Fintech Update, 9/18 - 9/24
Hi! It’s Monday, September 25th, 2023.
The Rundown
Jack’s back, for now. Jack Dorsey is returning to lead Square, with current CEO Alyssa Henry stepping down at the end of the month. Dorsey is currently chairperson and head of Block, Square’s parent company, and will add the role of “Square Head” to his remit. The company announced Henry’s departure in a regulatory filing on Monday, and did not give a reason for the 9-year veteran’s departure. The announcement comes two weeks after a major outage at Square left thousands of businesses across the country unable to accept payments for some 24 hours.
PayPal is making its stablecoin (PYUSD) available for use on Venmo, claiming the move will “reduce friction from everyday payments while improving speed and lowering costs.” Our take? The rollout won’t move the needle much. Firstly, it’s unclear whether the typical Venmo user is in such dire need of an instant payment method that they will fundamentally change how they interact with the app. Secondly, the feature is far from frictionless – though it’s free to transfer PYUSD between PayPal or Venmo accounts, blockchain network fees still apply when transferring to external wallets. Finally, it’s unlikely PayPal would introduce a feature it thought could cannibalize other business lines – Venmo generates a significant chunk of revenue from instant transfer fees and interest on cash balances. More likely, the announcement is a good way to prop up usage statistics after modest early adoption across other PayPal wallets.
Goldman is in advanced talks to sell its troubled fintech lender, Greensky. The deal is the latest move in Goldman’s retreat from retail operations, and is reportedly worth about $500M (a steep drop from the $1.7B Goldman paid in 2021). Goldman’s fintech division, Platform Solutions, has recently seen turmoil: firing executives in its transaction banking business (a subset Platform Solutions), receiving a warning by the Federal Reserve about risk and compliance oversight, and reportedly considering offloading its Apple card partnership to Amex. It may not remain a standalone division for much longer.
Lending, but make it SaaS. Code hidden in Affirm’s iPhone app indicates that the BNPL startup is exploring a subscription offering. The service, called Affirm Plus, would charge a monthly fee of $7.99 in exchange for 0% APR on installment loans up to $2,500.
Varo launched a new free, instant payments feature called “Varo for Everyone.” Money can be “sent, received, and stored from Varo Bank accounts insured up to $250,000” and the transfers “can be sent to anyone with a U.S. debit card, no matter where they bank.”
The Reading Nook
Silla Brush of Bloomberg explores why BlackRock, State Street, and other big-wig money managers are dissolving their ESG funds.
Selected fundings
Curve, the card consolidation platform, raised an additional £58 million extension of its Series C round, bringing the total Series C funding to ~£133 million.
Canadian wage-on-demand provider ZayZoon raised $34.5 million in Series B funding.
European carbon accounting company Plan A raised $27 million in a Series A funding round led by Lightspeed.
Digital asset startup Mesh (formerly Front Finance) raised $22 million in a Series A funding round led by Money Forward.
AI-powered accounting software provider for SMBs Truewind raised $3 million in a seed funding round led by Fin Capital and Y Combinator.