Fintech Update, 3/22 - 3/28
Hi! It’s Monday, March 29, 2021.
Leading Off
Dear Readers, we’re taking off next week, but we’ll be back on April 12. Happy Passover and Happy Easter to everyone celebrating, and we hope you all have a happy and restful week ahead. - Team TFU
Robinhood confidentially filed for an IPO and is reportedly looking to allow its own users to invest at the same time as Wall Street. // Meanwhile, Revolut filed for a bank charter in California; the NYDFS found no evidence of gender-related fair lending violations in its Apple Card probe; Plaid’s FinRise accelerator announced its inaugural cohort of fintech startups; Jay Powell said that the Fed will move cautiously on a CBDC; and Elon Musk is now letting people buy Teslas with Bitcoin. // All this + more below!
Heavy Hitters
Robinhood to IPO, announces new product to let users buy in. The free brokerage app, riding the wave of an incredibly topsy-turvy year in which its valuation has skyrocketed despite being involved in several negative news stories and having a starring role in the debate over so-called meme stocks, filed a draft registration to go public via IPO. By filing confidentially, Robinhood is not disclosing the price of the offering, which is expected to be in the $20 billion range, or the exact timing (Robinhood paused its earlier IPO plans in January amid the GameStop frenzy). However, not content to stop there, the company also reportedly is building a new product intended to “democratize” IPOs by allowing users to purchase shares of IPO’ing companies, investments that are typically limited to institutional investors. Robinhood reportedly plans to test the new product with its own offering, carving out shares of its IPO that will be available to its 13 million users, before looking to expand into other companies’ IPOs. (This move would require Robinhood to negotiate with those companies and their brokers, as well as gain the requisite regulatory approvals – all of which may be tough to do.) Leave it to Robinhood to challenge the Wall Street status quo at the same time as it gears up to participate in one of Wall Street’s most insidery activities – and to boost its own value in the process. Take a bow, RH.
Quick Takes
NYDFS issues findings in Apple Card gender discrimination probe. The New York Department of Financial Services (NYDFS) concluded its investigation of Apple’s credit card and its underwriter, Goldman Sachs, finding no evidence of fair lending violations on the basis of gender. The investigation considered “approximately 400,000 New York State applicants for the Apple Card” following claims that female applicants for the Apple Card received lower credit limits and more denials than men. [Full report]
Revolut applies for US bank charter. The British challenger bank started the process of applying for a banking license in the U.S., applying for a state charter in California. If approved by the state’s financial regulator and the FDIC, a California bank charter would allow Revolut to increase the scope of its offerings – particularly in lending and savings – in all 50 states. Revolut also applied for a banking license in the U.K. in January.
Greenwood raises $40M Series A. The digital banking platform, created to improve financial access and opportunities for Black and Latino individuals and business owners, raised $40 million from “six of the seven largest U.S. banks” and Visa and Mastercard. “The net worth of a typical white family is nearly ten times greater than that of a Black family and eight times greater than that of a Latino family. This wealth gap is a curable injustice," said Greenwood’s Chairman and Co-founder, Ryan Glover.
Plaid accelerator announces first cohort of fintech startups. FinRise, the firm’s equity and capital-free accelerator program, has selected five early stage startups out of 100 applications for its inaugural cohort. The accelerator is explicitly focused on backing underrepresented founders in the fintech space.
Powell calls crypto “speculative,” says Fed won’t move quickly on CBDC. Federal Reserve Chair Jay Powell said that he considers cryptocurrency “a speculative asset” more like gold than a currency, not as a store of value. He also noted that the Fed has not started the sort of public engagement needed for a digital dollar, and will “move with great care and transparency.”
We poured out a martini this weekend for the legend Jessica Walter. RIP.
Pop Flies
British digital payments company Wirex halted onboarding new clients in the U.K. after the Financial Conduct Authority ordered it to “strengthen its anti-money laundering controls.”
Tesla is now taking payment in Bitcoin. CEO Elon Musk said that BTC payments will not be converted to fiat currency, instead adding to Tesla’s growing Bitcoin holdings.
Now this looks like the time to screen /
The greatest thing that we’ve yet seen /
On that new fad called NFTs /
(Non-Fungible Tokens, if you please)
Fundings!
Wealth management
Real estate investment firm Pacaso, founded by former Zillow executives, grabbed “$75 million in growth funding at a $1 billion valuation” despite only launching last year. 🦄
British digital stockbroker Freetraderaised $69 million in Series B funding at a $366 million valuation.
Lending
Indian lending platform KreditBee raised $70 million in additional Series C funding, addition to its recent $75 million round.
British P2P lender Zopa raised a fresh “£20 million from existing investors after picking up £250 million in deposits following the launch of its app-only bank last year.”
Payments
Cross-border business payments firm Airwallex added $100 million more to its open Series D round, increasing the firm’s valuation to $2.6 billion.
Crypto
Crypto wallet and exchange firm Blockchain.com raised $300 million in Series C funding, only weeks after announcing its $120 million Series B, bringing it up to a $5.2B valuation.
Corporate
After seeing 600% YOY revenue growth, digital notary service Notarize raised $130 million in Series D funding led by Canapi Ventures, valuing the firm at $760 million.
Infrastructure
AI-enabled financial fraud detection tool Feedzai raised a $200 million Series D round, led by KKR, at a valuation of over $1 billion. 🦄
Digital identity verification platform Jumio closed a $150 million round of funding.
Identity and corporate verification firm Middesk raised a $16 million Series A led by Sequoia and joined by Accel and Y Combinator. It has now raised $20 million total.
London-based Meniga, which builds tech to “[bridge] the gap between a bank’s legacy tech infrastructure and a modern API,” raised €10 million in new funding.
Insurtech
DC-based small business workers’ compensation insurance startup Pie Insurance closed a $118 million Series C funding round.