Fintech Update, 5/6 - 5/14

May 15, 2023

Hi! It’s Monday, May 15th, 2023.

Tether’s latest reserve attestation raises new questions about its stability, while simultaneously (and incongruously) showing surprising growth. The stablecoin’s market cap rose to $81.8 billion, up nearly $15 billion since last quarter, as crypto investors continue to pump cash into the coin amid bank failures and despite regulatory crackdowns on crypto. The strangest part? Tether has not fixed what got it in trouble in the first place: far from actually being pegged 1:1 to the Dollar, only ~76% of assets are backed by US Treasuries, with precious metals, bitcoin, and loans rounding out the reserves.

Mastercard launched Open Banking for Account Opening to help banks and fintechs conduct real-time customer verification for digital wallets. The tool combines account ownership verification and network-based identity insights into a single API, while also pre-filling routing and account information to minimize errors during user onboarding.

British neobank Revolut had a no good, very bad week: the company’s CFO left “for personal reasons” (Revolut’s Board may have a different take); and it was revealed for the first time that one-time UK CEO, James Radford, left in March. The Radford story is particularly strange – the former head of Revolut’s UK operation reportedly texted an angry customer that he would be waiting for him “in the garden with my shotgun” before resigning. Revolut has faced a protracted UK regulatory license approval process (it first applied 28 months ago) and continues to face questions from regulators about its culture.

Capchase, the fintech that provides non-dilutive capital for recurring revenue businesses, launched Capchase Pay, a BNPL product that “enables SaaS companies to collect the full contract value for their software while also providing their customers with flexible payment terms.”
Card issuing platform Marqeta announced that it plans to cut its workforce by 15% (about 150 employees).

Binance followed other crypto exchanges and pulled out of Canada as the country tightens regulation governing crypto trading platforms.

Better Tomorrow Ventures is launching a three-month fintech accelerator, The Mint, based in San Francisco, which will make $500,000 investments in 6-10 startups in exchange for 10% equity in those companies. [Disclosure: One of us, JC, is an investor at BTV and involved in The Mint.]

Kristen Anderson wrote a touching piece on founder identity and self-worth based on her experience shutting down payroll and benefits startup Catch.

Petal, the credit card company that helps people build credit and spend responsibly, announced that it raised $35 million in new funding and will spin off Prism Data, its cash flow underwriting technology.
Salsa, which offers a payroll API that can be embedded into vertical software platforms, raised $10 million in a funding round led by Greycroft, Better Tomorrow Ventures, and Definition.
Charlie, which offers simple and transparent financial solutions for retirees, raised $7.5 million in a funding round led by Better Tomorrow Ventures.