Gilty As Charged


Oct 03, 2022


Cindy Grazer


Oct 03, 2022


Cindy Grazer


Gosh what a month! Between the passing of the Queen (God save the King), the British Pound sell-off (it’s called soccer now…), and the possibility for an emergency rate hike by the Bank Of England, the last thing the UK really needed this month was Grandma and Grandpa’s pension to be wiped out in a systemic financial meltdown. But that’s what the country came very close to this week, with the central bank being forced to step in as the buyer of last resort to help curb an LDI driven sell off that almost broke the pension market.

So what exactly is LDI and why does it matter? Put simply, Liability Driven Investing is an approach that focuses the investment policy and asset allocation decisions on matching the current and future liabilities of a pension plan, and as such represents 40% of the UK institutional asset management market and two-thirds of GDP i.e. it’s massive.

The rapid sell off in long dated Gilts meant that counterparties made margin calls on pension funds who then had to liquidate more Gilts, further spiraling price action into free fall. The BOE, which was supposed to start selling bonds to unwind Quantitative Easing as of next week, was forced to reverse course and temporarily start buying bonds to curb a Lehman Brothers style market contagion.

So…14yrs and 16 days since Lehman collapsed, and 10 years since FinTech Collective started investing in how money flows through the world, we’ve just had another good reminder that there is still a lot for entrepreneurs (both tradfi and defi ) to fix in the system. Let's hope the image of King Charles III appearing on Sterling gives it more than a cursory redecoration!

Gilty As Charged

Centrifuge turns real world assets into loans - FinTech Collective portfolio company Centrifuge CEO, Lucas Vogelsang, is featured in Axios and talks about how DeFi can bring value to the real world through financing illiquid assets on-chain. To date, Centrifuge has helped small businesses gain access to $160m of total credit. Read more

The Pacific Financial Group partners with CapIntel to empower the advisor-client relationship - This partnership further enhances TPFG's technology stack and provides the firm with a fully customized performance reporting tool for its suite of model strategies. "Connecting with CapIntel is another step in our continuing commitment to digital transformation," says TPFG President Matt Hamilton. Read more

The venture capital group Antler sets up shop in France - Antler announced this week the launch of a new €30m fund dedicated to start-ups in the tech sector in France. The company, founded in 2017, hopes to make 25 investments by the end of 2023, with the aim of increasing that number to 90 investments over the next four years. Three times a year, Antler will welcome a group of 80 entrepreneurs in Paris for 4 months. Read more

Aron Levin, CMO and co-founder of payments company Willa, wants to make creators’ finances easier - Great interview with Aron who lays out the challenges of getting paid in the freelance economy and the Financial Operating System they are building to support them. Read more

Industry News

The reason the BoE is buying long gilts: an LDI blow-up - We all know the story about why short-end rates have soared in the UK. But what about the long-end? Well, basically pension plans appear to have been caught in doom-loop of margin calls on interest rate derivatives that forced them into dumping longer-maturity UK gilts, and spurred the Bank of England into intervening this week. Read more

BlackRock threatened to halt trading at height of UK market tumult - In a memo sent on Wednesday morning, BlackRock told clients using its liability-driven investing strategies that it would freeze “funds more at risk of assets being exhausted” and move the assets to cash. One professional trustee said the actions left pension schemes potentially unable to take steps to protect their members. Read more

Europe faces ‘severe risks’ to financial system, regulators warn - The European Systemic Risk Board, which is responsible for monitoring and preventing dangers to the region’s financial system, issued the alert after meeting last week and deciding the energy crisis triggered by the war in Ukraine had put the financial system in a precarious position. This is the first “general warning” about risk the ESRB has issued since its creation in 2010 on the eve of the eurozone sovereign debt crisis. Read more

The Problems Facing the Gilt Market Aren't Unique to the UK - The turmoil draws attention to the fragility of government bonds around the world when they are not, one way or another, being manipulated by governments and central banks. Read more

Select Financings

Wall Street hit with $2b of fines in WhatsApp probe - The SEC announced $1.1b in fines and the CFTC disclosed $710m in penalties in separate statements Tuesday. Those levies -- against firms including Bank of America, Citigroup and Goldman Sachs -- combined with JPMorgan’s $200m in fines from December, bring the total to $2.01b, making them the biggest penalties ever against US banks for record-keeping lapses. Read more

Chief Metaverse Officers are getting million-dollar paydays. So what do they do all day? - Disney, P&G, LVMH and other big names have invested in chief metaverse officers to plot a course through the next chapter of the internet. This feels very reminiscent of the "Global Heads of eCommerce" you would bump into at large banks and asset managers back in the late 90's. Read more

Square now supports Apple’s Tap to Pay on iPhones - The launch lowers the barrier to entry for merchants to adopt Square's platform, enabling them to accept contactless payments with no additional hardware necessary. Read more

EQT acquires Billtrust, a company automating the invoice-to-cash process, for $1.7b - Billtrust, headquartered in New Jersey, was founded in 2001 as a five-person company. It quickly grew to offer software-as-a-service (SaaS) products to manage billing for companies, including electronic billing and payments for consumer and business billing services. Read more

FTX US wins auction for Voyager Digital assets with $1.4b bid - The agreement, unveiled late on Monday, ends a two-week sale process after Voyager filed for bankruptcy protection in July in the wake of the collapse in crypto market prices and marks a further expansion of billionaire Sam Bankman-Fried’s influence on crypto markets. Read more

