Fintech Update, 3/8 - 3/14
Hi! It’s Monday, March 15, 2021.
Leading Off
SoFi took matters into its own hands in its pursuit of a national bank charter, announcing plans to acquire Golden Pacific Bancorp, N.A., for $22M. // In other news, the CFTC is investigating Binance for allegedly allowing American users to purchase derivatives in violation of U.S. rules; a group of large, global fintech firms established a new fintech trade association; PayPal announced it will launch a BNPL product in Australia; Flywire filed paperwork to go public at a target valuation of $3B; and Starling Bank and Flutterwave both joined the Unicorn club with their latest funding rounds. // All this + more below!
Heavy Hitters
SoFi buys a bank, takes its future in its own hands. The lending and financial management firm announced plans to purchase Sacramento-based community bank Golden Pacific Bancorp for $22 million, opening a new avenue in its effort to establish a national bank subsidiary. SoFi had previously applied to the Office of the Comptroller of the Currency (OCC) to establish a national bank subsidiary, which was granted preliminary approval in October, but the firm’s acquisition signals clear intent to speed up the national bank charter timeline. While Golden Pacitifc Bank is too small to suit SoFi’s needs at the moment – it has only three branches and about $150 million in assets – SoFi reportedly plans to pour about “$750 million of its own capital to get the bank ready for a rapid . . . expansion” to serve the needs of its acquirer’s large, national customer base. When the acquisition closes in late 2021, the bank will be renamed and subsumed into SoFi’s new banking division, SoFi Bank, N.A.
Quick Takes
The CFTC is investigating Binance. The Commodity Futures Trading Commission (CFTC) is reviewing whether the world’s largest cryptocurrency exchange improperly allowed Americans to trade derivatives in violation of U.S. rules. While Binance’s independent U.S. subsidiary Binance.us is registered with the CFTC and certain state regulators, the parent company is not – and must block U.S. users from its service.
JPMorgan launches ‘crypto exposure basket’. The global bank will offer a new investment product that includes the stocks of a variety of crypto-focused companies, including MicroStrategy, Square, and Riot Blockchain. JPMorgan has stressed that its “basket” does not provide direct exposure to crypto, but rather firms that stand to benefit from the continued rise of the asset class.
Chase shutters its digital wallet. About a year after terminating its Chase Pay app, J.P. Morgan Chase formally shut down its digital wallet of the same name, ending support for Chase Pay as a means of payment on retailer websites and apps. The bank noted that is is “incorporating the [Chase Pay app’s] most popular features directly into the Chase mobile app and Chase.com.”
Fintech leaders form a trade group. Founded by a group of well known, global fintech firms, including Afterpay, Plaid, Wise, and Betterment, the Financial Technology Association was created to “support the modernization of financial regulation.” The group launched with the concurrent publication of a white paper titled “Shaping the Future of Finance.”
Ant Group’s CEO resigned. CEO Simon Hu announced his departure from Ant as the Chinese fintech giant continues to go through broad internal shakeups amid heightened scrutiny from the government in the wake of former Chairman Jack Ma’s critical comments and subsequently canceled IPO in the fall.
PayPal to launch BNPL offering in Australia. PayPal announced that it will offer its BNPL financing option in Australia, specifically its interest-free “Pay in 4” product, starting in June. PayPal’s GM of Payments at PayPal Australia cited that an inundation of requests to do so from Australian merchants helped drive the decision to expand.
Pop Flies
The Economist explores whether Jack Dorsey should combine Twitter and Square into a super-app.
Challenger bank N26 partnered with Dosh on a rewards program that allows customers to earn cash back on everyday transactions.
Payment processing firm Flywire filed to go public in a deal that could value the firm at $3 billion.
Plaid and Codat announced a partnership to help streamline the loan underwriting process for SMEs.
Chinese e-commerce platform JD.com is considering withdrawing its fintech unit’s proposed IPO on the Shanghai stock exchange.
According to a TechCrunch analysis of a recent CB Insights report, fintech funding rounds over $100 million are at an all-time high.
Fundings!
Wealth management
Robo advisor M1 Finance raised $75 million in Series D funding, only months after raising a $45 million Series C round.
Farmland investing platform AcreTrader raised $12 million in Series A funding.
Sports trading card platform Alt raised $31 million in new funding.
Banking
U.K. challenger bank Starling Bank raised $376 million in Series D funding at a valuation over $1 billion. 🦄
Cheese, the digital bank aimed at serving the Asian-American community, raised $3.6 million in seed funding.
Payments
African payments firm Flutterwave raised $170 million in Series C funding at a valuation over $1 billion. 🦄
Cedar, a payments platform for hospital patients, raised $200 million in a new funding round led by Tiger Global.
Crypto
Crypto platform BlockFi raised $350 million in a Series D funding co led by Bain Capital Ventures at a $3 billion valuation. 🦄🦄🦄
NYDIG, provider of Bitcoin-related technology and investment services, raised $200 million in growth capital funding.
Cryptocurrency trading platform FalconX raised $50 million from new investors, including Tiger Global.
Digital asset custodian Komainu raised $25 million in Series A funding.
Corporate
Payroll process simplifier for TV, film and commercial productions Wrapbook raised $27 million in a Series A funding round led by a16z.
Pipe, which provides SaaS companies that have recurring revenues a source of funding outside of equity or venture debt, raised $50 million.
Small business payment and accounting platform Autobooks raised a $25 million Series B.
FP&A platform Cube raised $10 million in Series A funding.