#364
For The Culture
Published:
Dec 05, 2020
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If you were a (fintech) founder, who would be your dream celebrity investor? This week, a consumer fintech startup for teens counts Will Smith, Charli D’Amelio, Justin Timberlake, The Chainsmokers, Eli Manning, and Andre Iguodala as shareholders on their cap table.
After a quick poll, ours would either be E.T. - as he’s technically very strong and can make stuff fly, or for a hardware product, B.A. Baracus - as "with a pair of pliers and a little time, he can fix anything but dinner." Being called a fool at a board meeting, however, might wear a little thin after a while.
Celebrities can play a meaningful role to startups, consumer facing ones in particular. In the battle for digital eyeballs and distracted attention spans, celebrities have massive and engaged followers on social media that allow for cost-efficient distribution. While many simply get paid to endorse brands, others are choosing to invest in or build their own brands. Ryan Reynolds is already on his third venture in as many years: Aviator Gin (now exited), MVNO Mint Mobile, and proud owner of 5th tier Welsh football club, Wrexham.
Fintech is also independently finding its way into pop culture. Square’s CashApp launched their own apparel brand this week, a couple of months after CEO Jack Dorsey said, “CashApp is culture” on the Q2 2020 earnings call. Fintech companies sponsor sports teams and stadiums across the US, from SoFi stadium in Los Angeles to the MoneyLion Nascar team.
While some may point to our industry as bits and bots, one thing is becoming certain: fintech is culture.
Portfolio News
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For The Culture
Step raises $50m in Series B funding following massive consumer demand from its recent launch - Step, the new modern-day financial services company built for teens and families, today announced a $50m Series B round of funding led by Coatue, with participation from several celebrities. Additionally, with Step partner Charli D’Amelio’s recent investment, the digital megastar is hoping to play a more active role in helping to close the financial literacy gap by working with Step to share important money management lessons with her dedicated following of more than 100m people. Read more
Square's Cash App unveils apparel line ‘Cash by Cash App’ - Cash by Cash App, designed in-house by the company’s Brand Studio team and all produced in Los Angeles, is a youthful, unisex apparel collection comprised of T-shirts, sweatshirts and sweatpants, hoodies, outerwear and accessories in vibrant colors and psychedelic patterns like multicolor camouflage and parody motifs related to money. Read more
Industry News
Stripe to offer banking services in deal with Goldman Sachs, Citigroup - Stripe, which processes payments for millions of online businesses and e-commerce platforms, will soon give its customers the option of offering insured, interest-bearing bank accounts, debit cards and other cash-management services. These products aren’t meant for consumers. Rather, they are designed for the merchants and vendors that do business with Stripe’s customers. Read more
S&P Dow Jones Indices to launch cryptocurrency indexes in 2021 - The S&P DJI-branded products will use data from New York-based virtual currency company Lukka on more than 550 of the top traded coins, the companies said. S&P’s clients will be able to work with the index provider to create customized indices and other benchmarking tools on cryptocurrencies. Read more
Dyal Capital in talks to combine with Owl Rock Capital - Discussions also involve Altimar Acquisition, a SPAC, and would value combined entity at around $13b. Should it come together, it would be the latest in a recent series of asset-management deals and combine one of the biggest owners of private-equity firm stakes with an upstart credit investor that has posted rapid growth financing deals for many of the same private-equity firms. Read more
Visa partners with ethereum digital-dollar startup that raised $271m - Visa announced it is connecting its global payments network of 60m merchants to the U.S. Dollar Coin (USDC) developed by Circle Internet Financial on the ethereum blockchain. The digital currency is now valued at $2.9b. While Visa itself won’t custody the digital currency, the partnership will see Circle working with Visa to help select Visa credit card issuers start integrating the USDC software into their platforms and send and receive USDC payments. Read more
Nasdaq seeks board-diversity rule that most listed firms don’t meet - The exchange operator filed a proposal with the SEC on Tuesday that would require listed companies to have at least one woman on their boards, in addition to a director who is a racial minority or one who self-identifies as lesbian, gay, bisexual, transgender or queer. Companies that don’t meet the standard would be required to justify their decision to remain listed on Nasdaq. In a review carried out over the past six months, Nasdaq found that more than three-quarters of its listed companies would have fallen short of the proposed requirements. Read more
Stripe Capital extends business lending to online platforms - Stripe Capital first got off the ground in September 2019, offering customers and businesses financing options through its online platform. Stripe recently went live with the next phase in its business lending campaign, which enables online platforms to offer financing to their business customers through Stripe Capital. With traditional banks scaling back their lending to small businesses, Stripe is looking to step into that void, with rapid lending decisions based on data culled from a customer’s past performance on the platform. Read more
JPMorgan to buy fintech company 55ip to help investor clients cut taxes - The move positions JPMorgan to broaden offerings to financial advisers, a key source of growth in the asset-management industry. With investment returns in flux due to rock-bottom interest rates and volatility, investors have been focusing more on how their portfolios perform after accounting for taxes. Read more
Boom in fintech bond sale platforms risks fragmenting market - The concerns follow a flurry of new technologies from New York to Hong Kong trying to drag the process of placing bonds into the 21st century. There are now at least 35 different systems for new bond deals across the globe, up from 22 in 2018, according to data from the International Capital Market Association. Read more
