Fintech Update, 3/15 - 3/21
Hi! It’s Monday, March 22, 2021.
Leading Off
The Department of Justice is investigating Visa’s debit card practices due to suspicion of anti competitive practices; Stripe raised $600M in new funding at a $95B valuation; Morgan Stanley will allow certain clients to access funds that enable ownership of bitcoin; PayPal and Flutterwave announced a partnership to allow global PayPal customers to pay African merchants on Flutterwave’s platform; and Revolut pulled out of Canada after only 18 months. In other news, Chime is preparing for a stock listing that could value the digital bank at a >$30 billion valuation, Plaid is in talks to raise $600M in new funding at a $10-$15B valuation, and eToro plans to go public via SPAC at a $10B valuation. // All this + more below!
Quick Takes
DOJ investigates Visa’s debit card practices. After scuttling Visa’s attempted purchase of Plaid in late 2020, the Department of Justice’s antitrust division is investigating the card processing giant again – this time over allegations that the network “has limited merchants’ ability to route debit-card transactions over card networks that are often less expensive.” Debit card processing is a “core part” of Visa’s business, and scrutiny of Visa’s network fees (“invisible to consumers, lucrative for card companies, but a weight on merchants”) could lead to significant commercial and reputational problems for the company.
Stripe raises $600M, joins enneaconpentacorn club. (🦄x95) The payments giant raised $600 million in new funding, bringing its valuation to a mind-boggling $95 billion. The firm is now “more valuable than any bank in the euro zone.” Stripe plans to use the new capital to expand its European operations as well as its “global payments and treasury network.”
Morgan Stanley to offer some clients access to bitcoin funds. The investment bank released an internal memo to its financial advisors that it is “launching access to three funds that enable ownership of bitcoin” for its wealthier clients who have an “aggressive risk tolerance” and over $2 million assets held by Morgan Stanley.
Visa partners with Crypto.com. The payments giant and the payment and crypto platform announced a global partnership that includes principal membership in Visa’s network in Australia, meaning that Crypto.com will be able to directly issue the Crypto.com Visa Card in Australia and scale to new markets.
Flutterwave and PayPal team up on African merchant payments. The collaboration will allow ~377M global PayPal customers to pay African merchants registered with Flutterwave using the “Pay with PayPal” feature. The integration looks to overcome a highly fragmented payment infrastructure on the continent, and will be available in 50 African countries.
Revolut pulls out of Canada. The British neobank is closing its Canadian operations, 18 months after launching a beta of its platform in the country. Analysts have cited the difficulty newcomers face getting a banking licence in the country, especially those who pose a threat to local fintechs.
Opera hires PayPal vet to lead fintech strategy. The web browser group is hiring Allen Hu, who previously worked at PayPal, Tencent, and Sequoia, to run Dify, its recently-launched in-browser cashback service. Dify, which also offers current accounts and virtual debit cards is a key piece of the company’s “huge commitment” to fintech (expected to reach $100M over the next few years).
Bitcoin ATMs are proliferating around the US. As of January 2021, there are now over 28,000 active “bitcoin ATMs” in the United States, with about 10,000 coming online since last summer. The ATMs rarely allow cash withdrawals, but rather allow customers to deposit cash in exchange for a digital currency. Fees at the machines vary, but typically range from 6% to 20% of a total transaction.
Pop Flies
Digital bank Chime reportedly is preparing for a stock market listing at a valuation of over $30 billion.
Plaid reportedly is in talks to raise $600 million in a new funding round that could value the platform at $10-$15 billion (a significant markup over the $5.3 billion price tag that was set before its acquisition by Visa was nixed last year).
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Australia’s Prudential Regulatory Authority will “impose stricter conditions” on bank license applicants, following the recent collapse and sale, respectively, of challenger banks Xinja and 86 4000.
The Commonwealth Bank of Australia unveiled a new Buy Now Pay Later offering.
BaaS platform Railsbank expanded into Australia, partnering with challenger bank Volt to offer “bank accounts, cards, and payment solutions to Australian consumers.”
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Investing and trading platform eToro announced that it plans to go public via SPAC in a deal that could value the company at $10 billion.
Robinhood acquired recruiting firm Binc to expand its recruiting capabilities and launched the Robinhood Cash Rewards program the day eligible Americans started receiving the latest round of stimulus checks.
More Fundings!
Wealth management
Austrian “neobroker” Bitpanda raised $170M at a $1.2B valuation to expand its trading platform beyond crypto.
Stock trading app Gatsby raised $10 million in Series A funding to compete with Robinhood.
Investment platform Republic raised $36 million in Series A funding to democratize access to investing.
Banking
Canadian challenger bank KOHO raised $70 million in Series C funding.
Indian fintech CRED, which offers rewards for customers who use its platform to pay their credit card bills, is in talks to raise 200 million at a $2 billion valuation.
Mexican challenger bank Fondeadora added $14 million to its Series B.
Diem, the UK based fintech that provides a debit card and allows consumers to dispose of goods for eventual resale, raised $5.5 million in seed funding.
UK based merchant-acquirer Pollinate raised $50 million in Series C funding.
Payments
Zeller, the Australian fintech founded by Square alumni that is building a fully integrated payments and financial services solution designed for SMBs, announced that it raised $19.4 million in Series A funding last year.
British B2C cards payments company SumUp raised $895M in debt to power its international expansion.
Canadian payments-as-a-service company Brim raised $25 million in Series B funding.
Crypto
Fireblocks, the crypto infrastructure provider that provides digital asset custody services to institutional investors, raised $133 million in Series C funding.
Corporate
Payroll and HR platform provider Payfit raised $107 million in Series D funding.
Infrastructure
Digital identity verification company Socure raised $100 million in Series D funding at a $1.3 billion valuation.
Fintech-focused, low-code financial platform Genesis raised $45 million in Series B funding.