Published:
Aug 31, 2024
Author:
Sarah Parsons Wolter
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During a week where it feels like the world economy rests on Nvidia’s earnings (Nvidia’s earnings have been reported to have the same impact on markets as US jobs figures), the Magnificent 7 stocks continue to be top of mind. But it would appear that the opportunity set extends far beyond the U.S. - the emerging markets are back.
In the 2000s, the economic growth of emerging markets was first coined the “rise of the rest.” But by the early 2010s, it was clear that the world was back in an era of U.S. centric growth. That landscape is subtly changing again today.
The FT reports that the proportion of emerging economies in which per capita GDP is likely to grow faster than the U.S. is back to the 2000s: almost 90% in the next 5 years. And these predictions are supported by fundamental data: excluding China, company earnings are growing at 19% per year in emerging markets, compared to 10% in the U.S.
Thematically, many emerging market economies are well poised to serve the wave of AI application driven needs - Taiwan in semiconductors, Malaysia in data centers and Mexico for nearshoring capabilities given its proximity to the U.S. If met, this wave of demand is likely to create new pools of profit in emerging economies. In short - just like a celebrity emerging from filtering drinking water through their underwear with Bear Grylls on the side of a wet mountain - from the depths they emerge!
Portfolio News
Flutterwave expands African footprint to Uganda - With a population of over 47m, Uganda has seen its digital economy grow rapidly owing to accelerated smartphone adoption and increased internet penetration. The payment firm said that the license would also enable it to facilitate international transfers from the diaspora into Uganda in partnership with other operators. Read more
Simetrik and PwC Chile forge strategic alliance to boost the technological ecosystem of FinOps teams in Chilean companies - The alliance between Simetrik and PwC Chile represents a significant step forward for large companies in Chile, especially those seeking to modernize their financial processes. In a business environment where accuracy and efficiency are crucial, the partnership aims to offer robust and scalable solutions that address the complexities of financial management and control. Read more
MoneyLion announces $20m share repurchase program - Under the Repurchase Program, MoneyLion may repurchase from time to time shares of its Class A common stock for cash through any manner, including open market transactions (including pursuant to broker plans in accordance with Rule 10b5-1 and Rule 10b-18), privately negotiated transactions with third parties or accelerated share repurchase agreements, and in such amounts as MoneyLion deems appropriate, subject to legal requirements and other corporate considerations. Read more
Performativ introduces DORAedge: The all-in-one solution for DORA compliance - With the January 2025 deadline approaching, Performativ's solution is the first platform dedicated to simplifying compliance with the upcoming Digital Operational Resilience Act (DORA). DORAedge automates vendor tracking, risk labeling, incident management, and policy reviews, all powered by our proprietary AI technology - your 24/7 DORA expert. Read more
Saudi's flagship fintech event | 24 Fintech 2024 - FTC's Faisal Kawar will be speaking on several panels at 24 Fintech in Riyadh next week! The MENA region is at an incredible inflection point for financial services, which we've witnessed firsthand. If you will be there, please reach out to him @ [email protected]. Read more
The Rest is Back
The world should take notice — the rest are rising again - In the 2000s, as a broad economic boom in emerging economies was drawing billions of dollars into their financial markets, author Fareed Zakaria captured this historic moment as “the rise of the rest”. Now a similarly encouraging story is unfolding in the emerging world, but few observers have noticed and still fewer foreign investors have acted on this momentous shift. Read more
Industry News
US has more 401(k) millionaires than ever, report shows - As of June, there were roughly 497,000 so-called retirement-created millionaires in the U.S., according to the wealth management firm. Gen Xers, the generation closest to retirement, are making the biggest gains in saving for retirement, increasing their IRA contributions by 30% over the last year. Read more
Klarna aims to halve workforce with AI-driven gains - The Swedish fintech has already cut its workforce from 5,000 to 3,800 in the past year. Chief executive Sebastian Siemiatkowski told the Financial Times that Klarna could employ as few as 2,000 employees in the coming years as it uses AI in tasks such as customer service and marketing. Read more
Student loan debt attracts private-credit investors - Carlyle and KKR underlined the trend in July when they bought a $10.1b portfolio of private student loans at auction from Discover Financial Services, where half of the loans carry fixed rates and the rest have floating rates, according to the asset managers. The move by the two firms takes advantage of pending new capital requirements for U.S. banks, which require banks to set aside more capital to guard against risk and which have drawn criticism from bankers as too restrictive. Read more
NFL owners approve private equity deals, unlock billions - Under the new NFL policy, teams can sell up to 10% of their common equity to PE firms, according to a summary shared by the league. A firm can buy as much as 10% of a team, or little as 3%. No single fund can invest in more than six teams, and the minimum hold period for each investment is six years. Read more
UK to delay bank capital reforms until at least January 2026 - The government wants to align timetable for rule changes with US and will publish rules on September 12. Read more
CBA and BNY deliver near real-time cross-border payments - BNY commercial payments from overseas to businesses and individuals with Australian bank accounts will now be available to the final beneficiary in under a minute, 24 hours a day, seven days a week. Read more
Texas sues G.M. over collection and selling of driver data - The lawsuit accuses the automaker of tricking drivers into sharing detailed driving records that were then sold to insurance companies. Read more
How will self-driving cars learn to make life-and-death choices? - A thought-provoking long-form read in the WSJ. Insurance companies will face challenges assessing AI decision-making risks, shifting liability from drivers to manufacturers, adapting to evolving regulations, and managing new risk categories like Vehicle-2-Vehicle communication. Read more
Just four companies are hoarding tens of billions of dollars worth of Nvidia GPU chips - Which companies have all the Nvidia chips? Each Nvidia H100 can cost up to $40,000, and one big tech company has 350,000 of them! Read more
Select Financings
Bridge - San Antonio based money movement startup raised $58m in growth funding led by Sequoia Capital and Ribbit Capital. Read more
Cardboard - Oslo based provider of SaaS subscription management solutions raised €1.9m in Seed funding led by Skyfall Ventures. Read more
Chainbound - New York based Ethereum research firm raised $4.6m in Seed funding led by Cyber Fund. Read more
Comun - New York based digital bank focused on U.S. immigrants raised $21.5m in Series A funding led by Redpoint Ventures. Read more
nOps - San Francisco based AWS spend management startup raised $30m in Series A funding led by Headlight Partners. Read more
Peregrine Exploration - New York based developer of the Level stablecoin protocol raised $3.6m in Seed funding led by Polychain Capital and Dragonfly. Read more
Quai - Texas based Layer-1 crypto network raised $5m in new funding led by Cogitent Ventures and MH Ventures. Read more
SatLayer - Miami based BTC re-staking platform developer raised $8m in pre-Seed funding led by Castle Island Ventures and Hack VC. Read more
Solayer Labs - San Francisco based developer of a Solana restaking protocol raised $12m in Seed funding led by Polychain Capital. Read more
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