Glory Days


Oct 24, 2020



Oct 24, 2020



It is no secret that automation is affecting the service economy. This is accelerated during economic downturns, presenting an existential threat to many jobs. In finance, for example, machines have become increasingly competent at analyzing financial statements and monitoring earnings calls, making the role of analysts look easier (and perhaps more dispensable).

Researchers at Georgia State and Columbia University, however, reminded us this week of the power of human ingenuity. Corporate leaders have become increasingly crafty - adapting the wording of their statements in anticipation of what algorithms interpret as trading signals. Overall, evidence suggests that positive messaging yields better machine-produced analyst reports.

In the past century, tailoring communication for human audiences was a vital Wall Street skill. It's thus hardly surprising that - as the prevalence of AI and ML surges - alternative data providers arose, allegedly capable of dissecting florid language to provide an investing edge.

It is ultimately ironic that, in a world heading in an increasingly data-driven direction, eloquence appears to be rewarded. But, as the legendary and prolific rocker Bruce Springsteen reminded us this week while dropping his 20th album, old tricks still work.

Portfolio News

Ocrolus introduces cross source validation to automate corroboration of borrower information accuracy - Ocrolus XSV can be used to match names, dates, numeric values or calculations with classification rules that can be exact matches or selectable confidence levels. Prior to XSV, this information is usually verified by loan originators in a “stare and compare” document to screen review supported by manual calculations. Read more

Latam fintech investment turns virtual – mostly - Portfolio company Oyster's CEO - Vilash Poovala - shares thoughts on fundraising in Latin America during the Covid pandemic. Read more

Glory Days

Sweet-talking CEOs are starting to outsmart the robot analysts - Company executives have started to adapt their statements and even their delivery to cater to the algorithms parsing text and speech for trading signals, researchers at Georgia State University and Columbia University have found. Managers are emphasizing positivity and avoiding words or phrases known to be perceived by machines as negative. Read more

How to prepare for earnings calls using machine learning techniques - Nasdaq has released a white paper with best practices of how to tailor messaging (what is said and how it is said) and utilize data in the digital age. Read more

Industry News

JPMorgan Chase takes on Square and PayPal with smartphone card reader, faster deposits for merchants - Chase's new QuickAccept service lets businesses take card payments within minutes, either through a mobile app or a contactless card reader, and users will see sales hit their Chase accounts on the same day. Read more

Fintech startups broke apart financial services - now the sector is rebundling - As fintech companies mature, many no longer aspire to be the best at one thing. That could mean not only new revenue sources for fintech companies, but also additional venture capital to startups and even a surge in M&A activity. Read more

PayPal and Venmo will offer and accept cryptocurrency for all online payments - PayPal announced it would begin supporting cryptocurrencies for the first time, allowing any PayPal account holder to store, buy, and sell popular virtual currencies starting later this year. The announcement makes PayPal arguably the most significant company in the financial tech sector to adopt support for virtual currencies. Read more

Does a digital euro challenge the dollar’s global dominance? - The thing we found most interesting about the paper was that, if a digital euro indeed does happen, the ECB seems to have something in mind that would open up the possibility of participants outside the single currency area having access to digital wallets. Read more

Google Cloud launches Lending DocAI, its first dedicated mortgage industry tool - The tool, which is now in preview, is meant to help mortgage companies speed up the process of evaluating a borrower’s income and asset documents, using specialized machine learning models to automate routine document reviews. Read more

Brazil’s central bank just revolutionized instant payments - Next month, the Central Bank of Brazil will debut a new instant payments tool. Called PIX, it promises hassle-free transactions within seconds for anyone with a mobile phone and a bank account. And it comes free of charge. PIX has received more than 39m requests by prospective clients, both corporate and individual, eager to lock in access “keys” to the service. Read more

Billtrust to go public via SPAC in $1.3b deal - Billtrust, a B2B provider of cloud-based software and integrated payment processing solutions, will change its name to BTRS Holdings once the transaction closes. With a cash balance of around $200m and no debt, going public will allow it to grow organically and inorganically, the company said. Read more

PayPal in talks to buy crypto firms including BitGo - Palo Alto based BitGo was founded in 2013 by Chief Executive Officer Mike Belshe. It offers digital wallets that require multiple signatures for transactions, as well as offline vaults for storing Bitcoin and rival currencies. Read more

WhatsApp to offer in-app purchases, cloud hosting services - Facebook said its WhatsApp messaging app would start to offer in-app purchases and hosting services, as it moves to boost revenue from the app while knitting together e-commerce infrastructure across the company. Read more

Why central banks want to create their own digital currencies like bitcoin - A guide from the Wall Street Journal on what digital currencies issued by central banks could mean for users, banks and the economy. Read more

Amazon launches a program to pay consumers for their data on non-Amazon purchases - Amazon has launched a new program that directly pays consumers for information about what they’re purchasing outside of Amazon.com and for responding to short surveys. Read more

Goldman-backed Brazilian fintech Iugu goes on hiring spree to face big banks - Iugu's platform helps smaller companies automate billing, saving time with back-office tasks. It recently got a central bank license allowing it to create an account for its clients that the CEO said “is something we can use to replace their banks altogether.” Read more

Select Financings

Kettle - San Francisco based reinsurance startup focused on climate change risk raised $4.7m in Seed funding led by True Ventures. Read more

Klar - Mexico City based online challenger bank raised $15m in Series A funding led by Prosus Ventures. Read more

Lili - New York based banking app for freelancers raised $15m in Series A funding led by Group 11. Read more

Newfront Insurance - San Francisco based business and personal insurance brokerage raised $28m in Series C funding led by Founders Fund and Meritech Capital. Read more

Polymarket - New York based blockchain based information markets platform for debated topics like the election raised $4m in new funding led by Polychain Capital. Read more

Possible - Seattle based fintech company focused on small personal loans raised $11m in Series B funding led by Union Square Ventures. Read more

Pulley - San Francisco based platform for startup founders and employees to track their equity raised $10m in Series A funding led by Stripe. Read more

Silent Eight - Singapore based company seeking to prevent money laundering and terrorism financing raised $7.5m in new funding led by OTB Ventures. Read more

Silverflow - Netherlands based payment processing startup raised €2.6m in Seed funding led by Crane Venture Partners and Inkef Capital. Read more

Unit21 - San Francisco based creator of an API-based platform that helps companies identify and investigate money laundering and fraud raised $13m in Series A funding led by A.Capital Ventures. Read more

Wayflyer - New York and London based eCommerce revenue-based financing and marketing analytics platform raised $10.2m in Seed funding led by QED Investors. Read more

Welcome Homes - New York based online home building, customization and purchasing platform raised $5.35m in Seed funding led by Global Founders Capital. Read more

Zest AI - Los Angeles based provider of credit underwriting software raised $15m in new funding led by Insight Partners. Read more


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