#552
Overseas Evasion
Published:
Aug 10, 2024
Author:
Sarah Parsons Wolter
Share:
The Coca-Cola controversy bubbled to the surface recently thanks to a colossal $16b tax dispute with the IRS, a sum capable of wiping out a year and a half of profits. The red flags originated from Coca-Cola’s practice of funneling profits through low-tax countries like Ireland - a maneuver that is allegedly shifting profits to reduce U.S. tax liability – making Uncle Sam's share look like the diet version.
The case is a litmus test for the IRS, showcasing its commitment to tackling corporate tax evasion. This ruling could send shockwaves throughout the corporate world, as other multinational companies closely monitor the outcome. The IRS's approach may serve as a template for auditing other firms with profitable overseas subsidiaries. A decision against Coca-Cola might encourage stricter enforcement on similar tax arrangements, prompting companies to rethink their tax strategies and brace for increased scrutiny on their global operations.
With stakes this high, Coca-Cola's next moves are pivotal. Will it dance out of the IRS's grasp, or face a hefty payout that could reshape its financial landscape? As this saga unfolds, the beverage behemoth's battle is set to be a defining moment in the corporate tax arena.
Portfolio News
Octane raises $50m in Series E funding round - The capital will fuel Octane's expansion into new markets, supercharge its growth in existing markets, and position the company even more favorably for long-term success. This funding round is unique in that it was composed entirely of existing investors looking to increase their investment in the company. Valar Ventures led the round with participation from Upper90. Read more
German B2B fintech Mondu secures EMI license from De Nederlandsche Bank - The license will accelerate the German company’s expansion across Europe while enabling the company to support more customers and launch complementary payment services like eWallets and Credit Cards. Read more
Ziina becomes first venture-backed start-up to secure UAE Central Bank SVF License - This marks a significant milestone for Ziina, enabling it to rapidly expand its range of specialized financial services and reinforcing its position as one of the only privately-owned fintech in the UAE with such authorization. Read more
MoneyLion continues to play winning hand with middle-income Americans - MoneyLion is enjoying a successful pivot from a neobank to what is essentially a consumer and business financial services portal and shopping mall. Among the products its “essential” consumers are buying more of from the site and app: buy now, pay later, income advances, earned wage access, secured card products and short-term installment loans. Read more
MoneyLion announces second quarter 2024 results - MoneyLion recorded record revenue of $131m, up 23% YoY and net income of $3.1m for the second quarter of 2024 versus a net loss of $27.7m in the second quarter of 2023. Adjusted EBITDA was $18.5m for the second quarter of 2024 versus $9.2m in the second quarter of 2023, representing 14.2% adjusted EBITDA margin. Read more
Embroker names Andy Lea Chief Insurance Officer, Kristy Malm COO - The executive appointments were made to expand Embroker’s digital insurance platform and advance its mission to further modernize the insurance industry. Read more
Overseas Evasion
How a $16b tax stand-off stays unseen in Coca-Cola’s earnings - The soft-drink maker has been hiding “astronomical levels” of profit in low-tax countries including Ireland to shield it from the US Internal Revenue Service, according to a withering court judgment, which the company is planning to appeal against later this year. Read more
Industry News
The insurance industry is winning a fight to kill new protections for retirement savers - The high-stakes battle centers on a new standard for financial advice affecting the nearly $1t a year rolled over from employer-sponsored 401(k)s to individual retirement accounts. The Labor Department rule would require advisers on IRAs to recommend what is best for the saver and avoid misrepresentations and excessive charges. Read more
X is getting closer to launching its payment service - When Musk initially acquired the social networking app formerly known as Twitter, he envisioned a platform where users could store money in their X accounts, send payments to other users, and potentially access high-yield money market accounts. The latest finding tells us the launch of a payment service is likely soon, which is in line with Musk’s previous goal of mid-2024. Read more
