Fintech Update, 9/27 - 10/3
Hi! It’s Monday, October 4, 2021.
Leading Off
Affirm announced its aspirations to become the latest “super app” with the launch of Debit+, a new cash back pilot, and crypto capabilities. Google gave up on its plans to offer bank accounts directly to users. Mastercard launched a program that will allow consumers to pay for online and in-store purchases through equal and interest-free installments in the US, UK, and Australia. // In other news, Upgrade launched a BNPL product, Square announced a partnership with Tiktok, and Starling is launching its own BaaS product to expand into Europe. // All this + more below!
Quick Takes
Affirm announces plans for super app. During an investor forum, Affirm announced its plans to gain the highly coveted “super-app” status by introducing a series of features that will broaden its platform beyond buy-now pay-later capabilities. CEO Max Levchin stated that the waitlist for Affirm’s Debit+ product, a debit card with built in BNPL functionality, has grown to nearly 1 million, and that the company is piloting a cash back program and rolling out a crypto product that will let users buy and sell digital assets in their Affirm savings account.
Google gives up on checking accounts. According to the Wall Street Journal, Google has pulled the plug on its much-anticipated Plex checking account. Despite working on the initiative for years, penning partnerships with financial institutions (including Citi) and building up a waiting list of hundreds of thousands, a spokesperson said that Google scrapped its plans to focus on “delivering digital enablement for banks and other financial services providers rather than us serving as the provider of these services.”
Mastercard launches an installment loan program. Mastercard entered the BNPL arena and launched Installments, a point of sale payments program for online and instore purchases in the UK, Australia and the U.S. Installments will enable members to offer a variety of flexible installment options to consumers - including a zero percent interest, pay-in-four model. Mastercard is reportedly working with Barclays US, Fifth Third, FIS, Galileo, Huntington, Marqeta, SoFi, and Synchrony in the US, and with Qantas Loyalty and Latitude in Australia on the program.
Upgrade launches BNPL product. The online lender is planning to launch a buy now, pay later-style product that will let users pay off their debt in four months, without accruing any interest. However, Upgrade’s product will be offered in a different manner operationally from the traditional BNPL providers - “instead of adding a checkout option on merchants’ websites, Upgrade will lump a user’s card purchases together and invoice them what they owe over a four-month period.”
Square partners with Tiktok. Dorsey’s fintech arm and the social media giant announced Square x Tiktok, whereby merchants will be able to send customers directly to their online stores from videos, advertisements or shopping tabs. Additionally, TikTok for Business users will be able to set up a free, fully integrated Square Online store, according to the release.
Pop Flies
Daffy, a fintech company that allows users to choose how much money to set aside for charity every year, watch it grow tax-free, and can donate to charities in the U.S, emerged from stealth.
AngelList launched AngelList Stack, a suite of products that will help founders start, operate and maintain ownership over their companies.
Coinbase is launching a direct deposit feature that will allow customers to deposit a portion of their paycheck into Coinbase.
Starling is planning to launch banking as a service to expand into Europe.
Rakuten is planning to list its online banking unit.
Selected Fundings
Wealth Management
Digital wealth manager Betterment raised $160 million in growth funding, consisting of a $60 million Series F equity round and a $100 million credit facility, at a valuation of $1.3 billion.
Lending
Ofbusiness, the Indian tech-enabled platform that facilitates credit for SMEs, raised $207 million in a Series F funding round led by Tiger at a $3 billion valuation.
Banking
Singapore-based neobank Aspire raised $158 million in Series B funding, $58 million in equity and $100 million in debt.
Payments
Mexican B2b payments platform Higos raised $23 million in a Series A funding round led by Accel.
Card issuing as a service provider Highnote emerged from stealth and announced it has raised $54 million across its seed and Series A funding rounds.
London-based money transfer provider TransferGo raised $50 million in Series C funding.
Corporate
Vareto, the company aiming to help startups with financial planning and analysis, emerged from stealth and announced it has raised $24 million across it seed and Series A funding rounds.
EquityBee, the company that provides capital to startup employees so they can purchase stock options, raised $55 million in Series B funding.
Infrastructure
Identity verification platform Alloy raised $100 million im Series C funding at a $1.35 billion valuation
French embedded banking service provider Swan raised $18.7 million in a Series A funding round led by Accel.
Insurtech
Hedvig, the neo-insurer focused on providing property, travel, contents and accident insurance options for millennial consumers, raised $45 million in Series B funding.