Fintech Update, 11/9 - 11/15
Hi! It’s Monday November 16, 2020.
Leading Off
This week, we’re leading off with a *special edition* of The Big Idea, in which we explore the recent news and growing buzz around Central Bank Digital Currencies (CBDCs). Driven by China’s digital yuan, global uncertainty, and private initiatives like Libra, CBDCs are quickly going from a fringe idea to one being seriously explored by governments around the world. Is this another flash in the crypto pan, or are CBDCs really coming to a central bank near you? Read on and let us know what you think!
In other news, Dave announced a partnership with API platform Galileo; payments startup SumUp received an eMoney license from the Irish Central Bank; and Figure Technologies applied for an OCC charter. // All this + more below!
The Big Idea
We’ve written a lot about CBDCs recently, reflecting both the increased frequency of CBDC stories and the magnitude of what they could mean to global financial services if they truly take off. In fact, central banks’ nascent efforts to develop digital versions of their currencies may be largely motivated by their interest in maintaining control and oversight over money movement that involves their currencies and citizens. CBDCs are one way that central banks can continue to control access to and use of the primary means of payment in a world where cash usage declines every year and more people prize digital-first tools, ease of access to their funds, and reduced barriers to money transmission and exchange.
[Click here to read the full Big Idea…]
Quick Takes
Dave announces it is working with Galileo. The Los Angeles-based digital bank has partnered with the Salt Lake City-based API platform to power Dave Banking, offering customers “a digital bank account and debit card . . . and fee-free access to 32,000 MoneyPass ATMs.” Galileo helps dozens of tech companies, including SoFi, Chime, and Monzo, integrate financial products into their stacks through APIs.
SumUp gets digital money license from Irish Central Bank. The London-based global payments startup was granted an eMoney license from the Central Bank of Ireland, which allows it to offer payments services across 26 European countries. SumUp’s EU business, which has 3 million merchants on its platform, will be centrally regulated in Dublin.
Britain’s fintechs brace for Brexit. As the threat of a no-deal Brexit looms, fintech firms in the UK are rushing to put in place contingency plans. The possibility of losing lucrative “passporting” rights has led firms like Curve and Modulr to establish European outposts. Other big players, like Revolut, are seeking secondary licenses in EU countries like Lithuania.
Figure Technologies applies for OCC charter. The alternative lender, which uses blockchain to process home equity loans, has applied for an OCC national bank charter. Figure first announced its intention to pursue a charter and offer banking products after a $103M raise in December. Regulatory approval would allow Figure to offer its product suite nationwide.
Rapyd launches cross border fraud prevention solution. The Fintech-as-a-Service provider launched Rapyd Protect, a solution designed to protect against fraud across countries and payment methods. Protect utilizes fraud decisioning models and proprietary data sources fed by Rapyd’s global payment network operating in over 100 countries.
BTV closes $75M fund. Better Tomorrow Ventures (BTV), a VC firm co-founded by former NerdWallet co-founder Jake Gibson and former 500 Startups general partner Sheel Mohnot, closed its debut fund at $75 million. BTV is focused on fintech investments, particularly those that help build financial products into tech stacks.
Pop Flies
TechCrunch looks at the rise of subscription services in fintech.
Paxos’s CEO sees mass adoption of tokenized assets in the future, spurred by PayPal’s recent integration with his firm to offer crypto services.
Chime is partnering with rapper 21 Savage’s Leading By Example foundation to teach financial literacy to high school students through an online course/playlist.
Fundings!
Global workforce benefits startup Remote raised $35M in Series A funding.
Nigerian mobile-first challenger bank Kuda, raised $10M in seed funding.
Indonesia fintech app LinkAja raised $100M in a Series B led by Grab.
Italian SME-focused challenger bank Aidexa raised €45 million in seed financing.
Menlo Security raised $100M in Series E funding, likely its last funding before an IPO.
Personal finance firm Truebill raised $17 million in Series C funding.