Fintech Update, 6/14 - 6/20
Hi! It’s Monday, June 21, 2021.
Incredibly, this past week we celebrated the 5-year anniversary of The Fintech Update! Here’s our first post from way back in June 2016 – Zelle was still in beta (and still called ClearXchange), a former regulator being ‘optimistic’ about fintech counted as a hot take, and Bitcoin was trading at $635. Simpler times. It’s been exciting to see how fintech has entered the mainstream in the past several years, and we’re honored to be in your inbox each week to help assess what it all means. Thanks for your continued readership, and onward into the next five years! Best, Team TFU - Joe, JC & Kieran
Leading Off
The UK FCA published troubling statistics about retail investors’ growing interest in – and lack of understanding about – cryptocurrencies. // In other news, JPMorgan will acquire Nutmeg as it works to establish a retailing banking presence in the UK; Stripe announced a new identity verification product; Germany’s Raisin opened its doors in the US with its first partner bank; well known fintech bank partner Cross River launched a new VC unit; Wise plans to go public this year via direct listing; and China is continuing to crack down on crypto-mining operations in the country. // All this + more below!
Heavy Hitters
Troubling trends in crypto investing. According to new research from the UK Financial Conduct Authority:
78% of British adults have now heard of cryptocurrencies (and about 2.3 million own some, up from around 1.9 million in 2020); buuuuuut...
Their understanding of cryptocurrencies is declining (only 71% of those who had heard of crypto correctly identified its definition from a list of statements), and
They increasingly view it as non-risky (only 38% of crypto holders see their investment as a gamble, down from 47% in 2020).
Tl;dr: More people are buying into crypto despite generally having less understanding of what it is and less concern for the risks involved.
Quick Takes
JPMorgan to acquire Nutmeg. The global bank will purchase the British digital wealth manager for an undisclosed sum (about $1 billion, according to sources). The acquisition appears to dovetail with JPMorgan’s efforts to establish retail banking presence in the UK to compete with other challengers like Goldman Sachs’ Marcus brand or the growing stable of London-based neobanks (in January, the bank said it was planning to launch a UK-based digital bank). Nutmeg boasts over 140,000 customers and about $5 billion in assets under management.
Stripe launches identity verification product. The payments giant continued its recent shipping tear, announcing the launch of Stripe Identity, which will allow businesses to verify the identity of users in more than 30 countries in under 15 seconds. Customers will be able to integrate Stripe Identity by adding a few lines of code into a checkout workflow or by sending individuals a verification link, at which point the individual will upload a photo of their government ID and a live selfie for verification by Stripe.
Raisin launches in the US. The Berlin-based deposit marketplace officially went live to US customers, several months after announcing its partnership with Texas-based MapleMark Bank. Using Raisin's “Savings-as-a-Service software” now embedded in its online platform, MapleMark clients can “view ladder, liquidity, and market-linked term deposit products online” and create their own CDs.
Cross River launches VC arm. The bank behind many well known fintech firms launched Cross River Digital Ventures, a venture capital arm that will invest in companies “at the intersection of lending, payments, investing and fintech . . . [strategic] to both the Cross River ecosystem and the broader technology industry.”
Wise plans direct listing. The international money transfer service (formerly TransferWise), said it will go public via a direct listing on the London Stock Exchange later this year. Wise’s revenue grew from “$422 million to $586 million in its most recent financial year,” representing “$57 million in profit before tax.”
AmEx launches business bank accounts. Leaning on technology gained from its acquisition of Kabbage, the global cards network launched Kabbage Checking for small business checking. Kabbage Checking is a “no-fee digital account that pays 1.1% interest on up to $100,000 in balances.”
Visa launches “Tap To Phone” in US. The global payments giant released its mobile point of sale product in six US cities, promoting the service as a way to help small and medium-sized businesses recover from the pandemic. Visa’s Tap to Phone is already active in 30 other countries.
China’s crackdown on crypto-mining is spreading. The Chinese government has ordered the closure of 26 mining projects in Sichuan, the country’s second-biggest mining province, after announcing a crackdown on crypto-mining operations last month. China accounts for half of the world’s bitcoin production.
Pop Flies
Goldman is planning to offer Ethereum futures and options trading in the coming months, after offering such products for bitcoin earlier this year.
Billionaire investor Mark Cuban called for regulation to define “what a stablecoin is and what collateralization is acceptable” after his investment in the Iron Finance protocol collapsed.
Former PayPal execs launched crypto-based payments network Six Clovers to facilitate cross-border money transmission between global banks, merchants and payment providers via stablecoins.
UK-based social impact startup Novus is working with Visa and Railsbank on a financial services app that tracks users’ carbon footprint based on card spend and rewards “sustainable purchasing choices.”
In a devastating turn of events, a California judge threw out a lawsuit against Robinhood filed by actor Ice Cube, who claimed the firm used his image without permission to promote its “terrible” services.
The WSJ looked at how investors have bought into Stripe by acquiring stakes from existing shareholders, including current and former employees.
Fundings!
Wealth management
Wealth management platform Addepar raised $150 million in a Series F funding round led by D1 Capital Partners which gave the company a pre-money valuation of $2 billion.
Lending
Digital lending platform Splash raised $44.3 million in a Series B funding round with participation from Citi Ventures.
Debt capital management solution Finely raised $3 million in a Series A funding round led by Bain Capital Ventures.
Hello Alice, the platform that connects SMBs with capital services, raised $21 million in a Series A funding round led by QED.
Banking
FamPay, a neobank aimed at teenagers in India, raised $38 million in Series A funding.
Neobank for SMBs Novo raised $40.7 million in Series A funding.
Payments
Universal shopping app nate raised $38 million in Series A funding.
Brazilian cross-border payments firm Ebanx raised $430 million investment round.
Crypto
Crypto financer service provider Amber Group raised $100 million in Series B funding at a pre-money valuation of $1 billion.
Infrastructure
BaaS firm Unit raised a $51 million Series B round at a $255 million valuation, led by Accel, with participation from existing investors including BTV, Aleph, and Flourish.
UK digital banking platform 10x raised $187 million in new funding at a valuation of ~$700 million.