Cathie Wood’s ARK launches venture fund open to individual investors - The ARK Venture Fund is available to U.S. investors, including individuals, for a minimum initial investment of $500 on the online investment platform of financial-technology startup Titan. Venture-capital funds traditionally limit access to accredited investors such as wealthy individuals or institutions. Read more

Gemini to partner with financial advisor Betterment, act as custodian for crypto clients - Through the partnership Gemini will act as the crypto custodian for Betterment, enabling the financial advisory firm to open up crypto access to its customer base, which is a little over 730,000 users. Betterment customers will have access to crypto portfolios from October. Read more

Robinhood debuts new non-custodial crypto wallet with Polygon to 10K beta users - This means beta users will be able to purchase the Polygon MATIC token on Robinhood’s main exchange app and transfer it to their Robinhood Wallet. They will also be able to access dApps directly on the Polygon network, including DeFi apps such as Uniswap, Balancer and Kyberswap, and metaverse games such as Decentraland. Read more

Jack Dorsey’s TBD teams up with Circle to take US dollar stablecoin savings and remittances global - The collaboration between TBD and Circle aims to lay the foundation to access stablecoins globally, so developers can build upon the infrastructure and crypto wallet providers can plug into the open-source protocol. This includes building the sufficient links – on-ramps and off-ramps – between the traditional government-issued (fiat) currencies and blockchain-based digital currencies. Read more

King Charles: New coins featuring monarch's portrait unveiled - New coins featuring the portrait of King Charles have been revealed, with a 50p carrying his image entering general circulation within weeks. The coins follow centuries of tradition with the monarch now facing left - the opposite way to his predecessor. "CHARLES III • D • G • REX • F • D • 5 POUNDS • 2022", shortened from Latin, which translates to "King Charles III, by the Grace of God, Defender of the Faith". Read more

Market chaos forces UK lenders to pull mortgage products - Turmoil in British financial markets forced mortgage lenders to temporarily withdraw and reprice products for new customers on Monday, a real-world consequence of the market volatility thrown up by finance minister Kwasi Kwarteng's mini-budget last week. Brokers said the moves were likely just the start of a big shift in Britain's mortgage market. Read more

‘If you’re going to build something from scratch, this might be as good a time as in a decade’ - Fantastic interview with Bill Gurley of Benchmark who ponders on everything from the macro, to hybrid work, to navigating layoffs, to founders getting distracted that their net worth isn't what it was in 2021! He also stresses the importance of never changing his investment cycle due to economic swings. Read more

Bridge Money - Chicago based startup that helps users earn supplemental income raised $5.8m in Seed funding led by TMV. Read more

Climate Club - New York based provider of employer-focused sustainability software raised $6.5m in Seed funding led by XYZ VC and Vestigo Ventures. Read more

Coral - Boston based makers of Solana development framework Anchor raised $20m in new funding led by FTX Ventures and Jump Crypto. Read more

Deribit - Panama based bitcoin options exchange raised $40m in new funding led QCP Capital, Akuna Capital and 10T Holdings. Read more

Eclipse - San Francisco based customizable blockchain infrastructure provider led by ex-Citadel quant Neel Somani raised $15m in Seed funding led by Tribe Capital and Tabiya. Read more

Harpie - New York based crypto theft protection startup raised $4.5m in Seed funding led by Dragonfly Capital. Read more

Krypton - SF based decentralized exchange raised $7m in Seed funding round led by Framework Ventures. Read more

Minteo - Latin American based NFT marketplace raised $4.3m in Seed funding led by Fabric Ventures. Read more

Nova Credit - U.S. based startup focused on immigrant credit history raised $10m in new funding led by HSBC. Read more

Numida - Uganda based MSME lending firm raised $12.3m in Seed funding led by Serena Ventures. Read more

OneKey - Hong Kong based crypto hardware wallet maker raised $20m in Series A funding led by Dragonfly and Ribbit Capital. Read more

Perenna - U.K. based digital mortgage lender raised $30m in Series A funding led by IAG Silverstripe. Read more

Pigment - France based business planning and forecasting platform raised $65m in Series B+ funding led by IVP and Meritech Capital. Read more

Re - San Francisco based decentralized reinsurance protocol raised $14m in Seed funding led by Tribe Capital. Read more

Regate - Paris based SaaS finance automation platform raised €20m in Series A funding led by Valar Ventures. Read more

Shaype - Australia based embedded finance platform raised A$33 million in Series C funding led by Regal Funds Management. Read more

Solvo - London based mobile crypto investment app raised $3.5m in Seed funding led by Index Ventures. Read more

Songfinch - Chicago based musician monetization startup raised $17m in Series A funding led by Valor Siren Ventures. Read more

Strike - Chicago based mobile payments app that facilitates instant transactions via blockchain raised $80m in Series B funding led by Ten31. Read more

Tactic - New York based crypto accounting startup raised $11m in Series A funding led by FTX Ventures. Read more

Toqio - London based fintech white label SaaS raised €18.7m in Series A funding led by AlbionVC. Read more

Workist - Berlin based b2b transactions automation startup raised $8.7m in Series A funding led by Earlybird Venture Capital. Read more

Yonder - Dublin based health insurance and retirement benefits automation company raised $2.6m in Seed funding led by Northzone and Frontline Ventures. Read more


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