Fintech Update, 6/7 - 6/13
Hi! It’s Monday, June 14, 2021.
Leading Off
The Basel Committee on Banking Supervision (BCBS) proposed stringent requirements for financial institutions holding crypto assets; the Bank of England said that stablecoins, if widely adopted, should be regulated like bank payments; and Visa and Goldman partnered to allow the investment bank’s commercial clients to use the payment network to make cross-border transfers. // In other news, Dave is SPACing and Nubank, Klarna, and Trulioo brought in new massive rounds of funding ($750 million, $630 million, $394 million respectively). // All this + more below!
Heavy Hitters
BCBS proposes regulatory requirements for banks holding crypto. The Basel Committee on Banking Supervision produced a white paper on the prudential treatment of crypto exposures at banks, proposing that cryptocurrencies be placed in its highest risk category. The proposal splits crypto assets into two categories: (1) tokenized traditional assets and stablecoins that meet certain classification conditions like an “effective stabilization mechanism” and thus fall under the existing Basel Framework; and (2) Bitcoin and other cryptocurrencies, which do not fulfill such requirements and should therefore be subject to new, more conservative prudential treatment. The BCBS went further, stating that the second category (cryptocurrencies) should be subject to a risk weight of 1250%, effectively suggesting that banks would need to hold $1 in capital for each dollar of exposure to crypto assets. The BCBS called out the potential for money laundering, reputational issues, and wide swings in valuation as reasons why the increasing popularity of crypto assets, has “the potential to raise financial stability concerns and increase risks faced by banks.” The proposal, which is still subject to open comment, threatens the increasing adoption of crypto custody services by major financial institutions.
Source: BCBS white paper
Quick Takes
BoE says stablecoins should be regulated like bank payments. The Bank of England stated that stablecoins should be regulated like payments handled by banks if they see widespread adoption. If stablecoins were to be held to the same standards as “commercial bank money” (deposits), the BoE would require stablecoin issuers to offer deposit insurance and meet capital and liquidity rules.
Visa and Goldman Sachs partner. Visa announced a partnership with Goldman Sachs in which Goldman’s commercial and corporate banking clients will be able to use Visa’s networks to make cross-border payments and move money globally.
Dave joins the SPAC party. The popular U.S. challenger bank backed by Mark Cuban announced that it will merge with a blank-check entity backed by Victory Park Capital, to take Dave public later this year. The expected valuation for the firm is $4 billion.
Stripe expands its tax capabilities with new feature. The global payments giant launched its Stripe Tax product, which will allow users to access “automatic, updated sales tax calculations (covering sales tax, VAT and GST) and related accounting services . . . in some 30 countries and across the U.S.” This is Stripe’s second recent tax-related feature, after acquiring “sales tax specialist TaxJar” in April.
Nubank raises $750M. The Brazilian challenger bank announced a $750 million extension to its $400 million Series G round, led by Berkshire Hathaway, pushing its valuation above $30 billion. Since January, Nubank’s customer base has grown from 34 million to 40 million users.
Klarna raises $639M. The Swedish BNPL giant raised $639 million in a funding round led by Softbank’s Vision Fund 2 at a $45.6 billion valuation, making it the highest valued private European fintech. The new valuation is a “47.3% increase over Klarna’s post-money valuation of $31 billion in early March and a 330% increase over its $10.6 billion valuation last September.”
Pop Flies
Facebook Messenger users can now use QR codes to allow for faster P2P payments within the app, a feature already popular in other apps like Venmo.
Goldman Sachs provided a $300 million credit facility to real-estate firm Fundrise.
401k provider ForUsAll announced a partnership with Coinbase that will allow “workers in plans it administers to invest up to 5% of their 401(k) contributions in bitcoin, ether, litecoin, and others.”
French startup Lydia added savings accounts to its growing portfolio of products – which includes P2P payments, debit card, account aggregation, and donations – via partnership with Cashbee.
More Fundings!
Wealth management
Financial wellness platform Credit Sesame raised $51 million in growth funding.
Lending
BNPL provider for subprime consumers Kafene raised $14 million in Series A funding.
Digital underwriting platform for commercial real estate Blooma raised a $15 million Series A funding round led by Canapi Ventures.
New York-based Clair, which offers free “earned wage advances” to workers as an alternative to payday loans, raised $15 million led by Thrive Capital.
Crypto
Crypto lender BlockFi is in talks to raise “several hundred million dollars at a valuation near $5 billion.”
French startup Ledger raised $380 million in Series C funding, at a valuation of $1.5 billion, to expand its product line of crypto-asset hardware wallets. 🦄
Corporate
Fixed-term fund platform TreasurySpring raised $10 million in Series A funding.
Now raised $9.5 million in Series A funding to “provide small businesses a quicker method for getting invoices paid.”
Indian wage access solution provider Refyne raised $16 million in Series A funding.
Briq, a financial management provider for construction companies, raised $30 million in Series B funding led by Tiger Global.
Infrastructure
Identity verification Trulioo raised $394 million in a new funding round led by TCV at a $1.75 billion valuation. 🦄
Indonesian micro, small and medium enterprise and service provider BukuWarung raised $60 million in Series A funding.