Magic Eraser


Aug 17, 2019



Aug 17, 2019



Consumers are drowning in debt. American household debt hit a record $13.2 trillion in 2018 – more than $40k per person on average across 327m people. Many consumers wish the debt would simply disappear.

Though exceedingly rare, this is actually possible! Some of our friends to the North in Canada received an unexpected surprise earlier this month when their credit card debt was erased. Chase decided to exit the country, and forgave all debts owed from the users of its two remaining products (Amazon and Marriott rewards credit cards).

Customers were over the moon with the development. One customer noted that he “couldn’t believe it” after learning he had been freed from $6k in debt. "It's kind of like I'm being rewarded for my irresponsibility," said a university student now forgiven from a $1,300 bill.

Though Chase didn’t disclose the number of customers or how much debt was forgiven, the company calculated that collecting wouldn’t make financial sense. To collect the money, Chase would have to pay accountants, taxes, and collection agencies - costs that were determined to be larger than the remaining balances.

With over $2.7tn in assets and over $150b in credit card loans worldwide, the debt outstanding from these two products simply didn’t move the needle for Chase.

Though no one should ever bank on their debt being magically erased, we congratulate those whose debt went up in flames!

Portfolio News

Artivest announces leadership change - Portfolio company Artivest announced this week that Martin Beaulieu is becoming the company's Executive Chairman and CEO, and that James Waldinger, founder of Artivest, will become President of the company. Wishing Martin, James, and the rest of the Artivest team continued success! Read more

Bitcoin's risk-adjusted returns can be considered superior to S&P 500 and gold - According to data from portfolio company TradeBlock, when analyzing the returns of Bitcoin, the S&P 500, and gold using the Sortino Ratio (penalizes only downside volatility when calculating risk-adjusted returns), Bitcoin's returns were highest between August 13, 2018 and August 9, 2019. Read more

Commercial cards: growth on growth, and opportunities for smaller banks - Commercial card use in the US is rising dramatically, with spend volumes of $504.7b in 2018 projected to grow to $847b by 2022 driven by a commercial shift away from paper-based payments. Portfolio company Extend - a virtual commercial credit card issuing platform - has a massive opportunity in front of it. Read more

Magic Eraser

'It's crazy': Chase Bank forgiving all debt owed by its Canadian credit card customers - JP Morgan Chase is forgiving all outstanding debt owed by users of its two Canadian credit cards to complete its exit from the Canadian credit card market. Affected customers can't believe their luck! Read more

Industry News

Regulatory hurdles imposed in China continue to hit P2P platforms - More than 80% of China's 6,200 P2P lenders (since 2015) have either been shut down or troubled, according to Shanghai-based researcher Yingcan Group. Zendai, a private Shanghai-based investment company, is the latest to pull out of P2P lending in China, shutting down two P2P lending units worth $1.4b. Read more

"Buy now, pay later" on the rise - Fintech firms enabling "buy now, pay later" services are on the rise, highlighted by Klarna's recent $5.5b valuation. Clever marketing and the benefits to both the store and payment financing provider are part of the surge in popularity, but these services also carry dangers such as consumers spending more than they can afford. Read more

ESG investing sparks race in tech and hiring at asset managers - This year asset managers have bought stakes in ESG businesses, created internal ratings tools and hired specialists to gain a foothold in environmental, social and governance investing as their clients demand that their money is used to do good as well as to generate returns. Read more

Federal Reserve announces plan for real-time payments system - The Fed announced "FedNow," a real-time retail payment infrastructure, that will be available in 2023 or 2024. 90% of the comments that the Fed received in response to a request for comments last November called for the central bank to operate a real-time payment service.Read more

Latin America the focus of Q2 2019 fintech VC investing - According to a CB Insights research report, Latin America became one of the fastest-growing regions for fintech VC investing. In Q2 2019, Latin America fintech VC investing surpassed both China and India, and is already off to a good start in Q3 following the $400m round from Brazil-based NuBank. Read more

U.S. stock market’s consolidated quote system experiences glitch - On Monday the system that feeds real-time data feeds to data providers and is used to calculate index values experienced a processing issue that resulted in some delayed quotes. An example impact of this glitch is that some of Vanguard’s funds appeared to lose as much as half their value on Monday. Read more

Banks near zero hour on $124 trillion of flows - Why do banks charge so much for international transfers? As Bloomberg points out, it’s not like they need to move a sackful of dollars anywhere. It’s just data hopping from one computer to another. Why should it cost $25? Read more

Google announces $1 billion Hudson Square Campus in New York City - Google will grow its existing 7,000-person workforce in New York City to more than 14,000 citing that "New York City continues to be a great source of diverse, world-class talent.” Read more

Silicon Valley is eating the banks’ lunch - Back in 2014, JPMorgan’s Jamie Dimon warned that Silicon Valley was coming to eat the banks’ lunch. In this FT article is becomes apparent that the technology companies are now starting to "chow down.” Read more

China's digital currency is "ready" - China's central bank announced at the China Finance 40 Group meeting this week that the country will soon release its central bank digital currency. Read more

Tumbling renminbi helps push Chinese into Bitcoin, say traders - A recent run-up in the price of Bitcoin has been attributed to many factors: aggressive monetary easing by central banks, plans by Facebook to develop its own digital tokens, and market manipulation via Tether, another crypto asset. But another force may be giving Bitcoin a lift: demand from Chinese investors. Read more

Finance Forward created to support entrepreneurs - VC firm Village Capital, MetLife Foundation, and PayPal, among others, have collaborated to launch "Finance Forward," a joint venture that will support more than 100 early-stage entrepreneurs building tech-enabled solutions around financial health in the United States, Latin America, Europe, the Middle East, and India. Read more

Coinbase hack attempt in May highlights rise in attacker sophistication - Coinbase released a detailed report of an attempted phishing attack that occurred in May 2019, and the sophistication of the attack indicates that the attackers were operating with a big budget and an incredible amount of social-engineering effort. Read more

Select Financings

Coinmine - Los Angeles based provider of crypto mining hardware and software raised $2.5m in Seed funding led by M13 Ventures. Read more

Delio - UK based provider of technology that helps global financial institutions manage private asset offerings raised £3.3m in funding led by Maven Capital Partners. Read more

Flatfair - London based provider of a platform for landlords to offer "deposit-free" renting to tenants raised $11m in Series A funding led by Index Ventures. Read more

Joust Labs - Austin, TX based financial services platform for freelancers and entrepreneurs raised $2.6m in Seed funding led by PTB Ventures. Read more

LendInvest - London based provider of an online marketplace for property finance raised £200m from National Australia Bank. Read more

QFPay - China based provider of mobile payment services raised $20m in funding led by Sequoia Capital China and Matrix Partners.Read more

Rupeek - India based provider of an online marketplace for gold loans raised $30m in funding led by Bertelsmann India Investments. Read more

Solve Advisors - New York City based provider of fixed income market data aggregation services raised an undisclosed amount of funding from NEXT Investors (venture capital arm of Credit Suisse). Read more

ZSuite Technologies – Arlington, MA based provider of software tools that help banks serve real estate owners and property managers raised $6m of outside funding. The funding comes alongside ZSuite Technologies’ spin-out of Leader Bank, a $1.5b community bank. Read more


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