#451
A Storm Is Brewing

Adam Neumann’s new company gets a big check from Andreessen Horowitz - Flow, as Neumann’s new startup is called, will own and operate thousands of apartment rental units, marketing the housing to renters as a “branded product with consistent service and community features.” The firm’s investment in the company is about $350m, valuing the company at more than $1b before it even opens its doors. The investment is the largest individual check Andreessen Horowitz has ever written in a round of funding to a company. Read more

The reinvention of Goldman Sachs: what has David Solomon achieved? - After taking over as CEO of the bank, Solomon’s mission was to develop new income streams and “drive more durable revenue,” in the process making it easier for outside investors to understand a still enigmatic bank that had been structured as a private partnership until its initial public offering in 1999. Yet despite Solomon ploughing billions of dollars into businesses such as consumer banking, asset management and transaction services, little has changed in Goldman’s revenue mix since the days of his predecessor, Lloyd Blankfein. Trading and investment banking still make up the lion’s share. Read more

Social investment platform eToro to acquire fintech startup Gatsby for $50m - eToro, an Israel-based stock and crypto-trading platform, has agreed to acquire Gatsby, a Robinhood competitor, for $50m in cash and stock. This deal pulls eToro deeper into the U.S. market and allows the company to offer options trading — the largest source of revenue for Robinhood. Read more

LatAm's largest investment bank BTG Pactual launches Bitcoin, crypto exchange - The bank’s new trading platform is called Mynt and will enable users to have direct access to bitcoin, placing it among the first leading financial institutions in Brazil to do so. Additionally, the investment bank with over $200b in assets under custody will provide educational content for all of its users about bitcoin once users have established an account. Read more

Digital bank Revolut gets approval to offer crypto services throughout Europe - The authorization will let the firm, which was valued at $33b in a recent funding round, offer crypto services to its 17m customers in the European Economic Area out of a new crypto-asset hub in Cyprus. Revolut said its choice was down to the sophisticated regulatory regime of the island country which has also attracted the likes of Crypto.com, eToro and BitPanda. Read more

Affirm goes big on BigCommerce - Affirm has struck a partnership with BigCommerce, making it the preferred BNPL option on the e-commerce platform’s merchant checkout pages. The competition between BNPL providers is likely to be won by the company that is on as many checkout pages as possible. Affirm is taking the lead through partnerships with retailers, payment processors and e-commerce platforms. Read more

Covalto to become 1st Mexican fintech company on the US stock market - Mexican digital banking platform Covalto is planning to go public via a special purpose acquisition company (SPAC) merger, a move that would make it the first Mexican FinTech to trade on the United States markets. Read more

Crypto is taking a few small banks on a wild ride - Silvergate, Signature and Customers Bancorp gobbled up deposits from crypto companies shunned by bigger banks. Now, they are dealing with the bust. The plunge in crypto prices this year has taken the banks on a wild ride. At Silvergate, deposits swung by $5b in the second quarter, a nearly unheard of move for a bank of its size, before ending basically flat at $13.5b. Read more

Robinhood learns to nab interest income - Though customer trading remains the bulk of Robinhood’s revenue, the upswing in interest rates is helping show some progress on what the firm can do while many small traders are on the sidelines. Interest earned on corporate cash and investments and segregated customer cash and securities went from $2m in the first quarter to $16m. Margin interest revenue also rose sequentially, even as balances dipped lower. Read more

Federal Reserve finalizes guidelines for access to its payment systems - The Fed issued final guidelines this week for its 12 regional branches to use when evaluating applications for so-called master accounts with the central bank. Such accounts allow financial institutions—primarily banks—to move trillions of dollars a day on the Fed’s payment systems. Cryptocurrency companies would be subject to a higher level of review. Read more

University student makes $110m trading meme stock favorite Bed Bath & Beyond - Jake Freeman, an applied mathematics and economics major at the University of Southern California, acquired nearly 5m shares in Bed Bath & Beyond in July, after dismal earnings and the ousting of its chief executive sent its stock price plummeting. Freeman’s initial stake cost about $25m, which he said was mostly raised from friends and family. Read more

Galaxy Digital commits to Nasdaq listing after ending BitGo deal - Galaxy Digital is to press on with a planned listing on Nasdaq even as it called off plans to buy crypto custody platform BitGo for $1.2b. The Canadian-listed group said it was pulling out of the cash and shares deal, alleging BitGo had failed to provide audited financial results for the year to December 2021. BitGo disputed Galaxy’s statement and said it intended to hold Galaxy Digital legally responsible for its “improper decision” to terminate the deal. Read more

Wait, when did everyone start using Apple Pay? - The percentage of iPhones with Apple Pay activated was 10% in 2016 and 20% in 2017. Adoption nearly doubled again in 2018. It hit 50% by 2020. Now it’s around 75% and inching closer to ubiquity. Read more

Fidelity and BlackRock cut fintech giant Ant’s valuation lower - Global investors who bought private shares ahead of its suspended initial public offering ,including Boston-based Fidelity Investments, cut its estimate for Ant to $70b at the end of May. That’s down from $78b in June last year, and $235b just before Ant’s IPO was torpedoed by regulators in November 2020. Read more

Lloyds completes UK's first digital promissory note purchase - Promissory notes have been around for millennia, enabling transactions to be completed in lieu of cash by letting sellers get paid based on the creditworthiness of the purchaser. However, under the UK's Bills of Exchange Act, notes need to be a physical entity, meaning it can take a week or more for businesses to be paid. Lloyds says it has managed to address this. Read more