Hi! It’s Monday, November 22, 2021.
Amazon said it would no longer accept payments from Visa credit cards issued in the UK; Apple announced that taxpayers will foot part of the bill for rolling out its new digital ID storage feature; and N26 pulled out of the US market. In other news, deposits-to-T-Bills fintech Jiko is pivoting to BaaS, lender Oportun acquired banking platform Digit, and Circle expanded its presence in Asia. All this + more below!
Amazon made waves in international payments by announcing that it will no longer accept Visa cards issued in the UK starting on January 19, 2022. The company cited “the high fees Visa charges for processing credit card transactions,” referring to the share of interchange that Visa charges merchants. Earlier this year, Visa bumped up its interchange share in the UK, since the country is no longer subject to the EU’s interchange caps post-Brexit. Visa shares fell 2.5% following the announcement.
Apple’s expansion of its digital identity storage capabilities is coming at the expense of taxpayers in the states with which the company has contracted. According to reports, the Apple’s new services contracts with Georgia, Arizona, Kentucky, and Oklahoma – which allow citizens to store their state-issued driver’s licenses in Apple Wallet – require the states to “maintain the systems needed to issue and service credentials, hire project managers to respond to Apple inquiries, [and] prominently market the new feature and push for its adoption with other government agencies,” the funding for which will come from state budgets. Apple announced the Wallet app’s ID storage feature in June, and while benefits could include reduced fraud thanks to Apple’s biometric security measures (such as Face ID), commentators have questioned “why local authorities are ceding control of citizens’ identities to a $2.46 trillion private corporation.” Keep an eye on this one. We’re betting things will only get murkier from here.
N26 pulled out of the US, putting a hold on its global ambitions amid rising costs and a series of public rebukes from its German regulator. While N26’s US operations were small, they were key to expanding globally in pursuit of CEO Valentin Stalf’s 2019 goal to “do for finance what Spotify did for music and Uber did for mobility.” Although not directly related, the decision follows the German financial regulator’s imposition of a growth cap on the firm — BaFin has limited N26 from taking on more than 50k customers per month. N26 said it will focus on its 7 million existing customers across 24 European countries and consider expanding further into eastern Europe.
Klarna continued its shopping spree and acquired Piggy, a shopping browser extension with cash back and coupons (similar to Honey), for around $100 million. As we wrote about two weeks ago, Klarna’s M&A strategy is crystal clear - diversifying into a one-stop shopping destination. This is Klarna’s SIXTH acquisition since July.
Jiko, the digital bank that converts customer deposits into Treasury bills and holds them as securities until selling them at the point of withdrawal, announced it is pivoting to become more of a platform solution with a focus on business customers instead of a consumer banking app. Last year, the firm made news by acquiring Minnesota-based Mid-Central Federal Savings Bank, becoming one of the first fintechs to also hold a bank charter. According to Jiko’s CEO Stephane Lintner, adding BaaS capabilities was always part of the plan following the Mid-Central acquisition, noting that Jiko fields “numerous inquiries from other fintechs . . . interested in leveraging its technology.”
Digital lender Oportun agreed to buy online banking platform Digit for $212 million. Oportun CEO Raul Vazquez cited speed to market as a key driver for the deal: “In Digit, we are purchasing a proven and scalable neobanking solution that gets us to market 3-5 years earlier than if we were to build it on our own.”
Circle is expanding its presence in Asia, opening a regional headquarters in Singapore and setting up a new venture arm, whose first investment is in a yen stablecoin.
Robinhood and Citadel Securities won dismissal of a class-action lawsuit brought by retail investors who accused the two firms of collusion during the meme-stock frenzy.
After gaining much hype (very wow!) and breaking online fundraising records by amassing over $40 million in under 72 hours, ConstitutionDAO’s bid to purchase one of the 13 surviving official copies of the US Constitution ended up DOA. The group was outbid by hedge fund billionaire Kenneth Griffin, who paid $43.2 million for the document. Just as the Framers intended.
The Staples Center, home of the Los Angeles Lakers (and Clippers), will be rebranded to the Crypto.com Arena, after the firm bid $700 million for naming rights to the iconic arena. The deal was panned by office supply enthusiasts and anyone with an aversion to terrible aesthetics.
Digital lender Upgrade raised $280 million in a Series F funding round co-led by Coatue at a $6 billion valuation (pre-money).
Israeli chargeback mitigation startup Justt emerged from stealth and raised $50 million in Series B funding, which built on previous rounds of $15 million and $5 million.
Imprint, the startup that offers branded payments and rewards products, raised $38 million in a Series A funding round co-led by Kleiner Perkins and Stripe.
Indian revenue-based financing platform Velocity raised $20 million in Series A funding.
Mexican BNPL player Aplazo raised $27 million in Series A funding.
BNPL provider for subprime consumers Kafene raised $75 million in additional debt and equity.