Fintech Update, 2/8 - 2/14
Hi! It’s Monday, February 15, 2021.
Leading Off
It was a big week for crypto, and Bitcoin in particular. Last week alone, Tesla bought $1.5 billion worth of BTC and announced that it plans to accept bitcoin as a form of payment for Tesla cars in the future; Mastercard announced it will begin allowing customers to use some cryptocurrencies on its network later this year; and BNY Mellon announced its plans to offer crypto custodian services for institutional investors later this year. // In other news Global Payments and Google announced a long-term strategic partnership, Shopify expanded Shop Pay to all of its merchants selling on both Facebook and Instagram, Klarna launched bank accounts in Germany, Ikea took a 49% stake in its banking partner Ikano Bank, and investors continued to pour investment cash into fintech (yes, again). All this + more below!
Heavy Hitters
It was another big week for crypto, and Bitcoin in particular!
Tesla bought $1.5 billion of BTC. In an SEC filing, Tesla announced that it acquired $1.5 billion of bitcoin and that it may accept bitcoin as a form of payment for Tesla products in the future. Unsurprisingly, after this news broke, the price of bitcoin rose by around 7% to over $40,000 per coin. The last 6 months have brought immense institutional momentum for BTC, as Microstrategy acquired $425 million of bitcoin last summer, Square bought $50 million last October, and Mass Mutual acquired $100 million worth in December. Tesla’s move implies its confidence in two things - Bitcoin is a valid investment vehicle and will be a form of payment.
Mastercard to allow merchants to accept crypto. Later this year, Mastercard is planning to roll out additional functionality that will give merchants in their network the option to receive payments in cryptocurrency. Although it is not yet clear what digital currencies it will support and where / how, the integration of crypto payments into Mastercard’s network is another vote of confidence in crypto’s ability to be a relevant and desired form of payment for customers and merchants alike.
BNY Mellon announces crypto custody services. BNY Mellon, the world’s largest custodial bank, announced its plans to offer crypto custodian services (holding, issues, and transferring cryptocurrencies) for its institutional clients.
Quick Takes
Global Payments and Google partner. Global Payments and Google announced a multi-year strategic partnership to deliver cloud-based products to enhance merchant customer experiences. Per the agreement, Global Payments will migrate its merchant acquiring technology to Google Cloud and will provide merchant acquiring services to Google.
Klarna expands into banking. The European buy-now-pay-later giant is adding banking services to its app for German users, allowing them to open a checking account and get a Visa debit card. Klarna said it will use its own banking core system, and expects to compete with German digital banks like N26 and Vivid Money as it rolls out the new products to more customers in the coming months.
Shopify and Facebook partner on Shop Pay. The e-commerce firm announced a deal with the social networking giant to “expand its payment option, Shop Pay, to all Shopify merchants selling across both Facebook and Instagram.” The partnership expands Shop Pay beyond Shopify’s platform for the first time, significantly expanding its ability to reach new customers.
PayPal wants to distribute CBDCs. CEO Dan Schulman laid out a vision for the payments giant’s digital wallets that includes facilitating the distribution of central bank-backed digital currencies (CBDCs). Shulman cited PayPal’s ubiquity and expected growth as reasons why the firm would be a good partner for central banks looking to distribute CBDCs en masse.
MoneyLion takes a ride on the SPAC shuttle. The personal finance platform agreed to be acquired by Fusion Acquisition, a special purpose acquisition company (SPAC) that will take the company public at a $2.9 billion valuation. “MoneyLion is a digital financial platform on a mission . . . [and] a public listing enhances our ability to scale,” said co-founder and CEO Dee Choubey.
Marcus reopens in UK. Goldman Sachs’ consumer bank is accepting new customers in the UK again – after almost eight months off – following a spike in demand last spring that forced the bank to halt applications or risk triggering strict Bank of England “ringfencing rules.” In the intervening time, Marcus has reduced its interest rates to 0.5% from 1.05% last summer.
Furniture is fintech (H/T @CharleyMa). Ikea is expanding into consumer banking by taking a 49% stake in its banking partner, Ikano Bank. The global furniture retailer plans to offer more banking services in its stores and online, and maximize the potential of existing relationships with consumers.
Robinhood ramps up lobbying efforts... The digital brokerage hired former SEC and Hill staffers as in-house lobbyists as it works to repair its image in Washington following the GameStop mania.
...and is sued by the family of a troubled user. Robinhood is facing a wrongful death suit from the family of Alex Kearns, the 20-year-old customer who committed suicide last summer after mistakenly believing he had accumulated hundreds of thousands of dollars in losses on the platform, a tragedy that sparked new calls for user education and warnings on the app.
Pop Flies
Monzo hired Carol Nelson, formerly of Cascade Bank and BofA, to be its new US CEO.
Zeta launched Zeta Joint Cards to help families coordinate their shared finances.
Long Game released Long Game Rewards, an app for banks and credit unions, to help them increase savings, improve financial literacy, and command screen-time from Gen-Z and Millenials.
Jiko processed a $4.7 million tax payment made to the IRS via a debit card transaction, generating $47,000 in cash back for the customer via its 1% debit cards cashback rewards program.
Crypto exchange Kraken launched a venture fund to invest in crypto and fintech startups.
Fundings!
Wealth management
Digital brokerage Public.com, which recently dropped payment for order flow, raised $200 million at a $1.2 billion valuation in a new funding round led by Tiger Global.
401(k) provider for SMBs Human Interest raised $55 million in a Series C extension.
401(k) rollover platform Capitalize raised a $12.5 million Series A led by Canapi Ventures.
Lending
TomoCredit, the credit card provider aimed at helping first-time borrowers build their credit history, raised $7 million in seed funding.
Peer to peer lending platform SoLo Funds raised $10 million in Series A funding to help people get immediate access to short-term personal loans.
Digital engagement and behavioral analytics platform Symend raised $43 million in a Series B extension, bringing the total for the round to $95 million.
Banking
Fair, the multilingual US neobank targeting recent immigrants, raised $20 million in funding.
Swedish challenger bank Northmill raised $30 million in new funding.
Banking technology solutions provider Nymbus raised $53 million in a Series C funding round led by Insight Partners.
Payments
BharatPe, the Indian QR code-based payment app for offline businesses, raised $108 million in new funding.
Crypto
Blockchain payments platform Celo raised $20 million in a new round of funding, which included a16z.
Corporate
Corporate card and savings analytics provider Ramp secured a $150 million debt facility from Goldman Sachs.
Corporate payment processing provider Mesh Payment raised a $13 million financing round.
Invoice management platform Libeo raised $24 million in new funding.
Rumor Mill
Klarna is rumored to be closing in on a $500 million fundraise at a $30 billion valuation, 3x the price tag from its most recent funding round last September.
Monzo is rumored to be raising an additional £50 million in equity funding.