#499
Be Very, Very Quiet
Published:
Jul 31, 2023
Author:
Sarah Parsons Wolter
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Can you keep a secret? Apparently, founders these days can. According to LinkedIn data, the number of people reporting that they work at a startup operating in stealth mode has tripled in the past two years. So, why the sudden love for mystery? According to founders, staying in stealth can protect their ideas from early competitive headwinds and allow teams to focus on creating a stellar product instead of chasing PR headlines.
Not to mention the heightened allure to investors - those who stay in stealth are staying in control - and receiving much higher than usual inbound. With new data tools emerging, VCs are utilizing tracking tools like Specter and Gravity to uncover the hidden gems of top talent turnover. These emerging data tracking tools aggregate network and email-driven data, allowing investors to identify ex-senior employees of successful startups and founders when they’re just beginning to raise.
Shifting norms span the full spectrum of founders and investors. Whether to protect their brainchild or attract investor interest, founders are finding power and signaling effects from the shadows. Meanwhile data driven tools are becoming a “need to have” rather than a “nice to have” as investors are catching up to track down these stealth opportunities. While VCs have long been channeling their inner Elmer Fudd when it comes to investment ideas, founders are now playing too.
Portfolio News
Vestwell to acquire Gradifi Solutions, provider of workplace education services - The acquisition adds several new products to the Vestwell platform, including programs to help employees manage and pay down student debt, contribute to education savings accounts, and refinance student loans. Read more
Embroker partners with Dashlane and Cowbell to continue building single-destination risk mitigation solution - With these, Embroker increases customer security through Dashlane’s industry-renowned cyber protection services and expands its Cyber Liability coverage by offering Cowbell Cyber insurance to its existing and prospective customers. Read more
Plaid taps Cross River to offer real-time payments - Plaid chose Cross River as the first financial institution to support its real-time offering due to their existing partnership and Cross River’s proprietary API tech, which connects to multiple payment networks, including ACH, RTP, and eventually, the new FedNow system. Read more
Be Very, Very Quiet
The 'untold hack' for attracting VCs: building in stealth - Founders love to talk about their companies… but only when they’re ready. More and more are choosing to stay in the dark — erasing company names from LinkedIn, creating mysterious almost-blank websites and ignoring journalists' emails — and build in stealth. Read more
Industry News
Brazil's Pix used for more transactions than credit and debit cards combined - Brazil's Pix continues its runaway success, with more transactions made using the instant payments platform in the first quarter than credit and debit cards combined. Launched in late 2020 by the Central Bank of Brazil, account-to-account payment option PIX saw transactions for Q1 hit 8.1b, compared to 4.2b for credit cards and 3.8b for debit cards. Read more
Elon Musk the banker wants to take on Dimon where Google failed - Elon Musk’s grand vision is to turn Twitter into a one-stop shop for financial services. It’s hardly the first time a tech giant has sought to muscle in on Jamie Dimon’s turf, and history suggests an uphill battle for Musk. The landscape is filled with US technology firms that tried to take on banking behemoths, only to scale back their ambitions in the face of competition and protracted approval processes. Read more
NatWest chief executive Alison Rose steps down after Nigel Farage row - The move comes after she admitted to the inaccurate briefing of a BBC journalist about the closure of Nigel Farage’s bank account. Her departure, after more than three decades at the taxpayer-backed lender, marks the latest escalation in a high-profile row between the former UK Independence party leader and one of Britain’s biggest banks. Read more
Jack Ma-backed Ant plans restructuring, paving way for HK IPO - The company is looking at leaving its blockchain, database management services and international business out of a main entity that will be used to apply for a financial holding license in China. Once the restructuring is completed and Ant secures a license for its financial holding company, it can prepare for an IPO in Hong Kong. Read more
PacWest, Banc of California merge to get smaller, others may follow - The deal will combine two Golden State lenders that focus on business banking across over 70 branches, which the banks say would create one of the largest banks by deposits based in California. Yet the merger would also ultimately result in one smaller bank, as measured by total assets, than the two lenders together represent on paper at second-quarter levels. Read more
Shopify expands into credit cards as it pushes further into the fintech space - The new product marks Shopify’s first pay-in-full business credit card. It is powered by Stripe and issued by Celtic bank. Read more
Banks’ cautious approach to generative AI is more internal than customer-facing - Citi CEO Jane Fraser recently expressed the importance of banks embracing generative AI, months after the global U.S. bank reportedly restricted employees’ use of the AI-powered chatbot. Read more
