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The Front Page of Global Fintech

The the largest fintech community in the world. Subscribe to our newsletter to stay up to date on the latest in news opinions, and all things financial technology.

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How do startups choose their bank and corporate card? (TWIF 5/12)

How do startups choose their bank and corporate card? (TWIF 5/12)
City of God, 20 years on

Hello Fintech Friends,

Following up on Matthew Goldman's latest Signals piece on fintech banking, we are conducting a new survey to understand how fintech startups choose to bank and use corporate cards.

Please help us out by taking this quick survey!

TWIF: How Fintech Businesses Bank
Turn data collection into an experience with Typeform. Create beautiful online forms, surveys, quizzes, and so much more. Try it for FREE.

One respondent will be randomly selected to win an annual subscription to TWIF’s premium content edition, Signals.

Please find another week of fintech exits and deep reads below. (👍👎 Have feedback for us? Let us know!)

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📖 Read of the Week
May 2024: Stablecoins are helping create a buyer of second-to-last resort for US Treasurys
A long time ago I was a junior bond and FX trader, and a conversation I remember happening every few months during US Treasury Auctions was (paraphrasing) “Whats the China bid” Basically, was the People’s Bank of China (PBOC) going to be a buyer in this particular auction or not. In hindsight I can’t even remember if it ever mattered for any auctions I observed, but the theme I took away was that one day maybe the PBOC wouldn’t buy in an auction and the Treasury would be in trouble.

This read from Ayo discusses the phenomenon that fiat-backed (specifically: US dollar-backed) stablecoins are becoming a holder of systemic importance for US treasuries. The implication is that there is unsaturated retail global demand for the dollar as a reserve currency.

This finding wouldn't be too surprising: Taking an example from one of our portfolio companies, LetsBit – they originally built an Argentinian crypto exchange and found that many of their users were just buying and holding USDC. When they interviewed these users, they realized that the in-demand use case for their platform was avoiding the devaluation and volatility of the Argentine Peso. That led the company to start building out consumer banking and savings products, small business banking, and a stablecoin-backed Mastercard.

We take for granted the benefit of having a boring, relatively stable currency as our transaction base in the US – as well as having the majority of our online commerce denominated in dollars. But volatility is more often the norm for global consumers, making stablecoins an elegant regulatory arbitrage (stability-as-a-service)...

...While it lasts. If Chinese capital controls or Nigerian interventions to stabilize the Naira are any indication, central banks don't love the idea that their constituents can quickly pivot to other currencies. Hence the rush to pilot CBDCs restricted to bank-approved uses. As privately-issued stablecoins like Circle and Tether continue to gain market share, they'll probably butt heads with regulators. Facebook's attempt to create a global reserve currency with its Libra / Novi / Diem product is a cautionary tale in this genre.

☯️ Exits
🤝 M&A - Fintech
  • iyzico, a Turkish payment acceptance provider that services 120,000 merchants and 6 million consumers, will acquire B2B payments and collections solutions provider Paynet for $87 million.
  • Lesaka Technologies, a South African provider of transaction channels between formal business and un-banked and under-bank individuals, agreed to acquire paytech Adumo for around $85.9 million.
  • Private equity firm Gallant Capital acquired payments consultancy and testing specialist Fime and payments testing business UL Solutions and merged the two.
  • Basware, a provider of AP automation and invoice processing, acquired AP Matching, a provider of cloud-based solutions for managing invoices and reconciling statements.
  • Trimble, a software provider to the construction industry, acquired Flashtract, a construction billing software company.
  • Paymerang, which offers advanced solutions that integrate AI, data capture technologies, and electronic document workflows to address accounts payable challenges, was sold by Aldrich Capital to Corpay, a provider of B2B payments for education, healthcare, hospitality, and manufacturing.
  • Regulatory intelligence firm Cube acquired Reg-Room, which provides regulatory change monitoring and analysis to the financial services industry.
  • Accounts payable automation specialist TranscendAP spun out from IT services firm Optima Global Solutions.

🏦 M&A - Bank and FinServ
  • The Australian wealth management and corporate trust businesses Perpetual announced that they will be acquired by KKR for A$2.18 billion.
  • Canada's Brookfield Asset Management will invest about $1.5 billion in American private credit manager Castlelake.
  • Charlesbank Capital Partners took a majority stake in Perspective Financial, a financial advisor with £8 billion under management.
  • Spain's Banco Sabadell rejected the latest attempt by Banco Bilbao Vizcaya Argentaria to initiate takeover talks (the second attempt).
  • US investor Eldridge Industries is in talks to acquire private credit firm Hayfin Capital Management.

🌎 Fintech Around the World

Saudi Arabia’s fintech sector driving digital transformation

India: Digital fraud-hit banks turn to startups to cope with risks

Nigeria restricts fintech onboarding to stop KYC-evading crypto investors

The rapid evolution of payments in Latin America

📚 Deeper Reads & Features

How TikTok Is Wiring Gen Z’s Money Brain: Endless videos about the economy and consumerism are giving 20-somethings a case of ‘money dysmorphia’

FDIC Investigation Finds Culture Rife With Sexual Harassment, Discrimination

The CEO Who Hired His Wife, Gave His Dog a Title, and Brought Down a Bank

As Banks Cut Off Risky Fintechs, A Tiny Lender Leans In

FTX Has Billions More Than Needed to Pay Bankruptcy Victims

Opinion: Americans shouldn’t have to endure blocks and delays when wiring money globally

Enough Already! Funding Circle Deserves to Keep Their 7(a) Lending License

Breaking down the cost of building payments in-house for vertical SaaS companies

Fleet Card Masterclass with Coast Founder Daniel Simon

Are Community Banks Getting Squeezed Out Of Existence?

CB Insights’ list of 80+ Ramp M&A targets

Govt Discusses Cybersecurity And Digital Financial Fraud With Fintechs

Gen Z Sinks Deeper Into Debt: Inflation drives many to credit cards to cover costs, leaving them with bigger balances

Wild turkey spotted strutting around Manhattan after epic journey and New Jersey police wrangle runaway 200-pound pig named Pumba

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