Fintech Update, 7/20 - 7/26
Hi! It's Monday, July 27, 2020.
Did you know that on this day in 1866, the trans-Atlantic cable, an undersea cable running under the Atlantic Ocean used for telegraph communications, was successfully laid and put into operation.
Leading Off
The OCC affirmed that national banks may provide custodian services for cryptocurrency tokens. // Ant Group announced its plans to go public through a dual-listing on the Shanghai and Hong Kong stock markets at a target valuation of $200B. // Meanwhile, Brazil’s central bank did a 180 on WhatsApp payments; Robinhood announced an indefinite delay of its UK launch; Affirm announced a partnership with Shopify to enable buy-now-pay-later for Shop Pay purchases; and Hippo raised $150M at a valuation of $1.5B, making it the latest fintech unicorn (🦄).
Heavy Hitters
OCC approves national banks to provide cryptocurrency custody services. The U.S. Office of the Comptroller of the Currency (OCC), under the leadership of acting Comptroller Brian Brooks, formerly the chief legal officer at crypto exchange Coinbase, issued an interpretive letter asserting the agency’s position that “custody services for cryptocurrency . . . [are] a permissible form of a traditional banking activity that national banks are authorized to perform” [full text], provided they properly manage risks and comply with applicable regulations. As the OCC notes, in most cases, providing such services “would essentially provide safekeeping for the cryptographic key that allows for control and transfer of the customer’s cryptocurrency.” The OCC’s letter gives national banks the legal certainty that crypto custody activities are acceptable for them, and may lead to an explosion of new bank services aimed at investors with significant exposure to Bitcoin and other cryptocurrencies.
Ant Group plans IPO in Shanghai and Hong Kong. The Chinese technology, financial services, and payments giant, already boasting a private valuation near $150 billion, announced that it is in the process of listing concurrently on the Hong Kong and Shanghai stock exchanges, seeking a valuation of $200 billion. The public listing will enable Ant to “accelerate its goal of digitizing the service industry in China,” drive domestic demands, invest in new technologies, and expand globally. The world’s most valuable tech unicorn’s decision to snub the NYSE in favor of the Hong Kong Stock Exchange (HKEX) and the Shanghai Stock Exchange (SSE) should serve to boost the status of the two as capital market centers.
Quick Takes
Brazil changes its mind on WhatsApp payments. The country’s central bank will authorize WhatsApp to send money and make payments via chats, provided the Facebook product adheres to all rules and regulations. The decision is welcome news for the company after its much-hyped launch of WhatsApp payments in Brazil was swiftly halted by the central bank in June.
Robinhood cancels UK launch. The popular, fee-free stock trading and investment management app halted its plans to launch in the UK, which had been in the works since 2018. Citing that “a lot changed in the world over the past several months,” the firm said it will instead focus its efforts on strengthening its U.S. business. Robinhood recently raised a $600 million Series F round at a $8.6 billion valuation.
Independent panel to review UK fintech sector. The British government announced that an independent panel, the Fintech Strategic Review, will conduct a review of the country’s fintech sector to “ensure UK fintech has the resources to grow and succeed . . . [and] establish priority areas for industry, policy makers, and regulators to explore.”
Policybazaar targets a $3.5B IPO. The India-based, SoftBank-backed online insurance platform is investigating an initial public offering in 2021, targeting a valuation of $3.5 billion. Policybazaar would be the first of India’s unicorns, which include Paytm, Ola, and Flipkart, to go public.
Hippo raises $150M (🦄). Meanwhile, another insurtech startup joined the unicorn club, as Palo Alto-based Hippo raised $150 million at a $1.5 billion valuation. Hippo uses technology to evaluate homes prior to move-in and monitors changes to the homeowner’s property over time.
Affirm partners with Shopify. The alternative credit firm inked a deal with the online retail platform to provide its “buy now, pay later financing solution . . . to eligible Shopify merchants in the U.S. who want to offer this flexible payment option to their customers.”
Kabbage launches checking accounts for small businesses. The online lender announced that it will begin offering small business checking accounts aimed at companies with fewer than 20 employees, making it the latest fintech startup to expand the breadth of its banking services offerings.
Pop Flies
Roll Call looks at how the NYDFShas bolstered its fintech leadership role amid the pandemic.
Smart money management app Plum raised $10M in funding as it gears up for European expansion.
Scalable Capital raised $58M at a $460M valuation in a Series D financing round to grow its robo-investment platform.
Memo came out of stealth and announced $10M in seed funding to launch its social finance app.
eBay is now using Adyen for managed payments after its agreement with PayPal officially expired.