Fintech Update, 8/16 - 8/22
Hi! It’s Monday, August 23, 2021.
Leading Off
PayPal said it will stop charging buy-now-pay-later late fees, citing increasing regulatory scrutiny of such products; Coinbase partnered with MUFG to enter the Japanese market; and Revolut launched a salary advance feature called PayDay. // In other news, Brex acquired Weav for $50M, neobank Kroo received a UK banking license, and Wise said it will allow US residents to trade its shares in September. // Plus, Plaid extended its Series D, Cred launched a P2P lending feature, and Novi’s chief David Marcus asked for a “fair shot.” // All this + more below!
Quick Takes
PayPal scraps BNPL late fees. . . The payments giant said it will stop charging late fees for missed payments on buy-now-pay-later purchases, amid growing competition and regulatory scrutiny in the global BNPL space. “Regulators across all geographies are taking notice," said PayPal’s head of BNPL, “and we think being as customer friendly as possible puts you in a better place with regulators."
. . . and partners with Fiserv. The new partnership will allow gig workers to have their paychecks deposited into their PayPal or Venmo accounts. The direct deposit capability gives consumers faster access to payouts, and PayPal access to a large source of potential deposits.
Coinbase enters Japan via MUFG partnership. The crypto exchange teamed up with Japan’s Mitsubishi UFJ Financial Group (MUFG) to launch a domestic Japanese exchange that will allow “account holders at the nation’s biggest bank to buy and sell virtual currencies.” MUFG will be a Coinbase “payment partner” in Japan and users will initially be able to transact Bitcoin, Ethereum, Litecoin, Bitcoin Cash and Stellar.
Revolut rolls out salary advance. The new feature, called PayDay, allows consumers unlock up to 50% of their wage early as an alternative to short-term credit. Revolut must integrate with employer payroll systems to act on wage information, but fees will only be charged to employees who use the service. PayDay is currently available only in the UK, with plans to expand to the EU and US over time.
Brex acquires Weav for $50M. Corporate card and expense management provider Brex acquired Weav, the commerce platform that allows companies to access their customers’ standardized transaction data in real time, for $50 million. The technology that Brex is acquiring will “help accelerate the fintech’s connectivity of its platform.“
Plaid extends Series D. After announcing a $425 million Series D round in April, Plaid has extended the funding round adding JP Morgan and AmEx Ventures as investors. CEO Zach Perret said that both companies “will be critical in our effort to enable great financial outcomes for consumers and drive innovation in the industry.”
Wise will open itself to US customers and investors. The London-based cross-border payments giant will launch an “American Depositary Receipt” program in September, enabling US residents to purchase and trade Wise shares for the first time. Wise ADRs will be available to US investors via “participating brokerage firms and platforms, under a ticker that will be announced” in the coming weeks.
Squire launches cards. The financial management and payments tool for barbershops announced the Squire Card, a debit card designed to “[bring] better financial tools to a profession that is underserved by traditional financial institutions.” Squire is offering its card through its partnership with BaaS provider Bond.
Kroo receives a UK banking licence. The UK-based neobank became only the second new bank authorized by the UK Financial Conduct Authority in 2021, albeit with limits that restrict the firm from accepting deposits over £50,000 in total. Kroo plans to launch its banking service in 2022 and claims it has grown to 5,000 prepaid cardholders and over 20,000 monthly transactions since debuting in 2019.
Cred launches peer to peer lending feature. Indian members-only credit card management and bill payments platform Cred, that rewards users for paying their credit card bills on time, launched a peer-to-peer lending feature that will allow users to “lend to one another at an interest rate of up to 9% annually.”
Pop Flies
In a new blog post [full text], Novi’s David Marcus called on international financial regulators to give the embattled digital currency a “fair shot” as it tries to gain footing in the global payments marketplace.
Robinhood released its Q2 earnings, announcing that its revenue more than doubled to $565 million due to a large surge in crypto trading.
The Economist looked at whether neobanks’ pandemic-related surge can result in profitability.
VC firm FinTech Collective raised $250 million in new capital “for its existing early-stage strategy and for its new strategy focused on decentralized finance (DeFi).” The new raise brings the firm’s “total assets under management to over $500 million.”
ESG focused digital bank Aspiration announced that it has agreed to go public via SPAC at a $2.3 billion valuation.
More Fundings!
Wealth management
Indian wealth management startup Smallcase raised $40 million in a Series C funding round, including participation from Amazon.
Lending
Rent-to-own real estate platform Divvy Homes raised $200 million in equity financing co-led by Tiger Global at a $2 billion valuation.
Banking
Middle class focused challenger bank One raised $40 million in Series B funding.
Crypto & Blockchain
Crypto trading platform Bitpanda raised $263 million in Series C funding at a $4.1 billion valuation, more than 3x its valuation when it raised its Series B in March.
Corporate
Flexible workforce payments platform Branch raised $48 million in Series D funding and closed a $500 million credit facility.
Infrastructure
Financial data infrastructure provider Pngme raised $15 million in Series A funding.
Brokerage infrastructure provider DriveWealth raised $450 million in a new funding round led by Insight Partners and Accel at a $2.85 billion valuation.
E-commerce infrastructure provider Nacelle raised $50 million in a Series B funding round led by Tiger.
Nuvemshop, the Latin American company that provides SMBs with tools to setup,manage, and promote this business, raised $500 million in a round co-led by Insight Partners and Tiger Global Management.