Fintech Update, 6/3 - 6/9

Jun 10, 2024

Hi! It’s Monday, June 10, 2024

Plaid launched a new credit reporting tool that leverages the mountain of consumer financial data coursing through its system to share insights with lenders. The company’s Consumer Report product “uses its connectivity capabilities to give lenders access to up to 24 months of bank account data, including categorized inflows, outflows and balance trends,” enabling lenders to “underwrite credit products for consumers overlooked by more traditional rating systems.” This kind of service has been a favorite wedge of fintech companies for years, but Plaid’s new offering demonstrates the kind of advantage that a large infrastructure player may have in enabling such offerings, given the large amount of data is already available to it. "We're seeing interest from large banks . . . large auto lenders, and . . . companies that are making decisions at the point of sale," said Plaid’s credit lead, Jonathan Gurwitz.

Capital One announced a new partnership with payments giants Stripe and Adyen called Direct Data Share, a “free product aimed at fraud reduction.” The collaboration relies on open source API tools that allow “merchants or anyone in the payment stack to send real-time transaction data,” allowing Capital One to behave like a “data clearinghouse, identifying fraud across all of their rails.” “If we see an IP address through Stripe that turns out to be fraudulent, we can now use that same IP address to prevent fraud for transactions happening at Adyen, and vice versa,” described Capital One’s head of fraud strategy, Jon Borman.

Robinhood agreed to acquire global crypto exchange platform Bitstamp for $200 million in an all cash deal. The acquisition will allow Robinhood to further expand its crypto business across geographies (Bitstamp holds over 50 active licenses and registrations in the EU, UK, and Asia) and products, including institutional lending and staking.

AI-enabled mortgage startup LoanSnap is teetering on the brink, facing several lawsuits from creditors and eviction from its headquarters. The company has raised nearly $100 million since its founding in 2017 from a variety of high-profile investors including Richard Branson and Reid Hoffman, LoanSnap says. LoanSnap reportedly missed payroll between December to January, has dwindled to less than 50 employees from 100, and owes over $2 million to creditors.

Monzo achieved its first full year of profitability, reporting a pretax profit of $19.6 million for its 2024 fiscal year (compared with a £116.3 million loss the previous year). Revenues more than doubled to £880M from 2023, due largely to the growth of Monzo’s lending product and the rising interest rate environment in the UK.

Shopify acquired Checkout Blocks, “allowing Shopify Plus merchants to make no-code customizations in their checkout to enhance customer experience and potentially boost sales.”

Cross-border B2B payments firm Nium raised $50 million in Series E funding at a $1.4 billion valuation.
Fizz, the debit card that helps college students build credit, raised $14.4 million in a seed round led by Kleiner Perkins.
Spend management platform Torpago raised $10M in Series B funding co-led by EJF Ventures and Priority Tech Ventures – a pretty small Series B by today’s standards.