#577
Disrupting the Status Quo
Published:
Feb 08, 2025
Author:
Sarah Parsons Wolter
Share:
Tasked with leading a newly minted government efficiency initiative, Elon Musk has assembled a team of young software engineers—most under 25—to rethink federal operations from the ground up. Their first major move is shutting down USAid, the agency responsible for distributing foreign assistance. The decision has ignited debate over whether “move fast and break things” applies to Washington.
At the same time, another bold financial experiment is unfolding. President Trump’s newly announced sovereign wealth fund—designed to bolster the U.S. economy—is also under debate. Critics argue that using public funds for investment in private-sector ventures risks favoritism and instability, while supporters see an opportunity to harness national wealth for strategic growth.
Meanwhile, the Federal Reserve appears to be changing course after months of aggressive interest rate hikes. With economic uncertainty looming, policymakers are signaling a possible pause, attempting to balance inflation control with the risk of slowing growth too much. Markets are watching closely, businesses are adjusting, and consumers are awaiting impact on inflation and cost of living.
Disruption is the theme of the moment—whether in government, finance, or monetary policy. As Washington experiments with a tech-driven overhaul, the Fed recalibrates its strategy, and a controversial sovereign wealth fund takes shape, one thing is certain: the status quo is no longer an option.
Portfolio News
Plaid and Algebrik launch CU-focused loan origination platform - The collaboration, announced this week, will integrate Plaid’s consumer-permissioned data with Algebrik, allowing for easier identity verification, financial data access and better decision-making for lenders and borrowers. Read more
Lender Toolkit unveils enhanced AI underwriter with Ocrolus integration for unmatched speed, accuracy, and scalability - Lender Toolkit announced this week a partnership with Ocrolus and the integration of Ocrolus' advanced document analysis technology into its product line. This powerful enhancement addresses a critical need in the mortgage underwriting process—the ability to efficiently handle unstructured data from electronic, scanned or physical documents. Read more
Disrupting the Status Quo
Trump signs executive action to create sovereign wealth fund - Scott Bessent, who joined Trump at the Oval Office, said the fund would be created in the next 12 months, calling it an issue “of great strategic importance.” Trump suggested the fund could be used to facilitate the sale of TikTok, which is currently operating in the US thanks to an extension he signed prolonging the deadline for a forced sale or shutdown. Read more
The U.S. sovereign wealth fund is paradise - In a satirical blog post on Wall Street Oasis on a day in the life of a “US sovereign wealth fund employee”, the author writes: By 8:30am, I’m at my desk in the Eisenhower Executive Office Building, surrounded by former Goldman guys who rebranded as “patriotic investors.” Our mandate? Deploy $1t of taxpayer money into “high-priority national interests.” In reality, we’re LARPing as PE bros while writing checks to companies with more lobbyists than revenue. Read more
Elon Musk barred from accessing US Treasury payments data - Elon Musk’s crusade to slash US government spending suffered setbacks on Thursday after a federal judge barred the Treasury department from handing data from its payments system to outsiders and one of the billionaire’s staffers was forced to resign over racist social media posts. Read more
Meet Elon Musk’s ‘baby-faced assassins’ leading Doge takeover - In the two weeks since Trump took office Musk has effectively created an alternative power structure inside the government, gaining access to its finance system as well as the sensitive private data of millions of citizens. The oldest in the group dubbed “the baby-faced assassins” — first identified by Wired magazine over the weekend — is only 25. Read more
Industry News
Stablecoin legislation pushed as Trump sets crypto-friendly agenda - The bill seeks to create a predictable regulatory environment for stablecoins. Proponents say that federal regulation would lend legitimacy to the asset class that could lead to broader adoption. Read more
Venture Capital upping its bets on Latin American lending startups and IPOs - The market is ripe for lending innovation as one in four Latin American adults still do not have a bank account, while lower US interest rates could also open the door to more initial public offerings as soon as this year after a dry spell in the region. Read more
