Fintech Update, 1/19 - 1/24
Hi! It’s Monday January 25, 2021.
Leading Off
Jack Ma made a public appearance for the first time since making negative comments about Chinese regulators in October (phew); Plaid is rumored to be fielding new investor interest at a valuation that would triple its Visa acquisition price; China is moving forward with the next phase of its digital Yuan pilot program; Monzo’s founder announced that he is leaving the challenger bank; and Transferwise, Trustly, and Grab all made progress on potential IPO plans. // All this + more below!
Quick Takes
Jack Ma reemerges and everything is totally fine and normal. The Chinese billionaire and entrepreneur behind Alibaba and Ant Group, who had not been seen following his negative public comments about Chinese regulators in October, appeared in a video touring a primary school in Hangzhou and speaking to school teachers. After his run-in with China’s regulators scuttled Ant’s expected record-breaking IPO in November, Ma’s status became a point of speculation and concern. And, while “Jack Ma’s unexpected re-emergence . . . is likely a sign that his relationship with Beijing’s regulatory authorities has stabilized,” many expect the government to continue its recent crackdown on Ant and Alibaba.
Post-breakup, Plaid is living its best life. After Visa’s $5.3 billion acquisition of the finch infrastructure giant fell through under pressure from federal antitrust regulators, Plaid reportedly is fielding investor interest for a new funding round that could triple its valuation to $15 billion. Meanwhile, the firm also launched a new internal incubator, FinRise, a nine-month program for early-stage fintech founders from underrepresented backgrounds.
Chime is making big money off ATM fees. According to a new report from Axios, the digital bank – America’s most valuable neobank with a $14.5 billion valuation – makes roughly 21% of its revenue from out-of-network ATM fees. Troublingly, the $2.50 fee that Chime charges for cash withdrawals at these foreign ATMs appears to undermine its promise not to charge any hidden fees.
China begins next phase of digital Yuan trial. After successfully trialling its new digital currency in Suzhou in November and December, the Chinese central bank is continuing its digital Yuan pilot in the city of Shenzhen. The government plans to distribute “20 million digital yuan (about $3.1 million) . . . in red envelopes for citizens to use to make purchases — and to promote the new form of currency.”
Monzo founder leaves firm. Tom Blomfield announced that he will depart the challenger bank he helped create at the end of the month, citing personal struggles related to the pandemic. Blomfield commented that he has become unhappier as the company has scaled, and that the pandemic has affected his mental health. Monzo’s recent challenges have been well documented, including significant layoffs and a down round of fundraising.
Pop Flies
British challenger bank Revolut partnered with global insurer Chubb to offer purchase protection, refund protection, and ticket cancellation to users in 22 countries.
Payments giant Transferwise reportedly selected Goldman Sachs and Morgan Stanley to advise and coordinate its IPO.
ByteDance launched an in-app payments service for Douyin, “the Chinese version of its video app TikTok.” Douyin Pay will now be available to the app’s 600 million(!) daily active users.
Swedish payments firm Trustly is planning an $11 billion IPO in Stockholm later this year.
Grab reportedly is planning an IPO in the U.S. later this year.
Crypto-broker Bitpanda is taking pre-orders for a new Visa debit card that combines all assets like cryptocurrencies, fiat and precious metals into one card in real time.
DIMON QUAKES IN BOOTS: “Absolutely we should be scared 💩-less” cried the Wall Street titan when asked about fintech upstarts like Stripe, Square, and Plaid, forecasting “brutal” and “unfair” payments competition in the coming years. Invoking the divine, Dimon vowed: “I expect to win, so help me God.”
Fundings!
Cash reporting and forecasting firm Trovata, which features “multi-bank API data aggregation,” raised $20 million in Series A funding led by Wells Fargo Strategic Capital.
Payments infrastructure provider PPRO raised $180 million in new funding at a valuation north of $1 billion, making the London-based firm the latest fintech unicorn.
Brigit, the fintech that covers users’ overdraft fees, raised $35 million in Series A funding.
Auto refinancing platform MotoRefi raised $10 million in a new funding round.
Berlin-based wealthtech platform Elinvar raised €25 million in new funding.
Wealthpilot raised €8 million in new funding to build software to aggregate consumer financial data for the wealth management industry.