Fintech Update, 6/1 - 6/7
Hi! It's Monday, June 8, 2020.
Dear readers,
As we’re sure is the case with all of you, we’ve been disturbed by the tragic killing of George Floyd and the ensuing violence and shocking responses on the part of some elected and law enforcement officials. The mission of The Fintech Update is inherently niche, and we feel neither well-placed nor qualified to comment on the institutional racism that continues to plague our world. Nevertheless, we believe all platforms (even those as small as ours!) can encourage action in these challenging times.
The suggestions below are not unique, “big,” or ground-breaking, but we hope they provide a baseline for what we all can do to help heal our country and our world going forward:
Vote! Make sure that you are registered to vote and that you exercise that right whenever you can to help ensure our elected leaders are high-caliber and accountable.
Donate! Particularly during hard times, consider giving generously to causes that encourage equality of opportunity and fight injustice. As a society, we can only be as strong as our citizens who are most in need. (Some ideas for inspiration)
Engage! Help educate yourself and others about challenging topics and uncomfortable truths by reading books, watching films and documentaries, listening to podcasts, and – most critically – having conversations with people who come from different backgrounds and may have different experiences and beliefs than you. Perhaps nothing is more important for the long-term success of our society than reinforcing our crumbling civil discourse.
There is a lot of work to be done. Let’s help each other do it together.
Best,
Team TFU
Leading Off
At a time when digital/challenger banks around the world are struggling, Varo Money brought in a cool $241 million in Series D funding, as it gets closer to becoming a fully chartered national bank. // Newly minted Acting Comptroller Brian Brooks has the OCC feeling DLTful, with the agency issuing an ANPR to better understand how crypto is being used in banking. // Facebook and PayPal both invested in Indonesian ride-hailing app Gojek, which is hitting the fintech pretty hard these days as it works to beef up its financial services arm. // Meanwhile . . . Revolut hit a new milestone, Monzo got more bad news, and Alibaba and Mastercard launched new products.
The Heavy Hitters
Varo Money raises $241M, inches closer to bank charter. The digital banking service, which recently won approval from the FDIC to offer deposit insurance – moving it one step closer to completing the arduous process of becoming a full-fledged bank – raised $241 million in a Series D funding round. Varo has now raised $419 million in total on the strength of its two million user accounts and reportedly strong growth in 2020. The firm expects to complete its bank charter process by the end of the summer, “at which point it will expand its lineup of services.”
OCC signals potential changes to digital banking rules. The Office of the Comptroller of the Currency (OCC) issued an advance notice of proposed rulemaking related to bank innovation, announcing that it is “reviewing its regulations on bank digital activities to ensure that its regulations continue to evolve with developments in the industry.” The OCC is requesting public input on a number of items, including “how cryptocurrencies and distributed ledger technology are used in banking,” which may signal a policy priority for new Acting Comptroller Brian Brooks, who is the former General Counsel of crypto exchange Coinbase.
Alibaba launches loan financing for US businesses. The Chinese e-commerce giant is making a new push into the U.S. market with Payment Terms, a new lending product that will allow U.S. businesses that make global purchases to delay the bulk of their payments by up to 60 days. The rollout is part of Alibaba’s broader launch of three new “digital services for shipping, financing, and trade shows.”
Facebook and Paypal invest in Gojek. The tech and payments giants invested undisclosed amounts in the Indonesian ride-hailing firm, which Gojek intends to use to “ramp up its payments and financial services” in Southeast Asia. They join other high-profile tech firms like Google and Tencent that have backed the startup. Facebook sees a similar opportunity in Gojek as it did in its recent investment in Reliance Jio: connecting with millions of small businesses.
Quick Takes
Revolut hits 12 million users, launches “super app”... The London-based challenger bank hit a new milestone in its global user base at a time when challenger banks like Monzo and N26 are struggling to maintain theirs. Revolut also refreshed its app, helping users better manage their finances by separating their ‘Home’ (banking) and ‘Wealth’ (trading) finances into distinct tabs.
Mastercard launches Fintech Express. The payments giant announced a program to help fintechs simplify launching payments products, shortening the process from months to days.
...while Monzo will lay off up to 120 employees. The British challenger bank announced that up to 120 staff in the U.K. will be made redundant, despite previously stating that furloughs and pay cuts would help the firm avoid layoffs. The news follows Monzo’s recent devaluation and the resignation of CEO Tom Blomfield.
New funding raises Stenn valuation to $500M. The London-based trade finance firm brought in new funding from Barclays, on the heels of a recent $200 million injection from Crayhill Capital Management, making it a demi-unicorn.
Coinbase cuts rewards on its USD stablecoin. The crypto exchange slashed the APY on USDC holdings about 90% to 0.15%. USDC is the second largest stablecoin by market share.