Fintech Update, 10/23 - 10/29
Hi! It’s Monday, October 30th, 2023.
The Rundown
NerdWallet launched its first credit card, “NerdUp by NerdWallet,” a secured credit card, offered in partnership with Bond, designed to help users build and improve their credit responsibly. The company will join a wide field of similar offerings by both fintechs and banks, including Chime, Petal, Varo, Ally, Revolut, Self, Capital One, Discover, and others. Despite the crowded field, NerdWallet claims to have launched the product after identifying a gap in the market.
Employee benefits platform Wex announced that it is acquiring Payzer for $250 million through its revolving credit facility and cash on hand, subject to close. Payzer's software simplifies scheduling and invoicing for heating, plumbing, and roofing contractors. The deal will be financed through Wex's revolving credit facility and cash on hand and is expected to close by the end of the year. The acquisition reflects Wex's strategy to expand its offering to fragmented industries like contracting, which can be difficult to reach through traditional sales channels like employers and third party administrators.
The CFPB released its 2023 Consumer Credit Card Market Report, highlighting that over the course of 2022, American consumers paid $130 billion in interest and fees on their credit cards. While the report is centered on traditional credit card lenders, it covers two important areas where fintechs have increased market share: 1) cards to help customers with no or limited credit files build credit and 2) alternatives to revolving credit card debt offered by fintechs in the form of debt-consolidation and other personal loans. Our take: This report is yet another component of the CFPB’s war on “junk fees,” focuses on the traditional largest credit card issuers, and pushes fintech market participants to the sidelines. While the report offers criticisms of both categories of fintech product offerings, it does not appear to be a focus for the Bureau.
Early-stage fintech VC Flourish Ventures secured $350 million in new funding. The new capital will be put towards “next-gen” companies in the B2B payments and vertical SaaS spaces that are “embedding finance more deeply in the stack,” according to Managing Partner Emmalyn Shaw. Flourish’s existing portfolio companies include Alloy, Chime, and Flutterwave.
Apple announced that it is making Apple Pay Later, its native BNPL option incorporated directly into the Apple Pay interface, available to all users in the U.S.
Solana Labs announced the launch of its new incubator to “[provide] founders with the resources they need to succeed” and “bring more sustainable businesses to the Solana ecosystem,” according to Product Manager Emon Motamedi.
The Reading Nook
The Wall Street Journal published an article this week arguing that dramatic repricing in Europe caused several American fintech stocks to drop and wondering if the current rate environment could lead to larger losses. Shares of Affirm dropped 15%, Block fell 8%, and PayPal Holdings fell nearly 5%. These sell-offs came shortly after a warning from European payments company and point-of-sale technology provider Worldline, that there would be economic slowdowns in Germany and other core markets.
Selected fundings
Singaporean multi-currency wallet for consumers and business accounts YouTrip raised $50 million in a Series B funding round led by Lightspeed.
Insurtech AgentSync raised $50 million in a Series B extension.
AI-enabled financial contract management platform Arteria AI raised $30 million in a Series B funding round led by GGV Capital, with participation from all existing investors.
Aleph, which is building FP&A software to build one source of truth for financial data, raised $16.7 million in a funding round “led by Bain Capital Ventures with participation from Khosla Ventures, Picus Capital and Y Combinator.”