Hello Fintech Friends,
To give everyone (myself included) some downtime for the holiday weekend, I’m sending this out as a Sunday evening / Monday morning read this week.
It was also pointed out to me that the June 19th issue of TWIF may have missed some inboxes. I think the newsletter is getting a bit lengthy for (blame the news) and got caught up in spam filters; I’m going to spend more time finding creative ways to make it concise.
Please find another week of fintech and banking news below.
Quote of the week
“The credit blind spot has further clouded the outlook for lenders. For years, strong consumer spending and borrowing helped propel them to record profits. Now the economy is in shambles, and they are trying to figure out what is going to happen to all of the debt Americans racked up in better times.”
- AnnaMaria Andriotis; Flying Blind Into a Credit Storm, WSJ (source)
Open role spotlight
Paypal Ventures is looking for a Business Development Director. Open to introduce anyone applying to the recruiting team for the role.
Read of the week
Where real-time payment rails and consumer financial APIs have gained a lot of traction in recent years, business-to-business payments still lag behind in innovation. Still, B2B payments account for $25 trillion in the US alone each year, and business invoices take over 37 days to settle on average. Pymnts dissects companies moving into the international B2B payments space to speed up the rate at which businesses can move money to better lubricate commerce.
Banking and Credit Cards
As different startups, fintechs, and financial services companies fight to tackle the racial imbalance in retail banking, the Blackout Coalition lists black-owned banks and credit unions and Netflix moves $100 million of its balance sheet capital into black-run banks.
Sixteen European banks have formed the European Payments Initiative, a direct payment rails network to challenge card networks like Visa and Mastercard. Meanwhile, the Nordic payments area P27 is still on-track.
Embattled German bank Deutsche Bank is reportedly considering a lifeline to embattled German fintech Wirecard. German neobank solarisBank has partnered with American Express to build installment lending into credit card purchases. And French bank BNP Paribas will give its premium accountholders contactless fingerprint ID cards.
Japanese bank Nomura debuted an open banking tool to let customers see their holdings across all financial institutions. ING Belgium bank has partnered with Swedish fintech Minna Technologies to give customers a subscription management tool in their banking dashboards, as the Swedish government moves to clamp down on installment lending.
Zambia has seen 126% growth in the use of mobile payments and Ghana is targeting 85% consumer financial inclusion by the end of 2023. Panic on Zimbabwe’s stock market forced the government to close the bourse last week.
The OCC is debuting new fintech charters, the first of which will be a national version of a state money transmitter license. The Bank for International Settlements will expand its Innovation Hub into Toronto, London, Frankfurt & Paris and Stockholm.
And Singapore’s Competition and Consumer Commission is investigating the London Stock Exchange’s planned $27 billion takeover of Refinitiv.
Apple launched Path To Apple Card, a program that helps consumers fix past credit report issues so that they can qualify for an Apple Card in four months. Similarly, Chime launched a credit builder secured card product and announced a financial literacy partnership with rapper 21 Savage.
US private beta neobank Point unveiled its challenger bank with rewards on debit card spending.
Quirk is a personality test to detect users’ “money personality.”
Modern Treasury announced a Netsuite continuous accounting integration.
African fintech Paystack launched Paystack Commerce, similar to Shopify, to help African businesses sell their goods online.
Bud launched in the UK to allow users to make direct payments via API that bypass credit cards.
Square’s Cash App is making loans.
CashDrop is…. cheaper Doordash?
Close to 70% of UK fintechs have a cash runway of just 6 months, according to a new poll by Innovate Finance.
After a wave of fintech card problems, the UK Financial Conduct Authority lifted a ban on using Wirecard’s payment rails. Meanwhile, the company is looking to spin off Wirecard North America to a buyer, potential partners like Grab are holding off, German politicians are campaigning to save the company, and its offices are being raided by prosecutors as German financial regulator Bafin faces a potential house-cleaning.
Latin American e-commerce and fintech giant Rappi will partner with Banorte to offer financial services across the continent - this comes as more investors pile into Latin American fintechs. South African fintech startup Mama Money is partnering with Western Union with an eye on global expansion. Chinese fintech giant OPay, which operates in Nigeria, will meanwhile shut down most of its fintech services other than its direct payment operation.
A new class-action lawsuit alleges that Plaid obtained user financial information without consent. Merchants are complaining that Square is withholding up to 30% of their funds in the pandemic. And payday lender Elevate Credit has entered bankruptcy proceedings in the UK.
Raisin, Funding Circle, Moneyfarm, N26 and TransferWise announced the creation of the European Fintech Association, a non-profit aimed at creating one European fintech market. Fintech Scotland, meanwhile, will dedicate £22.5 million in innovation funding to an Open Finance Centre.
And Google Pay has been fully authorized by Indian legislators.
h/t Cokie Hasiotis
- Publicly-traded payments software provider WEX raised $400 million in new capital through a combination of convertible notes and private placements.
- German neobank solarisBank raised a €60 million Series C at a valuation of €320 million.
- ubble, a French startup focused on building a remote biometric facial recognition software for financial services companies, raised €10 million.
- DigniFi, a financing platform for auto repairs, raised a $14 million Series A.
- Australian wealthtech company PictureWealth raised $12 million in funding and bought rivel NEO Financial Solutions.
- Spiff, which automates commissions payments for salespeople, raised $10 million in new funding.
- Runway, a platform to build tools for automating business financial insights, raised a $4.5 million seed.
- Willa, a Swedish-US fintech that pays freelancers immediately when they secure contracts, raised $3 million.
- Worky, a Mexican payroll platform for small and medium-sized businesses, raised a $3 million seed round.
- Symmetrical.ai, a British and Polish fintech startup that helps employers pair employees with responsible financial products, raised a €5.6 million combination of equity and debt.
Exits and M&A
- National Commercial Bank in Saudi Arabia agreed to a takeover of rival Samba Financial Group for $13 billion.
- In a possible high-water mark for roboadvisors, Empower Retirement will acquire personal financial management software Personal Capital for $825 million in cash and $175 million in earnouts.
- Lemonade experienced an IPO pop, ending the day with a $3.8 billion valuation, more than twice its target price.
- Fusion Acquisition, a special purpose acquisition company focused on buying a fintech valued between $750 million and $3 billion, raised $305 million in its IPO.
- Singapore Exchange completes its takeover of FX market BidFX by buying up 80% for $128 million in cash.
- French bank Société Générale will acquire small business and freelancer neobank Shine for around €100 million in an all-cash deal.
- Mercer Global Advisors acquired Argosy Wealth Management, a high net worth wealth manager with $330 million AUM.
- Financial advisory platforms Orion Advisor Solutions and Brinker Capital will merge.
- MFS Africa, a digital payments hub, will acquire small business digital payments manager Beyonic’s entire team and offer its enterprise-focused service as a rebranded product.
- Experian will take a 60% stake in German credit management provider Arvato Financial Solutions Risk Management.