Fintech Update, 6/15 - 6/21
Hi! It's Monday, June 22, 2020.
Did you hear about the guy who injured his entire left side?
...well, don't worry, he's all right now.
Happy belated Father's Day to all you dads out there! We hope your weekend was full of delicious barbecue, quality naps, and hilarious Dad Jokes.
Leading Off
WhatsApp launched payments functionality in Brazil after several months of difficulty, allowing Brazilian users to send and receive money through the app using Facebook Pay. // The EU opened an antitrust investigation into Apple's App Store and Apple Pay. // Quicken Loans, the largest U.S. mortgage lender, is planning an IPO, which could set a significant anchor for other fintech valuations. // But wait, there’s more! Wirecard’s stock plummeted amid fraud allegations, ByteDance bid for a Singaporean digital bank license, and Upgrade raised $40M in a Series D funding round, becoming the latest fintech unicorn.
The Heavy Hitters
WhatsApp launches payments in Brazil. After facing months of challenges, WhatsApp announced that users in Brazil will soon be able to send and receive money in the app through Facebook Pay. The move takes WhatsApp from a chat-limited platform to one where users can actually transact nationally, giving WhatsApp and Facebook an additional opportunity to gain an additional foothold in consumer financial services and generate new payments-based revenues.
EU Commission opens antitrust investigation against Apple. The European Union is examining the tech giant on two grounds: (1) that Apple Pay effectively prevents competition by requiring online sellers to use it as “the preferred or default option” and limiting the ability of other payments tools to use the iPhone’s NFC function; and (2) that the company “forces developers to use the [App Store], which charges them a 30% commission.” The EU’s investigation comes after a number of complaints from Spotify and other services on Apple’s platform, and potentially could drastically alter the economics of Apple’s digital revenues in Europe.
Potential Quicken Loans IPO could significantly affect fintech valuations. America’s largest mortgage lender reportedly is planning an initial public offering (IPO), secretly filing a prospectus with the Securities and Exchange Commission. The firm’s target valuation was not included in the report, but it is speculated to be “in the tens of billions of dollars,” which would make it one of the year’s largest IPOs. If the company does IPO, its success and valuation could broadly impact other firms in the mortgage market (or fintech market more generally) also considering going public, setting an anchor on valuations and providing an “important lens on the most complex consumer finance product.”
Quick Takes
Wirecard stock plummets amid missing billions. The German payments firm, whose value once eclipsed that of large incumbent Commerzbank, delayed publication of its 2019 financial results after auditors were unable to find $2.1 billion in cash. CEO Markus Braun resigned as shares dropped roughly 75% over two trading sessions. German regulators now are investigating the firm for fraud.
ByteDance seeks Singaporean digital bank license. The firm behind TikTok reportedly partnered with an investment group backed by Singapore’s influential Lee family to “bid for a digital bank license” from the Monetary Authority of Singapore (MAS). The MAS plans to issue five licenses by the end of 2020.
Revolut transfers ownership of crypto tokens to users. The London-based challenger bank announced that it will make its users the “legal owner[s]” of any token holdings in their accounts, but will not allow those holdings to leave the Revolut ecosystem. The firm said the changes will allow it to expand its cryptocurrency features in the future.
Upgrade raises $40M, reaches unicorn status. The credit and lending startup raised $40 million in Series D funding, at a $1 billion valuation. The firm recently announced that it has achieved a $100 million run rate and positive cash flows.
Synapse lays off 50% of its staff. The San Francisco-based developer of software tools aimed at helping companies offer financial products announced that it was letting go 63 employees, nearly half of its full-time staff. The firm cited cost-saving amid the coronavirus slowdown as the reason for the firings.
Is Covid-related shift away from cash “permanent”? Yes, according to the head of Visa’s European business, Charlotte Hogg, who said that consumer “[spending] behaviours have fundamentally changed” amid the pandemic’s “boom in online shopping and precipitous declines in cash usage.”
Pop Flies
Citizens Bank launches SpeciFi Save & Grow, an integrated digital investing and high-yield savings account.
Revolut expands its open banking feature to Ireland.
Pagaya raises $102M to manage assets with artificial intelligence.
Tonik raises $21M to launch a digital bank in the Philippines.
The Economist considers whether Amazon can continue growing like a startup, highlighting recent forays into payments.
Monzo confirms its £60 million in new funding came at a £1.24 billion valuation, down 40% from its previous valuation.
Microsoft’s new “Money in Excel” add-on allows users to import account information into spreadsheets.