Fintech Update, 9/14 - 9/20
Hi! It’s Monday September 21, 2020.
Leading Off
The State of Wyoming approved cryptocurrency exchange Kraken’s application for a special purpose depository institution charter. // The Conference of State Bank Supervisors unveiled a new streamlined regulatory regime for money services businesses. // In other news, it was a week filled with massive funding for mature fintechs, as Chime raised $485 million, Affirm raised $500 million, and Klarna raised $650 million; Marcus launched a new personal finance management tool; and MSCHF partnered with Privacy.com to offer a competitive multiplayer bank account. // This + more below!
Heavy Hitters
Kraken approved for SPDI (pronounced “speedy” 😊) bank charter. The State of Wyoming approved cryptocurrency exchange Kraken’s application for a special purpose depository institution (SPDI) charter, making Kraken the first such bank in Wyoming. The approval makes Kraken the first digital asset company in the U.S. to receive a bank charter recognized under both federal and state law. Kraken will be able to offer a host of new products, “like qualified custody for institutions, digital-asset debit cards and savings accounts all the way to new types of asset classes.” The SPDI and associated supervisory program symbolizes a landmark way in which thoughtful regulation can drive innovation for fintech companies. While there is a long way to go before Kraken Financial opens its doors, this approval will serve as a sign of encouragement for other digital assets firms, like Avanti Bank & Trust which is in the process of forming a SPDI.
US state regulators agree on new regime for money services businesses, cryptos. The Conference of State Bank Supervisors (CSBS) will announce on Tuesday a single set of supervisory rules for money transmitters that will require them to undergo a single examination to expand nationally, rather than dozens of individual state exams. The streamlined regime encompasses 48 states and applies to 78 large payments and crypto firms. CSBS’s President views the approach as more efficient for companies and regulators themselves, as state regulators will share information and reserve the right to launch individual examinations. We can’t help but think of OCC’s mulled plans for a ‘payments charter’ in light of this announcement, which you can read more about in our recent Big Idea on Acting Comptroller Brian Brooks’s tenure at the agency.
Quick Takes
Chime raises $485M. U.S. challenger bank Chime raised $485 million in Series F funding at a $14.5 billion valuation, a huge leap from the company’s $1.5 billion valuation set in early 2019. The newest valuation and funding helped Chime overtake Robinhood as the most valuable U.S. consumer-facing fintech.
Klarna confirms $650M funding raise. Swedish fintech Klarna confirmed that it has raised a fresh equity funding round of $650 million at a $10.65 billion valuation. The newest valuation and funding makes Klarna Europe’s most valuable fintech.
Affirm raises $500M. Buy-now pay-later fintech Affirm raised $500M in Series G funding and introduced an interest-free biweekly payment product for transactions as low as $50.
UK banks sign ‘Fintech Pledge’. Led by entrepreneur network Tech Nation and backed by the Treasury, the pledge aims to establish efficient partnerships between banks and fintechs. Major banks like Barclays and HSBC have signed on, promising to provide clear guidance to fintech firms with respect to onboarding.
Marcus launches PFM tool. Goldman Sachs’ consumer fintech arm Marcus rolled out a new personal finance management tool, two years after Goldman acquired personal finance management firm Clarity Money. Marcus is planning to release a digital checking account and an investing service as well next year.
MSCHF and Privacy.com partner. Master of chaos and hype MSCHF partnered with Privacy.com to launch Card v Card, a competitive multiplayer bank account where the aim is to spend someone else's (MSCHF's) money. Check out the manifesto behind the game here.
X1 card opens a waitlist. X1 card, which is being hailed as “the smartest credit card ever made,” opened its waitlist for signups. The X1 card bases users’ spending limits on their income, not credit score (and offers a pretty sleek card built with 17g of stainless steel).
Change Financial bids for Wirecard’s AU/NZ operations. The Australian payments fintech is set to buy the disgraced payments company’s Australian and New Zealand businesses for $7.8M. The acquisition follows plans for Railsbank and PagSeguro to buy Wirecard’s UK and Brazilian operations respectively.
Pop Flies
The FT looks at a customer’s nightmare saga with Revolut, highlighting growing concerns about neobanks’ service standards.
Libra adds more HSBC talent with hire of former European head James Emmett as managing director of Libra Networks, the association’s operating subsidiary.
Stripe is offering employees $20k to move out of San Francisco, paired with a 10% pay cut.
Other Fundings!
Regtech EverCompliant raised $35 million in a Series B funding round.
Identity operating service Alloy raised $40 million in a Series B funding round led by Canapi Ventures, the D.C.-based, fintech-focused venture fund.
Uruguayan cross-border payment processor dLocal raised $200 million at a $1.2 billion valuation, making it the country’s first 🦄.
Cybersecurity firm JupiterOne raised $19 million in a Series A funding round.