No Need For Clarence Beeks


Mar 13, 2023


Cindy Grazer


Mar 13, 2023


Cindy Grazer


2022 was a wildly divergent year for the hedge fund world - while some went out of business alongside the 37% decline in the S&P 500 value, others had a record breaking year. Ken Griffin’s Citadel is perhaps the most notable of outperformers, posting nearly 40% gain that year, likely the largest single-year profit by any hedge fund on record.

Amongst the many asset classes that Citadel invests across, a 20-person group focused on predicting weather trends is perhaps the least conventional. The team is tasked with helping with the commodities business, and positioned the hedge fund very well to profit off of last year’s jump in oil and gas prices. Volatility from COVID-related restrictions lifting and the Ukrainian war also created opportunities for trading in commodities, which was reported to have contributed $7-8b in gains last year.

Now, unlike the Duke brothers in Trading Places (1983 - cracking viewing if you have never seen), Citidel didn't hire the infamous Clarence Beeks to steal the top-secret crop report two days before it was made public and try to corner the FCOJ market. No, the Citadel’s weather team did something totally legal and utilized supercomputers and specialists in various weather patterns, along with hired personnel out of academia in their effort to take more than their fair share.

As alternative data continues to proliferate and become machine readable, hopefully we can expect start-ups, hedge funds and other financial institutions to chase these sources to provide the edge they need rather than resorting to Mr. Beeks and his nefarious ways - EggNog anyone?

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Portfolio News

Looking at the future of LatAm digital payments through the lessons of China - FinTech Collective and Polymath Ventures published an article this week on the future of payments in Latin America. When analyzing the development of financial technology in emerging markets, it’s arguably more useful to examine precedents in other, previously emerging regions, rather than simply in developed markets. Hence, we looked eastward toward China to help us better understand the current state of the payments landscape in Latin America. Read more

Coinbase Ventures joins $15m bet on new crypto exchange Mauve—a ‘response to the FTX fallout’ - Markus Maier and Philipp Banhardt, founders of crypto compliance firm Violet (Mauve parent company), explain that Mauve will stand out for offering users the best aspects of decentralized finance—among them secure self-custody and modular design—along with all the stringent compliance checks of traditional banks and brokerages. Other investors in the funding round include BlueYard Capital, Balderton, Ethereal Ventures, and FinTech Collective. Read more

OXIO named one of America’s Best Startup Employers - Congratulations to portfolio company OXIO for being selected to Forbes' fifth annual list of America's Best Startup Employers. In partnership with market research company Statista, America’s Best Startup Employers 2023 was compiled by evaluating 2,600 U.S.-based businesses with at least 50 employees based on three criteria: employer reputation, employee satisfaction and growth. The final list ranks 500 employers and OXIO was in the top 50! Read more

2023 fintech predictions with Zach Perret - In this report, Plaid co-founder and CEO Zach Perret discusses how the biggest fintech trends will shape digital financial services in 2023, especially as more companies are rethinking their business models as they prioritize savings and efficiency. Topics include: 1033 rulemaking and its impact on open banking, the consolidation of anti-fraud product offerings, the future of crypto, and more. Read more

Simetrik hosts Limitless Iteration Fest in Bogotá - FTC portfolio company Simetrik, an enterprise SaaS for financial control automation, gathered its team of +250 people from 12 countries for its first Limitless Iteration Fest in Bogotá. The event took place on February 25th and 26th and aimed to create a space for connection, learning, and inspiration for a team that works 100% remotely. Simetrik's investors including FTC also attended the event. Read more

Q+A with CapIntel’s CEO James Rockwood on holistic wealth management - The CapIntel platform now serves over 12,000 financial advisors in Canada through partnerships with established financial service firms such as Mackenzie Capital, Middlefield, IG Wealth Management, and others. CEO James Rockwood sat down with Fintech.ca this week to talk about holistic wealth management in Canada and how advisors can better use this strategy to help investors plan for brighter financial futures. Read more

No Need For Clarence Beeks

How Citadel harnessed the weather to claim hedge fund crown - In 2018 Ken Griffin’s Citadel hired a group of scientists and analysts whose weather forecasts were more accurate than those of most meteorological offices. The recruitment of the 20-strong team was unusual for a big hedge fund in a sector largely focused on stocks, bonds and currencies. But it has been a key part of a push by Griffin’s $54b-in-assets firm to build out a wide-ranging commodities business encompassing both futures and physical trading. Read more

Coal’s comeback pays off for hedge funds - Hedge funds including Third Point, Makuria Investment Management and Odey Asset Management have reaped a windfall from coal’s renaissance as they embrace a fossil fuel that many investors have shunned in the battle against climate change. The shares of coal-mining groups have soared as the price of thermal coal has more than tripled in less than two years, propelled by the energy crisis and Russia’s full-scale invasion of Ukraine. Read more

Industry News

US banks are finally being forced to raise rates on deposits - After years of earning next to nothing, depositors are discovering a trove of higher-yielding options like Treasury bills and money market funds as the Federal Reserve ratchets up benchmark interest rates. The shift has been so pronounced that commercial bank deposits fell last year for the first time since 1948 as net withdrawals hit $278b. To stem the outflows, banks are finally starting to lift their own rates from rock-bottom levels, particularly on certificates of deposit, or CDs. Read more

