $300m from firms like Kinnevik and Augmentum Fintech, per Reuters. More here ->
Akur8, a French insurance pricing engine that's raised over $70m in VC funding, acquired Arius, a provider of property and casualty reserving software. More here ->
Paylocity is acquiring corporate spend startup Airbase for $325 million. It marks the second exit for founder Thejo Kote, and while it was a sales price that was markedly lower than what Airbase was valued at in 2021, it appeared to be an impressive exit. More here ->
C&R Software announced it has agreed to acquire social impact fintech SpringFour. More here ->
Dubai-based open banking platform Tarabut says it has acquired U.K.-based Vyne in an effort to expand its fintech services. More here ->
Bain Capital is seeking to sell Esure, a British auto ad home insurer that could fetch at least £1b, per Reuters. More here ->
Citigroup (NYSE: N) agreed to sell its global fiduciary and trust administration services business for $80m to JTC(LSE: JTC). More here ->
Phoenix Group (LSE: PHNX), a British insurer, withdrew its SunLife business from the auction block due to regulatory scrutiny. More here ->
HSBC (NYSE: HSBC) is in talks to sell its South African corporate banking unit to FirstRand, per Bloomberg. More here ->
Fintech
The SMB-focused bookkeeping, accounting and finance startup Finally raised $50 million in a Series B round of funding and secured a $150 million credit line. The deal came just months after a $10 million growth raise. In some respects, SMB-focused Finally competes with the likes of Brex and Ramp as it offers expense management and a corporate card. More here ->
More fintech:
Drip Capital, a Palo Alto, Calif., working capital startup, raised $23m in equity funding. It also secured $90m in debt led by the International Finance Corp. and East West Bank. More here ->
Versana, a New York-based syndicated loan platform, raised $26m from Barclays, Bank of America, Citi, Deutsche Bank, JPMorgan, Morgan Stanley, and Wells Fargo. The platform captures reference data directly from agent banks and administrative agents, ensuring unprecedented transparency and accuracy into loan-level details and portfolio positions. More here ->
Brico, an SF-based provider of SaaS for managing fintech and financial institution licenses, raised $8m in seed funding, per Axios Pro. The company empowers financial institutions and fintech companies to effortlessly navigate the complexities of acquiring, renewing, and managing various financial licenses across all 50 US states. More here ->
Agree, a SF-based agreements fintech, raised $3m in pre-seed funding. It provides solutions for creating, managing, and enforcing agreements, particularly in the fintech space with specialty in regulatory, P2P and customization. More here ->
Founded by former Uber and PayPal alums, Palm announced a $6.1 million seed round led by Speedinvest and Target Global. The company has built an all-in-one platform to let businesses move money between hundreds of bank accounts and subsidiaries in a more efficient way. More here ->
Form3, a British payment tech startup, raised $50m in Series C extension funding. The company has developed a cloud-based, managed payment technology platform that integrates across multiple payment schemes and connects with clients’ payment systems seamlessly. More here ->
Twenty7tec, a British mortgage application tech startup, raised £16.5m from BGF. Twenty7tec’s Velocity platform streamlines the entire mortgage journey, from initial product search and sourcing to application submission and completion. More here ->
Paymob, an Egyptian payments infrastructure, raised $22m in Series B funding. More here ->
Validus, a Singapore-based digital lending platform for small and medium businesses, secured $50 million in debt financing from HSBC under the ASEAN Growth Fund strategy. More here ->
Dubai-based Ziina, which now counts 50,000 retail and business customers after expanding its offerings to meet the needs of micro, small and medium-sized businesses in the UAE, netted $22 million in Series A funding led by Altos Ventures. More here ->
PastPay, a Hungarian invoice BNPL company, raised $13.3m in Series A funding..More here ->
Datricks, an Israeli financial integrity platform, raised $15m in Series A funding. More here ->
Investtech
Polly, an SF-based provider of mortgage capital markets software, raised $25m. The company offers a vertically integrated capital markets solution, adding value to the entire mortgage value chain – from rate lock through loan sale and delivery. More here ->
Cashmere, a lead generation startup for wealth managers, raised $3.6m in seed funding. More here ->
Aption, an Israeli equity management tool for founders, raised $2.4m in pre-seed funding led by Recursive Ventures, Motivate Ventures, and Carthona Capital, per Axios Pro. More here ->