Apps like Robinhood make trading fun, but SEC fears it is costing investors - Federal regulators want to impose new guardrails on the way retail investment firms such as Robinhood Markets use advanced analytics to encourage customers to trade, the latest in a series of policy efforts prompted by the 2021 meme-stock craze. Read more
American Express offers B2B APIs to fintech companies for enhanced payment solutions - The APIs will let fintech companies and software providers embed American Express virtual cards into their own spend management, procurement and other business software solutions. The company also plans to add more B2B payment and data capabilities, including integration with mobile wallets, in the future. Read more
Buyers are getting home loans from an unlikely source: the seller of their house - Real-estate professionals are reporting that they are increasingly seeing an interest in seller financing for transactions involving residential properties due to the rise in interest rates. Read more
Bombs, car chases and ‘free money’: Dutch gangs blow up German cash machines - Germany has become Europe’s ground zero for ATM attackers, who have exploited a fragmented banking system and a decentralized police force — and Germans’ marked preference for cash over cards or digital payments. Read more
Sam Altman’s Worldcoin eyeball-scanning crypto project launches - The startup, which has raised about $250m altogether up to this point, said it’s rolling out its identity technology as well as the token internationally. Individuals can download World App, the startup’s protocol-compatible wallet software, and visit an Orb, the startup’s helmet-shaped eyeball-scanning verification device, to receive their World ID. Read more
Card spending by Gen Z and Millennials surges 21% - Earnings materials from American Express show that consumer billed business — which is a measure of member spending, including cash advances — was up 10% to $155b. The company noted in its earnings release that card spending, overall, has hit another all-time high, and that travel and entertainment related spending was up 14%. Read more
It’s Taylor Swift’s economy, and we’re all living in it - It’s simple Taylornomics: When Taylor Swift comes to town, Swifties go on a spending spree. Her fans have been filling hotels, packing restaurants and crowding bars during Swift’s 20-city Eras Tour in the U.S. Cities say the tour has helped them recover from the economic toll of the pandemic by bringing back tourists and their wallets. Read more
Select Financings
Auxilo Finserve - Mumbai based education financing startup raised $57m in growth funding led by Tata Capital. Read more
Bloom Money - London based rotating savings club startup raised £1m in pre-Seed funding led by Zinal Growth. Read more
Bunker - Singapore based financial data analytics startup raised $5m in Seed funding led by Alpha JWC. Read more
Bunq - Amsterdam based neobank for remote workers and digital nomads raised €100m in growth funding led by Pollen Street Capital. Read more
Colleen AI - Florida based AI platform for multifamily real estate payments raised $3.5m in Seed funding led by Wilshire Lane Capital. Read more
Croissant - Nashville based buyback guarantee startup raised $24m in Seed funding led by Portage Ventures. Read more
Effectiv - San Francisco based fraud risk management startup raised $4.5m in Seed funding led by Better Tomorrow Ventures. Read more
Eflow Global - London based regulatory compliance startup for financial institutions raised £7m in Series A funding led by Finch Capital. Read more
Ennabl - Connecticut based data analytics platform for insurance brokers raised $8m in Series A funding led by Brewer Lane Ventures. Read more
Exponential Exchange - Washington D.C. based vehicle derivatives startup raised $7.4m in Seed funding led by MaC Venture Capital. Read more
Finicast - San Mateo based business planning and modeling platform raised $12.8m in Seed funding led by Celesta Capital. Read more
Foxquilt - Toronto based small business insurtech startup raised $12m in new funding led by ICM. Read more
Giraffe - New York based impact investing platform for employees raised $10.5m in Seed funding led by Group 11. Read more
Jeeves - Miami based expense management platform raised $25m in new funding led by an undisclosed sovereign wealth fund. Read more
Licify - Bogota based construction procurement and payments startup raised $3.4m in Seed funding led by Brick & Mortar Ventures. Read more
Lumi - Sydney based small business lending startup raised $15m in new funding led by Harel Insurance. Read more
MindBridge Analytics - Ottawa based financial risk discovery platform raised $60m in growth funding led by PSG Equity. Read more
Sk3w Technologies - New Jersey based financial exchange access and auditing startup raised $7m in Series A funding led by Tower Research Ventures. Read more
SquadTrip - Tulsa based group trip payment startup raised $1.5m in Seed funding led by Atento Capital. Read more
Trustmi - Tel Aviv based payments fraud prevention startup raised $17m in Series A funding led by Cyberstarts. Read more
Whop - New York based digital goods marketplace startup raised $17m in Series A funding led by Insight Partners. Read more
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