Apple Pay targeted in Dutch antitrust probe into payment apps - Apple phones face scrutiny from Dutch antitrust regulators who are probing whether users get a free choice of financial apps with contactless payments. The Netherlands Authority for Consumers and Markets said on Friday it started an investigation into payment apps’ access to near-field communication, which allows people to wave their phones at payment terminals to make purchases. Read more
BlackRock should split off its Aladdin tech platform, says think-tank - Restrictions should also be imposed on State Street and Vanguard, said the American Economic Liberties Project. Between them, the three investment companies, which are the world’s largest, control assets of almost $17t. Read more
Surge in pay-later deals stokes fears of debt crisis - Buy-now-pay-later deals have exploded in popularity during the pandemic, prompting fears of a looming debt crisis among the young and unemployed. Some 9.5m people now pay using Klarna, a Swedish lender that has signed up 2.5m customers since the the start of March. Read more
A new Visa credit card offers bitcoin rewards instead of miles or cash - Visa is partnering with cryptocurrency startup BlockFi to offer a credit card that rewards purchases with Bitcoin. Users of the Bitcoin Rewards Credit Card will receive 1.5% of their purchases back in the world’s most-valuable digital asset, and a lump sum $250 in the crypto-asset if they spend more than $3,000 in the first three months. Read more
JP Morgan and Lloyds considering acquisition of UK challenger Starling Bank - Starling Bank, having grown its user base to 1.9m UK customers, has sparked acquisition interest amongst major high street banks. Whilst JP Morgan has its eyes on the start-up’s customer base, Lloyds wants its technology. But Starling’s CEO and co-founder, Anne Boden, has made it clear she does not intend to sell up. Read more
S&P Global agrees to buy IHS Markit for about $44b - The deal would combine one of the oldest names in financial markets with a relative newcomer. S&P traces its roots to an 1860 compendium of information for railroad investors and is best known for its bond ratings and its iconic stock-market indexes, which serve as shorthand for the health of global markets. IHS Markit, formed in 2016 by the merger of two smaller players, tracks millions of data points in financial markets. Read more
Facebook’s Libra currency to launch next year in limited format - First launched in June 2019, the scaling down of Libra’s vision comes as it has received a skeptical reception from global regulators, who have warned that it could threaten monetary stability and become a hotbed for money laundering. The association would now initially just launch a single coin backed one-for-one by the dollar - the other currencies and the composite would be rolled out at a later point. Read more
Plaid teams with Jack Henry to bring Plaid Exchange to banks - Plaid Exchange is the industry’s first open finance platform, the company said. It gives banks, wealth managers, and FinTechs a way to offer stable solutions to connect accounts to apps and services. Since launching in May, Plaid said they have discovered that many FIs need technical support in order to integrate the platform. The tie-up gives Jack Henry customers access to the Plaid network and provides extra security to the 350-plus financial institutions using Jack Henry’s Banno digital platform. Read more
Bank applications get a coronavirus boost - The costs of opening a new bank haven’t changed much, and the Federal Reserve has cut interest rates to near-zero yet again. But the coronavirus crisis and the market gyrations it caused have shown the benefits of a banking license—and the low-cost deposits that come with it. Read more
Lessons from China’s decision to halt Ant Group’s giant IPO - China’s biggest financial technology group had been set to raise $37b in the world’s largest IPO before Beijing’s intervention this month. Now China watchers are looking at what the far-reaching ripple effects will be of the unanticipated policy move — and its future victims and beneficiaries. Read more
Select Financings
Amount - Chicago based API framework for retail banks raised $81m in Series C funding led by Goldman Sachs. Read more
Cashfree - India based business payments platform raised $35.3m in Series B funding led by Apis Partners. Read more
Chainalysis - New York based provider of blockchain compliance services raised $100m in Series C funding led by Addition. Read more
ConnexPay - Atlanta based payment technology company raised $61m in extended Series A funding led by F-Prime Capital. Read more
CRED - India based credit card startup raised $80m in Series C funding led by DST Global. Read more
Credit Key - Los Angeles based B2B payments platform for e-commerce merchants raised $33.8m in funding from investors including Greycroft, Bonfire Ventures and Loeb.nyc. Read more
Current - New York based challenger bank raised $131m in Series C funding led by Tiger Global Management. Read more
Flyreel - Denver based artificial intelligence startup focused on claims technology for residential and commercial property insurers raised $10m in Series A funding led by IA Capital Group. Read more
Hippo - Palo Alto based home insurance technology company raised $350m in new funding from Mitsui Sumitomo Insurance. Read more
HMBradley - Santa Monica based digital banking platform developing programs to reward savers raised $18.25m in Series A funding led by Acrew Capital. Read more
Monzo - UK based challenger bank raised £60m in new funding from Novator, Kaiser, TED Global and Goodwater. Read more
Moov Financial - Iowa based open source embedded banking platform raised $27m in Series A funding led by a16z. Read more
Pier - Brazil based digital insurance company raised $14.5m in Series A funding led by Monashees. Read more
Pockit - London based digital banking app focused on underserved customers raised $20m in Series B funding from investors including Concentric, Jatania Family, Harold Mechleynck, Perscitus and Sir Alex Ferguson. Read more
Primer - UK based payments startup helping merchants consolidate the payments stack raised £14m in Series A funding led by Accel. Read more
Productfy - San Jose based developer of a platform that enables non-bank companies to build fintech applications raised $2.35m Seed funding led by Point72 Ventures. Read more
Satispay - Milan based mobile payment platform raised €93m in Series C funding led by LGT Lightstone, TIM Ventures, Tencent Holdings and Square. Read more
Waterdrop - China based insurance tech startup raised $150m in new funding from Tencent. Read more
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