Published:
Oct 23, 2023
Author:
Sarah Parsons Wolter
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Last October, we published ‘How Did Your Country Score?’, recapping our takeaways from the 2022 ‘Global Retirement Rankings’ report. This year’s report was released last week, and the data reveals some concerns around the U.S. retirement industry. In the latest assessment of the world's retirement systems, the U.S. landed a grade of C+: performing worse than last year, and showing a lag behind top performers like the Netherlands, Australia, and Sweden.
The U.S. gig economy is a major driver of these trends. Gig economy workers already accounted for 9% of the American workforce in 2021. Yet, as the gig economy workforce grows, more and more workers are not receiving traditional retirement benefits. While some white-collar workers in the U.S. have access to coverage through employers, gig economy workers often face a more difficult situation, as the government does not mandate retirement support for these types of workers.
Out of the estimated 58m individuals in the gig economy, most lack access to workplace retirement programs. As white-collar workers ride the retirement escalator, gig workers are left taking the stairs: 77% of these individuals intend to use personal savings as their primary retirement fund. However, it's not all bleak. To close this gap, innovative fintech companies targeting this demographic are developing more cost-effective, relevant products that are already emerging as some of the best suited solutions. While gig workers are still a long way from going out with flying colors, with the right innovations, they might just get their own rocket ship to retirement!
Portfolio News
Mexican auto financing platform Nexu raises $20m - Congratulations to FTC portfolio company Nexu on the announcement of their $20m Series B financing led by Valor Capital Group. In addition to the Series B round, the company has also raised a debt facility from HSBC. Other investors include Fintech Collective, Endeavor Catalyst, Altos Ventures, Wollef, Squareone, Clocktower Ventures, Gilgamesh, FJ Labs, Ivernet and Capem. Read more
B2B BNPL player Mondu registers with FCA and goes live in UK - The UK launch, which will see Mondu begin working with 16 British clients immediately, comes on the heels of expansion into the Netherlands and Austria, providing customers with a variety of services, including, MonduOnline B2B BNPL for e-commerce checkout and its recently launched MonduSell for multichannel sales, with flexible payment options of 30, 45, 60, and 90 days. The French market is another new addition from Mondu, currently enabled for buyers only and coinciding with the UK launch. Read more
Pemo teams with Mastercard to fuel UAE’s SME sector - Mastercard and Pemo, a UAE-based fintech startup that supports businesses across the Middle East, North Africa and Pakistan (MENAP), have initiated a strategic partnership to promote cashless, flexible expense management for SMEs in the UAE. Announced during Fintech Surge at GITEX 2023, the collaboration aims to support the drive towards a cashless economy by providing SMEs with access to digital spend management solutions that empower them to scale and grow. Read more
US fintech Plaid hires first chief financial officer on road to potential IPO - Former Expedia chief financial officer Eric Hart will join the 10-year-old company a year after leaving the travel group. His appointment fills a major vacancy in Plaid’s preparation for an initial public offering, which co-founder and chief executive Zach Perret has said is his aim for the company, without offering a timeline. Read more
A Not-So-Rosy Retirement
The US gets a C+ in retirement - The U.S. came in 22nd out of 47 countries, according to the latest Mercer CFA Institute Global Pension Index, with a slightly lower score than a year ago. The way Americans fund their retirement is primarily through Social Security and savings in 401(k)s and individual retirement accounts. That setup has some major shortcomings, particularly when it comes to long-term solvency, the report said. Read more
Experts forecast more retirement plan options for gig workers - Currently, the majority of the roughly 58m people estimated to be working in the gig economy do not have access to a workplace retirement plan, and 77% plan to fund their retirement out of personal savings, according to recent surveying from Legal & General Group. Read more
Catch, offering health insurance for gig workers, relaunches with new owners - The new owners are relaunching the company in time for open enrollment starting November 1, but without the retirement benefits piece. The company just offers health, dental and vision insurance. Read more
Industry News
How Visa and Mastercard are fighting friendly fraud - Friendly fraud — which refers to customers requesting a refund for an otherwise legitimate payment — is getting worse, increasing the danger of financial losses and the risk of security overreach to fight the problem. Officially called first party fraud, this scam has expanded in recent years, particularly during the growth of e-commerce during and after the pandemic, and through the recent bout of high inflation. Read more
CFPB proposes open banking regulations - The CFPB's Personal Financial Data Rights rule would require banks and other financial services providers to make data related to consumers' transactions and accounts available to approved third parties. If enacted, the new rules would also enable consumers to more easily switch between banks and other financial services providers, while also protecting their data from misuse. Read more
The latest tool to refinance short-term debt: double-dip financing - Given the challenging environment, a small but growing array of businesses are turning to double-dip loans to bolster liquidity, giving new lenders additional and sometimes superior claims on assets compared with existing lenders. Companies often pursue these deals to avoid running out of cash and lenders usually purchase the loans for increased collateral and potentially higher returns. Read more