Centricity, an Indian wealth management platform, raised $20m in seed funding. Centricity offers a simple, cost-effective, and transparent platform for investment professionals to manage client portfolios. More here ->
Insuretech
Sigo Seguros, an Austin, Texas-based auto insurer for Hispanic and Latino communities, raised $10.5m in Series A funding, per Axios Pro. More here ->
Korint, a French insurance SaaS startup, raised €5m led by Ventech. Korint is a French insurance SaaS startup that specializes in developing innovative insurance solutions for new professional mobility, including bike-sharing, carpooling, and other alternative transportation methods. More here ->
Neat, a French embedded insurance startup, raised around €30m in equity funding. Neat’s business model revolves around creating a full-stack approach to embedded insurance. This means that the company develops its own insurance products, underwriting, and actuarial teams, allowing it to create a wide range of insurance products that cater to different customer segments and industries. More here ->
Akur8, a French insurance pricing engine, raised $120m in Series C funding. More here ->
From the Stash
Shopify is adding PayPal to help process credit and debit card transactions - for its Shopify Payments payment processing service in the U.S. PayPal will join Stripe, which handles much of Shopify’s U.S. payment processing business. It marks PayPal’s latest effort to reinvigorate its business under CEO Alex Chriss and strengthen its ties with Shopify. More here ->
Transactions: Amex, Knot launch card-on-file solution - American Express and card-on-file management company Knot are launching a card-on-file payments solution to improve the payment experience at trusted retailers. “Amex has integrated with Knot’s CardSwitcher technology, which allows eligible card members to quickly and securely provide their payment information to participating merchants directly through the Amex website,” More here ->
AI, open banking to boost consumer credit access - AI coupled with an open banking framework provides better access to credit for consumers. The technology presents an opportunity for consumers with limited credit to obtain loans and make payments, Ben Soccorsy, head of data access and business development at Mastercard, said this week during the Finovate Fall event in New York City. More here ->
Bank of America spending $12B on technology annually - Bank of America is investing in technology initiatives as automation and digitalization remain priorities. The $3.2 trillion bank spends $12 billion annually on technology, a Bank of America spokesperson told Bank Automation News. Nearly a third of that $12 billion is spent on technology initiatives including innovation, Chief Executive Brian Moynihan said. More here ->
Fintech funding: AI accounts for 30% of $24B Q2 investment - While fintech funding has slowed in recent quarters, companies that focus on AI are attracting investor dollars. Funding for AI-focused fintechs more than doubled quarter over quarter to $24 billion in the second quarter, accounting for 30% of investments, according to Crunchbase. More here ->
78% of regional FIs say AI can help find new business - Regional and community banks are investing in AI for new business opportunities, revenue growth and efficiency gains. “Financial institutions are quite bullish when it comes to AI,” Allison Cerra, chief marketing officer at fintech Alkami, told Bank Automation News. More here ->
TD chief says probes show need for better staff accountability - Toronto-Dominion Bank employees need to take more accountability and act with more urgency on risks, Chief Executive Officer Bharat Masrani said, after the Canadian bank was rocked by sweeping money-laundering investigations in its US business. “The big lesson is you can’t take anything for granted,” Masrani said Wednesday at a financial-industry conference More here ->
More from the stash:
Evan Weinberger
Giovanna Bellotti Azevedo
Cecily Mauran
Reports & Webinars
Digital currencies may reshape finance
As blockchain technology advances, digital currencies are poised to disrupt traditional banking models and could redefine the global monetary landscape.
Access in-depth analysis from Citi on the future of digital currencies.
The Human Touch in the Digital Age: How UX Makes Insurance Personal
Customer expectations have never been higher. Static touch points and generic policies are no longer fit to satisfy tech-savvy customers. To keep pace with rapid UX advancements in E-commerce, carriers must make every touchpoint frictionless, personal, and omnichannel. Join us and learn the art of balancing tech adoption with keeping a human in the loop to truly transform your customer journeys.
Explore the latest strategies shaping the future of customer experience in the insurance industry on October 3, 2024 at 11 AM EDT
Register here ->
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