Fintech Update, 3/27 - 4/2
Hi! It’s Monday, April 3rd, 2023.
The Rundown
First Citizens announced that it plans to acquire Silicon Valley Bank, after the FDIC seized control of the bank in early March. The deal includes the “purchase of about $72 billion in loans, at a discount of $16.5 billion, and the transfer of all the bank’s deposits, worth $56 billion. Roughly $90 billion in Silicon Valley Bank’s securities and other assets were not included in the sale, and remained in the F.D.I.C.’s control.”
The Commodity Futures Trading Commission (CFTC) sued global crypto exchange Binance for illegally soliciting US users and violating several provisions of the Commodity Exchange Act. The CFTC alleges that Binance “did not take any steps to limit or restrict the ability of U.S. customers to trade on the platform” for the first two years of its operations. The lawsuit signals that multinational crypto companies should tread carefully in dealings with US consumers.
The Office of the Comptroller of the Currency (OCC) launched its new Office of Financial Technology (originally announced in October 2022), naming Prashant Bhardwaj to head the new office as a Deputy Comptroller and Chief Financial Technology Officer. The move reflects the regulator’s heightened focus on digital assets and fintech partnerships.
In long-awaited news, Apple launched Apple Pay Later, incorporating a native BNPL option directly into the Apple Pay interface. The feature enables users to split purchases valued between $50 to $1,000 into four zero-interest installments. Although Apple Pay Later was initially scheduled to be rolled out with iOS 16, technical complications delayed the launch. The CEOs of BNPL stalwarts Affirm and Klarna took a positive approach to their statements, commenting that Apple Pay Later is beneficial for consumers and the market is large enough to support multiple competitors.
The board of UK challenge bank Revolut is concerned with the company’s response to a critical audit report that warned that Revolut’s revenues “may be materially misstated”: Revolut had issued a public statement denying the BDO audit’s accuracy, but its board has removed the statement due to “inaccuracies” and a misunderstanding of the audit’s findings.
FTX founder Sam Bankman-Fried was charged with conspiring to bribe Chinese officials, bringing his total charge count to 13. The indictment claims that SBF gifted members of the Chinese government with $40M or more worth of cryptocurrencies to regain access to frozen accounts.
Bank of America reported that LifePlan, its digital personal financial tool, has over 10 million users and has “attracted more than $55 billion in new money since its launch in late 2020.”
Corporate card and expense management technology provider Ramp reported that it “saw revenue grow by 4x last year” due to “a desire on the part of companies of all sizes and stages seeking to save money by managing their spend better.”
The Reading Nook
At Fintech Meetup two weeks ago, the Fintech Update’s own JC Bahr-de Stefano moderated a panel on leveraging real-time data and cash flow forecasting to fuel the next decade of consumer finance. JC collected the key insights during the session and we’re excited to re-shared it here!
NY Magazine wrote about the meltdown of Daylight, the LGBTQ+ neobank, which included lawsuits, fabrications, and deeply inappropriate behavior.
Controversial stablecoin Tether is extending its lead in the space, as competitors like USDC and Binance’s stablecoin cede market share.
M13 published the thesis behind its fintech investment strategy, explaining how the sector has changed, noting key opportunities, and sharing their bets for the future of money.
Selected fundings
Hardware crypto wallet provider Ledger raised $108 million in a Series C extension.
P97, the Houston-based startup that “partners with fuel brands, gas station retailers, electric car charging companies, mobile wallet providers and connected car OS makers to make it easier to select and pay for your gas (or electric charge) either through an app or connected car” raised $40 million in an equity funding round led by Portage.
UK payments curation platform Paytrix raised $18.3 million in a Series A funding round led by Unusual Ventures, Motive Partners, and Bain Capital Ventures.
Pricing platform Orb raised $19.1 million in funding across a $14.1 million Series A funding round led by Menlo and a $5.1 million seed funding round led by Greylock.
Sustainability-as-a-service provider Spiral raised $28 million in a Series A funding round.
Austin-based credit-building platform StellarFi raised $15 million in Series A funding round.