Fintech Update, 10/30 - 11/5
Hi! It’s Monday, November 6th, 2023.
The Rundown
Intuit announced that it is sunsetting its budgeting app Mint, encouraging existing users to shift to Credit Karma (which the company acquired in 2020). Though Credit Karma has similar functionality to Mint, like the ability for users to monitor spend and income levels, it doesn’t have the same budget tracking offering. We’d bet that a similar feature is on the roadmap for Credit Karma – merging the two apps’ product offerings could enable Credit Karma to move upstream to the higher-credit-score userbase that Mint serves, while simultaneously creating cost synergies for Intuit. Mint, which Intuit acquired in 2009 for $170 million, is not a material source of revenue for Intuit.
Affirm announced that it is extending its partnership with Amazon to offer buy-now-pay-later for small businesses. The news represents an effort by Affirm to monetize additional revenue streams and further deepen its relationship with merchants.
The SEC subpoenaed PayPal over its recently-released PYUSD stablecoin. Launched in August, PayPal said the stablecoin would be rolled out to US customers gradually (it was launched on Venmo in late September). That the SEC is already scrutinizing PayPal will result in further concerns about the US stablecoin space.
Swedish buy-now-pay-later fintech Klarna narrowly avoided an employee strike after reaching an agreement with workers on Friday. The disagreement centered on the lack of a Collective Bargaining Agreement, which is standard for most Swedish businesses, covering more than 90% of employees.
Pave, a digital wallet developed by a consortium of big banks to take on big tech incumbents, is launching next year. Early Warning Systems, owned by seven of the country’s biggest banks and operator of the Zelle network, hopes to differentiate the wallet from Apple Pay and others by automatically loading consumer’s cards into the wallet, and “pre-selecting” from those cards for each purchase, based on historical e-commerce behavior. Spooky?
FTX Founder Sam Bankman-Fried was found guilty on all seven criminal fraud counts, facing a maximum sentence of 115 years in prison.
The Reading Nook
The CFPB released a report summarizing recent state-level Community Reinvestment Act (CRA) laws, which have recently been passed to supplement the widely criticized federal Community Reinvestment Act. The purpose of CRA laws is for banks to offer credit in the same areas where they take deposits, as well as to incentivize greater investment in low and moderate income areas through mortgage originations, secondary market purchases, and small business lending. The federal CRA has recently been modified by a new final rule announced last week. Unlike the federal CRA, which applies only to banks, many state CRA laws apply to nonbanks and fintechs. Fintechs should be familiar with these state laws for all states in which they operate and/or offer services, as many of these laws are quite broad.
The Verge questioned crypto advocates’ contention that FTX’s collapse was an anomaly.
Selected fundings
Riyadh-based BNPL provider Tabby raised $200 million in Series B funding at a $1.5B valuation, led by Wellington Management with participation from Bluepool Capital and existing investors.
Brazilian BaaS startup QI Tech raised $200 million in its Series B funding round, led by New York-based General Atlantic.
Singapore-based multi-currency wallet provider YouTrip secured $50 million in Series B funding led by Lightspeed.
Just six months after launching, senior banking platform Charlie raised $16 million in Series A funding led by TTV Capital along with $7 million in debt funding.