Ferrari to start accepting crypto payments in US, Europe to follow - The company has said the move is in response to demand from its wealthy customers. Ferrari will use crypto payments provider BitPay to process transactions in bitcoin (BTC), ether (ETH) and stablecoin USD coin (USDC) in the initial rollout in the US. Read more
Goldman Sachs wants out of consumer lending. Employees say it can’t happen fast enough - Some senior executives at Goldman want out of what remains of consumer lending—namely, the Apple credit card and other Apple products, and the General Motors credit card. No decision has been made, although Goldman has held conversations recently with American Express. Read more
EQT testing private stock sales as IPO markets ‘dysfunctional’ - EQT chief executive Christian Sinding said private auctions among its 1,100 limited partners could provide a novel way for its backers to monetise their illiquid holdings without the need to sell shares in initial public offerings. A slowdown in dealmaking and lack of IPO prospects have prompted fund managers to embrace more creative financial engineering techniques to return capital to their LPs. Read more
Payments giants want a slice of Africa’s mobile money - Global payment giants, including Mastercard and Visa, are pouring billions of dollars into African companies that have powered a sharp expansion in e-commerce on the continent. Recent deals have focused on mobile-money operators, which allow users to send funds using simple cell phones, and platforms that facilitate such payments for merchants without relying on credit cards or bank accounts. Read more
Why the US Government has $5b in Bitcoin - The US' stash of some 200,000 bitcoin was seized from cybercriminals and darknet markets. It is primarily offline in encrypted, password-protected storage devices known as hardware wallets that are controlled by the Justice Department, the IRS or another agency. Read more
European payments giant Nexi soars as CVC said to weigh bid - The buyout group has been evaluating Nexi for some time, and payments has remained a hot space for mergers, acquisitions and spinouts, with Nexi being a major acquirer. However, the stockholder enthusiasm is somewhat overwrought as CVC is reportedly only weighing a bid, with no certainty one will be forthcoming — nor at what price. Read more
FTX plans to return 90% of customer funds, but there's a catch - The debtors propose dividing missing customer assets into three pools based on circumstances at the start of the Chapter 11 cases: Assets segregated for FTX.com customers; Assets for FTX.US customers; and a "General Pool" of other assets. Read more
It’s getting too expensive to have fun - Ticket prices for live entertainment events, from Taylor Swift concerts to National Football League games and high-season Disney theme-park visits, rose at a startling rate this year, triggering a phenomenon that analysts have dubbed “funflation.” Read more
A banker was fired after admitting the 2 sandwiches, 2 pastas, and 2 coffees he'd expensed on a work trip weren't all for him - Citi has won an employment lawsuit against an employee who was fired after claiming expenses for food and drink for his partner during a business trip and misleading the bank about it. London-based former analyst Szabolcs Fekete had sued the bank, accusing it of unfair dismissal after being fired last year over the expenses claim. Read more
ECB starts preparation for digital euro in multi-year project - The project would let people in the 20 countries that share the single currency make electronic payments securely and free of charge. The ECB said it would start a two-year "preparation phase" for the digital euro on November 1, in which it would finalize rules, choose its private-sector partners and do some "testing and experimentation". Read more
Select Financings
Akahu - New Zealand based open finance startup raised $1.4m in Seed funding led by Red Bird Ventures. Read more
Anonybit - New York based personal privacy and digital security startup raised $3m in Seed funding led by Jam Fintop. Read more
Basis - New York based AI platform for accounting firms raised $3.6m in Seed funding led by Better Tomorrow Ventures. Read more
Darwinium - San Francisco based fraud detection startup raised $18m in Series A funding led by U.S. Venture Partners. Read more
Finzly - Charlotte based payments infrastructure company for financial institutions raised $10m in Series A funding led by TZP Growth Equity. Read more
Flanks - Barcelona based API for automated wealth services raised $8m in Series A funding led by Earlybird VC. Read more
Globacap - London based startup focused on digitizing and automating private capital markets raised $21m in Series B funding led by Moore Strategic Ventures. Read more
Hiive - Vancouver based marketplace to buy and sell shares of privately held companies raised $4.2m in new funding led by Uncorrelated Ventures. Read more
Jiraaf - Bengaluru based fixed income investment startup raised $8.7m in Series B funding led by Accel and Harmony Partners. Read more
Neo - Indian based wealth and asset management startup raised $35m in growth funding led by Peak XV Partners. Read more
Nirvana Insurance - San Francisco based insurer of commercial truck fleets raised $57m in Series B funding led by Lightspeed Venture Partners. Read more
Nova Credit - New York based startup focused on immigrant credit history raised $45m in Series C funding led by Canapi Ventures. Read more
Procurify - Canada based enterprise procurement startup raised $50m in Series C funding led by Ten Coves Capital. Read more
Prove Identity - New York based fraud reduction startup raised $40m in growth funding led by MassMutual Ventures and Capital One Ventures. Read more
QuoteMachine - Montreal based customer quote and invoicing startup raised $3.7m in Seed funding led by Manresa Ventures. Read more
Statement - New York based financial management platform for businesses raised $12m in Seed funding led by Glilot Capital Partners. Read more
SynFutures - Singapore based decentralized exchange for perpetual futures raised $22m in Series B funding led by Pantera Capital. Read more
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