Hello Fintech Friends,
Quick logistical question: should this newsletter come out on Friday or Monday mornings? Would it make your life better to start the week with the fintech news you need, rather than end it?
No response = consent for me to A/B test on you :)
Please find another week of all things fintech below.
Quote of the week
“You can give a forecast, you can give a timeline, but never give both.”
- Ben Bernanke
Read of the week
It’s happening. The House of Representatives’ Financial Services Committee is proposing a universal basic income package to help the American economy. Elsewhere, the Federal Reserve pledges lending support. Elsewhere, even Mitt Romney backs a universal payment distribution (just give him your Venmo handle).
Banking and Credit Cards
Banks and credit card companies everywhere are stepping into the leadership void and proactively launching Covid-19 mitigation policies.
Goldman Sachs is waiving March interest to Apple Card holders affected by coronavirus. JP Morgan Chase will close 20% of its branches due to the virus. American Express is providing its customers with financial assistance. Nationwide will open branches an hour early just for vulnerable customers. Irish Bank AIB is eliminating contactless fees during the COVID epidemic. The Central Bank of Kenya is enacting emergency measures to boost mobile payments. The Australian Central Bank is promoting cashless payments.
Icici Bank in India rolls out a full-stack digital banking platform.
Swift is delaying its cross-border payments protocol migration to 2022.
Travelex owner Finablr’s shares halted trading as the firm is on the ‘edge of collapse.’
The Federal Reserve has axed their target rate down to 0%, and as goes the Fed, so go the neobanks. Those banks that previously competed for customers high APY sticker prices now offer relatively undifferentiated 0.25 - 0.5% APYs. It was always a question how these neobanks would insulate themselves from a shifting rate environment, or avoid the adverse selection of rate-shoppers as they worked to find ‘sticky’ deposits. Now, the onus is on them to build truly differentiated banking products to retain customers and continue growth.
Elsewhere in banking, the FDIC has approved an industrial banking (ILC) license for Square. Square will use the charter to launch Square Financial Services in 2021 to offer banking products, including deposit accounts and small business loans to its merchants. The license could help it reduce costs paid to partner banks, attract more deposits and reduce funding costs for lending products, and increase flexibility in new product launches.
In other neobank news, Revolut launches a bank for kids. Monzo moves into business banking. Emirati bank Liv will offer an in-app credit score. Moven is working on a cross-border payments venture in Saudi Arabia. Yapeal gets a Swiss banking license. One launches in private beta.
M-Pesa in Kenya waives all fees to discourage cash usage
Gusto adds a cash-out feature for mid-pay cycle payroll distributions.
7-11 partners with Arcus on payment solutions.
Amazon exec Maria Renz is joining SoFi to lead its credit card, brokerage, and bank account businesses.
Zero Card is closing down and pivoting entirely to focus on its Level Bank brand:
And last but certainly not least, here are all of this year’s Y-Combinator Demo Day fintech companies:
- 1 Angle Health https://www.anglehealth.com Health insurance carrier for startups
- 2 Bamboo http://investbamboo.com First online platform that enables Africans to buy US/Global securities
- 3 Benepass http://www.getbenepass.com The benefits card for startups and small businesses
- 4 Breezeful https://breezeful.com A digital mortgage broker
- 5 CrowdForce https://crowdforce.io App allows any local merchant in Africa to become a bank branch within minutes
- 6 delt.ai https://delt.ai Digital bank for SMEs in LatAm
- 7 Easyplan https://easyplan.in Money-market account for 250M middle-income Indians
- 8 Facio https://www.facio.com.br Low-priced payroll loans for employees in Brazil
- 9 Fondeadora https://fondeadora.com The first mobile-only bank in Mexico, built on its own bank charter
- 10 Gas Pos https://gaspos.co POS system for gas stations
- 11 GIGI Benefits http://www.gigibenefits.com Insurance and savings accounts for 150m gig workers in India
- 12 goDutch https://godutchpay.in Group payments for India
- 13 Grain https://trygrain.com Replaces credit card with an affordable line of credit attached to your debit card
- 14 Haven http://www.havenservicing.com Tech-enabled mortgage loan servicer
- 15 Homestead https://www.homestead.is Convert your garage into a rental property
- 16 Jenfi http://jenfi.com Lends money to small businesses in Asia based on revenue
- 17 Karat http://trykarat.com Credit for influencers to grow and manage their businesses
- 18 Kosh https://getkosh.com Turn credit-worthy individuals into micro-lenders in India
- 19 NearPe Payments https://nearpe.com Payment gateway for cash transactions in India
- 20 Nexu https://www.nexu.mx Financing platform for LatAm car dealerships
- 21 Paymobil http://www.paymobil.co Global Venmo using stablecoins
- 22 Pilot https://pilot.co Gusto for remote teams
- 23 Refund Giant https://www.refundgiant.com Fast, easy VAT tax refunds for tourists
- 24 Savvy https://www.gosavvy.com A new kind of employer health insurance for SMBs
- 25 Spenny http://spennyapp.com Acorns for India
- 26 Stark Bank https://starkbank.com Bank for tech companies in Brazil.
- 27 Swipe http://getswipe.com First Credit card for SMBs in Africa. Brex for Africa
- 28 Virgil Insurance https://www.virgilinsurance.com Online brokerage for medicare insurance plans
- 29 WorkPay https://myworkpay.com Gusto for Africa
- 30 yBANQ https://ybanq.com Bill.com for India
- 31 yearend http://yearend.com Software that helps startup employees optimize their equity and taxes
- 32 Yukstay http://www.yukstay.com Yukstay is building a tech-enabled brokerage for managed rentals in Indonesia
- 33 Zaam http://zaam.io End to end solution for B2B onboarding
- 34 ZeFi https://zefi.io High yield USD denominated savings account that gives users up to 7% interest on their deposits globally
- Bakkt, the digital currency unit of financial data provider InterContinental Exchange, raised a $300 million Series B to expand its product to retail investors.
- Small business retirement savings platform Human Interest raised a $40 million Series B.
- Fenbeitong, a Chinese fintech building corporate expense management tools, raised a $36 million Series B+.
- One, a neobank focused on the nuclear family as its core unit, secured a $17 million Series A.
- German business banking neobank Penta raised an €18.5 million round and expanded to Italy.
- Boro, which provides loans and financial education to students, raised a $12 million Series A.
- ING added €4.5 million to NLP processor Eigen Technologies’ Series B.
- European corporate expense management startup Payhawk raised a €3 million seed round.
- Swiss corporate expense automation software Expense Robot raised a €1.6 million seed.
- Nigerian startup YouVerify raised a $1.5 million seed to provide tools for financial institution consumer identity verification.
Exits and M&A
- The London Stock Exchange’s $27 billion acquisition of data provider Refinitiv was approved.
- Australian wealth manager AMP will likely cancel its sale of its $2.3 billion insurance business following the intervention of New Zealand’s central bank.