Fintech Update, 5/17 - 5/23
Hi! It’s Monday, May 24, 2021.
Quick note that we’ll be off next week, but we’ll be back in your inbox in June! Wishing you and your families a happy, barbecue-filled, and hopefully mask-free Memorial Day weekend :) - Team TFU
Leading Off
Jerome Powell spoke again about the possibility of a U.S. CBDC, promising that the Fed will produce a research paper for public comment; BTC, ETH, and other coins crashed, shaving 20% off the crypto market’s overall value; HSBC launched a new multi-currency account to compete with fintech players like Wise; and privacy.com rebranded as Lithic and announced new funding. Marcus has a new leader, Robinhood debuted its IPO investment product, and several new unicorns were born. All this + more below!
Quick Takes
Powell keeps flirting with CBDC. In a video message, Federal Reserve Chair Jerome Powell announced that the Federal Reserve will issue a research paper and seek public comment on “the development and issuance of central bank digital currencies, or CBDCs” [full transcript]. “We are committed . . . to hearing a wide range of voices on this important issue before making any decision,” Powell said.
It was a bad week for crypto. Bitcoin, Ethereum and several other leading cryptocurrencies suffered massive drops throughout the week, with the overall crypto market shrinking more than 20%. Some analysts attribute the sudden drop to Tesla CEO Elon Musk’s announcement that the company would no longer accept bitcoin for Tesla purchases, while others have taken a broader view that the crypto bubble has burst.
Fidelity launches teen accounts. The investment giant will issue debit cards and offer investing and savings accounts to users between the age of 13 and 17 whose parents or legal guardians are also Fidelity customers. These accounts will allow teens to buy and sell stocks, mutual funds, and ETFs with no account fees or commissions for online trading.
HSBC launches multi-currency digital wallet. The global bank debuted its new HSBC Global Wallet product to customers in the U.S., UK, and Singapore, allowing users to “send money in a number of currencies, and hold and manage those currencies,” in the same digital wallet. With the move, HSBC is aiming to stanch the flow of users taking their cross-border money movement business to fintech rivals like Wise, CurrencyCloud, and Revolut.
Privacy.com rebrands as Lithic, raises $43M. The virtual card-issuing platform, which launched in 2014, rebranded to Lithic and announced a $43M Series B raise to expand its B2B business (its consumer business remains Privacy.com). Lithic allows businesses to generate virtual, disposable payment card numbers for free.
Marcus and C2FO partner. Goldman Sachs’ retail banking brand is partnering with the working capital provider to provide eligible small and medium sized businesses with a new way to access unsecured financing.
Zilch is bigger than it used to be. The British buy-now-pay-later startup reportedly is planning to hire 100 new people as the BNPL space continues to heat up. Since launching in 2019, Zilch has raised over $120 million, including $80 million this past April, and is now planning for international expansion.
White Star Capital launches crypto fund. The VC firm raised $50 million for its Digital Asset Fund, which will “specialize in investing in crypto networks and blockchain-enabled businesses.” White Star plans to make investments between $500,000 - $3 million in 15-20 companies in North America and Europe.
Pop Flies
Marcus has a new lead executive, Uber’s Peeyush Nahar, amid departures from the Goldman consumer banking operation.
Revolut announced the launch of currency forward contracts in the UK that will enable companies of any size to set future exchange rates online.
Digital bank Current plans to integrate a decentralized finance platform into its core banking product.
Robinhood rolled out IPO Access, their new product that allows retail investors to buy shares of companies at their IPO price before they are traded on public exchanges.
Billing and payments network Paymentus is targeting a valuation of $2.43 billion for its upcoming IPO.
Fundings!
Wealth management
Pipe, a startup that lets companies convert annual recurring revenues into monthly ones by selling those contracts to investors on the Pipe platform, raised $250 million at a $2 billion valuation. 🦄🦄
Uncapped, a UK fintech which provides equity-free funding to tech companies, raised an $80M combined funding round of debt and equity to expand its banking services.
AI-powered financial data platform Vise, which helps level the playing field for independent financial advisors competing with larger advisory firms, raised $65 million in Series C funding led by Ribbit Capital at a $1 billion valuation. 🦄
Copper, the London-based cryptocurrency custody firm, raised $50 million in Series B funding.
German mobile-only and commission-free broker Trade Republic raised $900 million in a Series C funding round led by Sequoia.
Rally, the platform that allows retail investors to invest in collectibles and alternative assets, raised $30 million in Series B funding.
Lending
Settle, the fintech platform that provides working capital solutions for e-commerce and consumer packaged goods companies, raised $15 million in a Series A funding round led by Kleiner Perkins.
Banking
Amount, the company that helps banks and other financial institutions quickly go digital, raised $99 million in Series D funding at a valuation of over $1 billion, just five months after raising $86 million from in a Series C funding round led by Goldman Sachs at a valuation of $686 million.
Found, a startup that helps freelancers and independent contractors more effectively manage their businesses, launched with $12.5 million in funding led by Sequoia.
Payments
The cross-border payments fintech Wise raised a £160m capital facility from Silicon Valley Bank to refinance its existing line of credit.
Daily Pay, the fintech that provides on-demand payment solutions for enterprises raised $175 million in Series D funding and an additional $325 million of credit capital.
Crypto
Figure, the blockchain-based lender founded by former SoFi CEO Mike Cagney, raised a $200 million Series D funding round at a $3.2 billion valuation. 🦄🦄🦄
Infrastructure
London-based transaction monitoring platform ComplyAdvantage extended its Series C round to $70 million with a $20 million top-up from Goldman Sachs.