Fintech Update 12/18 - 1/7
Hi! It’s Monday, January 8th, 2024.
Happy New Year! We hope you had a happy and restful holiday season – we’re excited to be back in your inboxes for the 10th(!) year. Let’s get to it. 🙂 – Team TFU
The Rundown
Seven days into 2024 and Carta’s new year already has more drama than a high school cafeteria. Late last week, the co-founder and CEO of project management software company Linear took to zombie Twitter (er, X) to call out the cap table management firm for sending an email to a Carta angel investor offering him a chance to sell shares of Linear – without the knowledge or approval of Linear. In a (wonderfully funny) coincidence, “that angel investor is related to [Linear’s CEO] and immediately alerted him to the email outreach.” The incident also does not appear to be an isolated one: the Linear story prompted others to pile on, sharing examples of Carta soliciting “investors or employees of private companies . . . to put their shares on sale. These people haven’t opted in to this and companies haven’t approved these sales.” The back-and-forth has taken on a life of its own on Twitter, with takes, stories, and defenses on both sides – but undoubtedly this is not the kind of start to the year that Carta wanted, adding to a mounting list of negative news over the past several years (e.g., suing its former CTO in 2023, facing a gender discrimination suit from its former VP of marketing in 2020, or a negative profile in the New York Times on the same issue).
A consumer watchdog group claimed Starbucks “rigs” its payments app, forcing users into a payment cycle where they can not spend the entire balance of their account. The Washington Consumer Protection Coalition says that the coffee giant has claimed nearly $900 million in unspent consumer funds over five years. Starbucks refutes the accusation, given users can spend their entire remaining balance on a purchase. The watchdog’s complaint gets at the heart of the model underlying Starbucks’s and other companies’ wallet programs: a gift-card based payment structure that, per FinCEN guidance, only permits funding wallets in specific increments (e.g $5, $10).
HSBC launched an international money transfer product, Zing, to compete with fintech options like Wise, PayPal and Remitly. “Zing has a global ambition,” said Nuno Matos, CEO of HSBC’s global wealth and personal banking business. “We want to establish ourselves as a global platform for international payments.
Identity verification provider Clear expanded from helping you annoy the plebs in the slow line at airport security into financial services, launching a Know Your Customer (KYC) product.
Jack Ma officially ceded control of Ant Group, roughly a year after announcing his retreat to appease Chinese regulators. The news comes three years after Chinese authorities canceled the fintech giant’s IPO, and six months after regulators ended the crackdown with a major fine.
Salesforce announced that it plans to acquire automated commission management platform Spiff for an undisclosed price. It’s worth noting that Salesforce Ventures invested in Spiff’s Series B round in 2021 and led its $50 million Series C round earlier this year.
New fintech funds! Charley Ma and Mahdi Raza, who helped grow Plaid, Robinhood, Ramp, and Alloy, announced the launch of their new venture, Exponent Founders Capital and announced that they raised $50 million for Fund I in November 2021 and recently closed $75 million for Fund II. The firm will invest in fintech, enterprise SaaS, infrastructure and GTM companies. In addition, Ruth Foxe Blader, former partner at Anthemis Group, launched her own fintech-focused venture firm, Foxe Capital.
The Reading Nook
Simon Taylor wrote a great rant in Fintech Brainfood: “BNPL is Good; I will die on the hill.”
Selected fundings
Saudi Arabian BNPL provider Tamara raised $340 million in a Series C funding round at a $1 billion valuation.
Workplace savings and investing platform Vestwell raised $125 million in a Series D funding round “preempted” by Lightspeed Ventures Partners.
Family banking platform Crew raised $2.5 million in pre-seed funding.