Fintech Update, 7/11 - 7/17
Hi! It’s Monday, July 18, 2022.
The Rundown
Crypto lending company Celsius filed for bankruptcy, only a month after suspending withdrawals due to "extreme market conditions" and five weeks after publishing a blog post called "Damn the Torpedoes, Full Speed Ahead.” (The firm, unsurprisingly, has been called out for issuing misleading – or at least dangerously mixed – messages.) The firm joins fellow crypto lender Voyager on the bankruptcy pile, and maintains company with fellow embattled competitors like BlockFi and Vauld, both of which made their own negative news stories in recent weeks. Brutally, but not shockingly, for Celsius customers, the company still will not allow withdrawals: according to a new set of FAQs on the firm’s website, Celsius expects to develop “a plan that restores activity across the platform,” but there is no associated timeline for this goal.
Payments giant Stripe approved a 28% devaluation of its share price to “about $29, compared with $40 in the most previous internal valuation.” The company’s internal share value (known as a 409A valuation) is determined at least annually by an independent review to estimate a private company’s fair market value. It is different from the valuation made by a company’s investors, which is typically tied to the firm’s previous funding round. Stripe did not comment on the reduction, but the Wall Street Journal notes that private companies may reduce their 409A valuations “to help with retention and recruiting,” as Instacart did earlier in the year ostensibly to offer employees “more potential upside with their options.”
The founders of Three Arrows Capital, a bankrupt crypto hedge fund, have gone missing as creditors look to recoup their assets. Lawyers representing the investors say the whereabouts of founders Zhu Su and Kyle Davies, whose firm managed nearly $10B in crypto assets as recently as March, are “currently unknown.” An advisor facilitating the bankruptcy process said in a sworn statement that there is a “real risk” that 3AC’s assets would disappear, especially given they are made up of readily-transferable crypto, NFTs, and cash.
Financial data sharing platform Plaid added support for leading crypto exchanges, allowing firms like Binance.US and Gemini to “bridge data portability gaps between Web3 and mainstream digital finance” by “securely shar[ing] their crypto account information, such as asset types, balances and transactions, with other services” through the Plaid network.
On the seventh anniversary of its founding, UK-based challenger bank Revolut announced it now has over 20 million retail customers globally, with users generating over 250 million transactions per month. The company’s largest customer base is still in the UK, where they have 4.2 million users, but the company is now in 36 countries and planning for continued expansion.
Circle’s detailed, though unaudited, reserve report showed that its USDC stablecoin is backed entirely by short-term Treasurys and cash. USDC is the second largest stablecoin by market cap, behind only Tether (whose reserve reporting leaves a lot to be desired).
BNPL players Zip and Sezzle terminated their merger agreement. Zip is also exploring an exit from its British operations a little more than a year after they launched.
Selected fundings
Uprise, the financial planning tool for Gen Z, raised $1.4 million in pre-seed funding.
Pulley, the cap table management platform for founders, employees, and investors, raised $40 million in a Series B funding round led by Founders Fund.
Low-code fintech infrastructure provider Quiltt raised $4 million seed funding.
Stori, the Mexican fintech offering credit products to the underserved, raised $50 million in equity funding at a $1.2 billion valuation. 🦄
Indian credit card provider OneCard raised $100 million in new funding at a $1.4 billion valuation. 🦄