Hello Fintech Friends,
After greater-than-expected interest in a special edition of this newsletter focused on angel investment, I’m going to try to corral experienced seed-stage fintech investors to compile some tips and best practices. My #1 tip to myself has always been: expect to lose all your money and you will never be disappointed.
Please find another week of fintech and banking news below.
Quote of the week
“That’s not a newsletter. You’re not writing anything. You’re just dropping links. Get tf out.”
- Reggie James, Product Lost / HipCityReg (source)
Open role spotlight
Read of the week
The CFPB continues to step back from its primary role as a regulator, rescinding planned rules it had formerly proposed to limit the excesses of payday lending and protect consumers from predatory practices. Payday loans exacerbate bankruptcy. It’s important for a free market to provide credit products that are appropriately priced for consumer risk, but it’s equally important for consumers to understand the terms of the financial contracts they sign and to be protected from outsized harm from those products. If the primary rulemaker for consumer financial products is going to abdicate its position, hopefully another will step in to fill its shoes.
Banking and Credit Cards
AmEx is offering small business cash-back rewards to incentivize more shoppers to support small businesses: when shoppers spend $10, they will receive $5 back. Visa, Mastercard, AmEx, and Discover are teaming up to promote their one-click online checkout alternative to forms of payment like Paypal. Mastercard, meanwhile, launched an Inclusive Growth Score to help facilitate economic activity in underserved communities and begins rolling out its ‘true name’ cards for transgender cardholders.
ING Bank will make small business loans in Germany through a partnership with Amazon. TSB Bank is partnering with ApTap to launch in-app bill management and subscription switching. Spain’s Banco Sabadell is using WhatsApp to deliver home insurance to account-holders.
HFDC bank in India has seen a huge increase in lending due to the shutdown, as Indian digital payment activity rebounds to pre-covid levels. Hang Seng bank in Hong Kong is targeting new investors with an in-app mutual fund fractional investing product starting at HK$1.
Zimbabwean government attempts to cap mobile money usage are driving 800% hyperinflation and undermining the value of its struggling currency.
Deutsche Bank and Google signed a multi-year cloud deal. Indonesia’s Amar Bank will launch an app-only bank via Google Cloud. The Single Euro Payments Area expanded its maximum Instant Credit Transfer limit to €100,000.
Braid is launching a group account debit card for splitting shared expenses.
The Creator Cash app launched to give Youtube stars early access to earnings and revenue analytics.
Corporate card and banking product Brex added two more features for customers: mobile check deposits and transaction approval flows.
Monument is obtaining a banking license to release a UK neobank focused on “mass affluent” consumers with a net worth between £250,000 and £5 million. SoFi applied for a national bank charter in order to continue insourcing the layers of its financial technology stack.
Square’s Cash App is reportedly making an appearance in Nintendo’s Animal Crossing game and Apple is reportedly working on QR code in-person payment for Apple Pay. Chinese ride-hailing app Didi Chuxing is testing the government’s digital currency.
German prosecutors arrested the head of Wirecard’s Dubai-based CardSystems Middle East unit, suspected of involvement in the $2 billion fraud scandal. Not wanting to be left out of the party, US prosecutors and the FBI are now probing Wirecard in a $100 million cannabis fraud.
- TransferWise is closing in on a $5 billion valuation in a $300 million secondary share sale.
- Supply chain finance startup Taulia raised $60 million from backers including Ping An and JP Morgan.
- Indonesian payments platform Payfazz closed a $53 million Series B to build out its service ecosystem and grow internationally.
- Banca Idea Project (working name), an Italian small business-focused neobank, raised €45 million.
- Growers Edge raised a $40 million Series B to bring financial technology to farmers.
- Starling Bank is applying for another round of funding from the Royal Bank of Scotland’s bailout fund, looking to raise up to £35 million in new equity.
- Wagestream, the UK real-time wage access startup, raised £20 million to consolidate its UK market share and expand internationally.
- Live Oak Bank and First Data’s joint venture, Apiture, raised $20 million to build a digital banking-as-a-service platform.
- Flinks, the Canada-focused bank account aggregation service, raised a $16 million Series A.
- Quaestor, a venture portfolio financial data and business metrics company, raised $5.8 million in seed funding
- Robocash, a platform for consumer marketplace lending in Russia, Kazakhstan, Spain, India, Indonesia, Vietnam and the Philippines, is raising $5 million to launch a neobank in the Philippines, and plans a $70 million IPO on the ASX in December.
- Radix, a UK-based decentralized finance protocol, raised $4.1 million in funding.
- ChannelMeter raised a $4 million seed round for its Creator Cash app to give Youtubers early earnings access and revenue tools.
- Lean Technologies, a Saudi account aggregation fintech (similar to Plaid or DAPI), raised a $3.5 million seed.
- Senso raised $3 million for a platform to help financial institutions strengthen customer relationships.
- German digital debt collection platform Pair Finance announced it has achieved profitability and raised €2 million from existing investors.
- AML and risk-monitoring startup Vital4 raised an unspecified seed round.
- Polish payments firm Verestro raised an undisclosed amount from Mastercard.
Exits and M&A
- In the latest non-US Chinese fintech IPO, Alibaba’s Ant Financial is planning a Hong Kong IPO at a target valuation of over $200 billion.
- KKR will acquire retirement planning and investing firm Atlantic Financial Group for 1x its book value of $4.4 billion.
- Indian payment gateway Billdesk is again looking for an acquirer, after an unsuccessful sale attempt two years ago, at a price of up to $2.5 billion.
- nCino priced its IPO between $22 and $24 per share, to raise up to $175 million at a $2 billion valuation.
- Private equity firm Silver Lake will acquire French payroll provider Silae at a reported €500 million valuation.
- Paytm will acquire Indian insurance platform Raheja QBE for $76 million to provide health, home, and vehicle insurance to consumers.
- Quicken Loans announced that it will IPO and rename itself to Rocket Companies.
- Private equity-backed Mercer Global Advisors will acquire wealth manager MJ Smith.
- UK payments API platform Rapyd announced its acquisition of Icelandic payment card provider Korta.
- Pine Labs, an Indian payments company backed by Mastercard, is bidding to acquire Wirecard’s business in southeast Asia and India.
- British peer-to-peer lender Lending Works sold itself to UK private equity firm Intriva Capital.