SEC investigating Wall Street banks over ‘billions’ in lost interest payments - The probe into “cash sweep” accounts comes as a number of companies have increased the interest they are paying clients. But the rates being offered to savers, particularly by the nation’s largest banks, remains far lower than the returns paid to banks based on short-term interest rates set by the Federal Reserve. Read more
NCR Voyix agrees to sell digital banking unit to Veritas Capital for $2.45b - The all-cash deal includes a future additional contingent consideration of up to $100m and is forecast to close by the end of this year, subject to the approval of regulators. NCR Voyix’s digital banking platform offers a suite of software solutions aimed at supporting the digital transformation of banks, credit unions and other financial institutions. Read more
Apple services revenue rises with boost from payments - Tech giant Apple has sought to expand its payment services, adding an Apple Pay buy now, pay later feature and extending tap-to-pay feature to more countries. The moves are paying off now - the company said its overall services category, which includes payments, logged a record-generating $24.21b in revenue for the quarter. Read more
Monzo tops 10m UK personal customer mark - With over 10m customers, Monzo, founded in 2015, said it means that one in five adults in the UK are using Monzo. Monzo has been busy this year, with a major funding round of $600m led by Alpahbet’s CapitalG, and new product launches including Monzo for under 16s and Monzo Pension. Read more
Goldman Sachs is giving select clients access to one of its hottest businesses - The Wall Street giant has started allowing certain asset-management clients—namely insurance companies—to invest alongside it when it loans money to borrowers including private-credit funds and nonbank lenders such as mortgage providers. The move is part of a plan to roughly double its private-credit assets under management to $300b in the next five years. Read more
Brazil’s Securities and Exchange Commission approves Solana-based ETF - It is the first product of its kind in Brazil and among the first Solana-based exchange-traded products (ETPs) globally. The first was launched by Switzerland-based investment product provider 21Shares on the SIX Swiss Exchange in June 2021. Read more
Select Financings
Bilt Rewards - New York based credit card for rental rewards issuers raised $150m in growth funding led by Ontario Teachers' Pension Plan. Read more
Blockscout - Seychelles based blockchain analytics platform raised $3m in Seed funding led by 1kx. Read more
Chaiz - Austin based comparison marketplace for extended car warranties raised $3.7m in Seed funding led by ResilienceVC. Read more
Climatize - California based impact investing platform raised $1.75m in pre-Seed funding led by Myriad Venture Partners. Read more
CloudPay - U.K. based payroll and payment solution raised $120m in growth funding led by Blue Owl Capital. Read more
HouseAmp - Seattle based home-financing startup raised $12.4m in Series A funding led by Third Prime and Fortress Private Equity. Read more
HubiFi - Ohio based revenue recognition solution raised $2.5m in Seed funding led by Motivate Ventures, Anthemis and Rev1. Read more
Hyperbots - India based AI accounting firm raised $2m in Seed funding led by Kalaari Capital. Read more
Lucky One - Egypt based credit product company raised $3m in Series A funding led by Lorax Capital Partners, KEM and DisrupTech Ventures. Read more
Monkey Exchange - Brazil based receivables marketplace raised $11m in Series B funding led by L4. Read more
Morpho - France based provider of a decentralized cryptocurrency lending protocol raised $50m in new funding led by Ribbit Capital. Read more
Mynt - Philippines based e-wallet startup raised $393m in growth funding led by Ayala and MUFG Bank. Read more
PortfolioPilot - San Francisco based AI-driven financial advisory platform raised $2m in Seed funding led by Morado Ventures and New Enterprise Associates. Read more
Rich Data - Australia based AI decisioning platform for business and commercial lenders raised $5.9m in Series B extension funding led by Acorn Capital. Read more
Savvy Wealth - New York based platform for financial advisors raised $15.5m in Series A funding led by Canvas Ventures. Read more
Stabble - United Arab Emirates based liquidity and trading layer raised $2.5m in pre-Seed funding led by Masterblox. Read more
Wisedocs - Canada based medical records and insurtech company raised $3.25m in new funding led by CIBC Innovation Banking. Read more
Zoth - India based Defi infrastructure company raised $4m in new funding led by Taisu Ventures and G20. Read more
FinTech Collective Newsletter
Curated News with Context
Delivered every Monday, the weekly newsletter, produced by our team, provides a tightly edited rundown of global fintech news, along with a bit of our original analysis.