Fintech Update, 2/28 - 3/6

Mar 07, 2022

Hi! It’s Monday, March 7, 2022.

Mastercard and Visa suspended operations in Russia in response to the invasion of Ukraine. Russian-issued cards will no longer work in other countries and cardholders in other countries will not be able to purchase from Russian vendors. Somewhat blunting the effect of networks’ move, branded cards issued by Russian banks may still work inside the country because those transactions are handled by a local processor.

Australian BNPL provider Zip is buying its US-based rival Sezzle for $352M, a deal that was rumored for weeks. The move expands Zip’s presence in the US as its business slows down elsewhere (it recently announced large losses between July and December). The deal is yet more evidence of consolidation in a softening BNPL market.

The U.K. Financial Conduct Authority is dealing with increasing complaints about crypto, currently pursuing “50 live investigations, including criminal probes” against crypto companies. The regulator said it received 16,400 “enquiries about possible scams” in 2021, an increase of about 33% over 2020 totals.

The Federal Reserve is seeking comment on a plan to introduce a tiered system for evaluating whether to grant chartered fintechs access to its accounts and payment services. For example, fintechs with deposit insurance would be subject to more streamlined review than those without.

The New York Times looked at how cryptocurrency’s propensity for anonymity is clashing with traditional investing. Crypto enthusiasts often operate under pseudonyms they claim protect their safety and privacy, but some venture funds are willing to invest in them anyway. High profile ‘rug pulls’ and revelations that prominent projects can be backed by criminals are calling this practice into question.

General Motors, in partnership with Goldman Sachs’ Marcus brand and Mastercard, is launching a rewards card that allows users to accrue points that can be used to purchase or lease a GM car.
Vox explores whether crypto is helping Ukraine or Russia: Ukraine has raised over $10 million from donors around the world via crypto transfers, but crypto has also been used by bad actors and Russian-backed separatists to raise funds and avoid sanctions (though others refute this).
Maximilian Tayenthal, co-CEO of German challenger bank N26, announced that his company will be “structurally IPO-ready” by the end of 2022, while also noting that “private markets have proven to be incredibly liquid” and N26 has no plans to “enter the public markets anytime soon.”

Payroll API provider Atomic announced a $40M Series B, just 5 months after its Series A.
Blockchain infrastructure startup Tenderly also announced a $40M Series B, also just months after its Series A.
Social trading app Shares raised $40M in Series A funding.
USSD payments startup Stax raised $2.2M in a seed extension round.
European spend management startup Payhawk raised a $100M Series B, making it a unicorn.
Sweater Ventures raised $12M in a bid to democratic venture capital.