Insurers clamor for securitized debt as annuity sales surge - Insurance companies are snapping up asset-backed bonds to fund future payouts on their annuity products which are seeing record demand — a trend that is expected to continue, according to Morgan Stanley. Read more
Parents ditch 529 plans and embrace bitcoin for college savings - Most parents typically worry about funding 529 college savings plans, brokerage accounts or high-yield savings vehicles for their kids. Now, a subset are eschewing the old ways, pushing instead to pile up enough Bitcoin to help their children in the years ahead. Some say it’s because stock gains aren’t good enough. Others view it as reasonable diversification. Read more
Stripe closes $1.1b Bridge deal, prepares for aggressive stablecoin push - The deal marks the largest acquisition to date for the payments company and marks a big bet on stablecoins. Companies across the financial services landscape, from legacy banks to startup payment providers, are adopting stablecoins or exploring launching their own because they make it easier and cheaper to switch between currencies and to move money digitally. Read more
Apollo plans to build the first marketplace for private credit - The alternative asset manager is in discussions to partner with banks, exchanges and fintech firms to deliver real-time information and intraday prices for private credit deals. Such a marketplace would allow Apollo to trade and syndicate the debt it originates on a bigger scale and be the first of its kind in modern-day private markets, where assets are typically held with the buyers and prices are rarely disclosed publicly. Read more
Worldpay snaps up AI-powered fraud prevention platform Ravelin - Payments software firm Worldpay has agreed a deal to acquire Ravelin , an AI-powered fraud prevention platform headquartered in the UK. Founded in 2015, Ravelin’s AI platform supports solutions that currently assist over 300 e-commerce merchants in predicting and preventing different types of financial crime. Read more
Stablecoins are finding product-market fit in emerging markets - The rise of stablecoins — now a $205b market — is driven by real-world utility, not speculation, particularly in emerging markets where the most compelling use cases unfold. Cross-border payments in these regions are typically slow and expensive, involving multiple intermediaries. Read more
RTP network hits 1b payments 18 months after 500m mark - The network said that on the same day it crossed the 1b payment milestone — Jan. 31 — it also reached new single-day records for payments volume (1,592,419 transactions) and value ($1.44b). The RTP milestone comes as businesses are turning to new solutions to get paid faster and avoid the headaches that come with late payments. Read more
Crypto.com, Kalshi’s Super Bowl wagers probed by US regulator - The agency is allowed by statute to request additional information from companies that “self-certify” their financial products, including demonstrating that they aren’t readily susceptible to manipulation and meet other regulatory requirements. It can evaluate the responses and decide whether to take any enforcement actions or begin drafting a new rule. Read more
Select Financings
Cashfree - India based payments company raised $53m in Series C led by Krafton. Read more
Comstruct - Munich based construction procurement platform raised €12.5m in new funding led by GV and 20VC. Read more
INXY Payments - Poland based crypto processing platform raised $3m in new funding led by Flashpoint VC. Read more
Khazna - Egypt based financial super app raised $16m in new funding led by Quona. Read more
Lynx - Boston based fintech for health care payments and administration raised $27m in Series A funding led by Flare Capital Partners. Read more
Myne - Dubai based wealth and asset tracking platform raised $2m in pre-Seed funding led by Scene Holding. Read more
Neofin - Brazil based accounts payable SaaS company raised $7m in new funding led by Quona. Read more
Qeen.ai - Dubai based developer of AI agents for ecommerce raised $10m in new funding led by Prosus Ventures. Read more
Reservoir - Decentralized crypto infrastructure startup raised $14m in Series A funding led by Union Square Ventures. Read more
Rho Labs - Decentralized rates exchange raised $4m in Seed funding led by CoinFund. Read more
TaxGPT - San Francesco based tax co-pilot raises $4.6m in Seed funding. Read more
ZeroRisk - Ireland based compliance and cyber risk management startup raised $4m in new funding led by Elkstone. Read more
FinTech Collective Newsletter
Curated News with Context
Delivered every Monday, the weekly newsletter, produced by our team, provides a tightly edited rundown of global fintech news, along with a bit of our original analysis.