Crypto bank Silvergate to shut down, repay deposits - The California lender, one of the crypto market’s top banks, said it would wind down and return all deposits following a run that forced it to sell off assets at a steep loss to cover billions of dollars of withdrawals. Silvergate “is also considering how best to resolve claims and preserve the residual value of its assets,” the bank said in a news release Wednesday. Read more

Brazil central bank greenlights Meta's WhatsApp merchant payment system - The approval comes as Meta seeks to use the Brazilian market as a key test space for business messaging, an area that has assumed greater urgency as Meta's core advertising business has stalled. WhatsApp users in Brazil have been able to make payments between users through the application since 2021, but the new development clears the way for merchants to receive payments. Read more

Mercedes-Benz and Visa roll out in-car payments in Germany - With Mercedes pay+, which is being rolled out on select new vehicle models beginning this month, the automaker’s customers in Germany can now pay for digital services and on-demand hardware upgrades in the Mercedes me Store — the company’s shop for connected car services — via a fingerprint sensor mounted in the car. Read more

Binance.US can move ahead with plan to acquire Voyager Digital's assets, judge rules - Binance.US cleared a major hurdle in its effort to acquire the assets of bankrupt crypto lender Voyager Digital in a deal worth over $1b. The plan, assembled after previous bidder FTX itself filed for bankruptcy protection in November, had been supported by 97% of Voyager creditors who responded to the proposal, which could see them recovering nearly three-quarters of their holdings. Read more

Software Firm Riskified to pull $500m from Israel over judicial reforms - Riskified, an e-commerce risk management platform became the latest Israeli firm to move funds to bank accounts outside of Israel, following similar steps by Papaya Global, a fintech firm, and cloud cybersecurity company Wiz. Read more

Fiserv: the Steady Eddy that processes America’s readies - Selling payments, processing, and financial technology services to banks and credit unions may not be flashy. But it is steady and profitable. Fiserv made $17.7b in revenue last year, a 9% jump. Fiserv is one of the “Big Three” in bank technology. Alongside rival FIS and Jack Henry doing everything from tracking customer deposits to handling debit card transactions. Read more

Central banks going crypto. Is it a good idea? - Across the world, these sober institutions are exploring digital currencies and clashing with crypto aficionados who believe that central bankers are too old-fashioned to understand the innovative power of digital assets. Read more

Can any foreign adventurer make it in US retail banking? - It is not just fintech start-ups who have struggled to conquer America. US retail banking has been a graveyard of failed dreams for most overseas lenders. Drawn by America’s size, wealth, and economic growth, HSBC, NatWest, and Spain’s BBVA all gave it a go before throwing in the towel. French lender BNP Paribas called it quits last month. The FT explores why. Read more

Select Financings

Barley - Toronto based compensation management platform raised $4m in Seed funding led by Golden Ventures. Read more

Candidly - New York based student debt reduction and employee benefit startup raised $20.5m in Series B funding led by Altos Ventures. Read more

Cubist - California based web3 infrastructure startup raised $7m in Seed funding led by Polychain Capital. Read more

Droit - New York based regtech firm raised $23m in Series B funding led by Pivot Investment Partners and UBS Next. Read more

ECSA - Brazil based stablecoin issuer raised $3m in new funding led by Y Combinator and Arca. Read more

Elyn - France based 'try-before-you-buy' startup raised €2.5m in pre-Seed funding led by Headline and Sequoia Arc. Read more

FilmHedge - Atlanta based provider of short-term loans for film and TV series raised $5m in Series A funding led by Collab Capital, WOCStar, TriplePoint Capital, and the Savannah College of Art & Design. Read more

Fynn - Delaware based financing platform for vocational roles raised $11m in Seed funding led by Y Combinator and Susa Ventures. Read more

Growfin - Singapore based finance CRM for B2B companies raised $7.5m in Series A funding led by SWC Global. Read more

Gyroscope - London based stablecoin startup raised $4.5m in Seed funding led by Placeholder VC and Galaxy Ventures. Read more

Highway Benefits - Los Angeles based employee benefits startup raised $3.1m in Seed funding led by XYZ Venture Capital. Read more

Kresus - France based developer of a crypto "super app" raised $25m in Series A funding led by Liberty City Ventures. Read more

N2F - Paris based provider of expense management software raised €24m in growth funding led by PSG Equity. Read more

Proven - California based developer of zero-knowledge proofs of solvency raised $15.8m in Seed funding led by Framework Ventures. Read more

Ramp - London based provider of forecasting analytics for finance teams raised $5m in Seed funding led by AlbionVC and Eurazeo. Read more

Relai - Zurich based bitcoin investment platform focused on serving Europeans raised $4.5m in Seed extension funding led by Ego Death Capital. Read more

SpotDraft - New York based contract lifecycle management startup raised $26m in Series A funding led by Premji Invest. Read more

Synctera - California based banking-as-a-service startup raised $15m in growth funding led by NAventures. Read more

Till Payments - Australia based payments technology startup raised $46m in Series D funding led by Silva Fortune. Read more

Trukkr - Pakistan based trucking financing platform raised $6.4m in growth funding led by Accion Venture Lab and Sturgeon Capital. Read more

Tweed - New York based white-label crypto wallet and payments company raised $4m in Seed funding led by Accel. Read more

Vantage - New York based cloud infrastructure spend management startup raised $21m in Series A funding led by Scale Venture Partners. Read more

Yoti - London based digital identity company raised £10m in new funding led by Lloyds Banking Group. Read more


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