Brex reduces headcount. The FSB is recommending changes to current liquidity rules. Sunbit raises a round. Here's what we've been watching…. 👇
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What goes up must come down.
For spend management startup Brex, this was the case for its employee headcount.
While interest rates were low, the company saw a bump in business and VC money was easier to come by. Its headcount had swelled to about 1,300 before it laid off staff in October of 2022.
As things have come down to earth, Brex is attempting a reset, announcing recently that 282 employees, or nearly 20% of its staff, in a restructuring.
The move came after reports the company burned $17 million in cash each month during the fourth quarter and that it is trying to preserve runway.
The FSB is due to bring a report to the next G20 convention in October recommending changes to current liquidity rules.
These changes are a response to the collapse of Silicon Valley Bank (SVB) in 2023, which saw $42 billion of deposit outflows in just 10 hours.
The FSB are thought to believe the influence of social media played a significant part in the scale and escalation of the SVB run.
Why this matters: The Financial Stability Board is an international body that monitors and makes recommendations about the global financial system.
Its membership includes all G20 major economies. It cannot enforce regulation, but its recommendations can set the blueprint for each jurisdiction to follow.
Liquidity and capital requirements were raised around the world following the 2008 financial crisis. This extra buffer gives banks a cash buffer in the event of a run, which is highly unlikely but can be fatal if it happens.
The FSB are now thought to be considering the impact of social media to identify vulnerabilities in the current rules, and recommend changes.
What's next? The full report and any recommendations will not be presented until the next G20 in October, but expectations have now been set.
It is likely that any recommendations will involve raising liquidity requirements, to mitigate the impact of more recent factors such as social media, which was not a concern back in 2008.
Assuming countries heed the FSB’s advice, this could put a strain on smaller institutions, but there will also be a lengthy window to implement any changes.
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Ramp, a New York-based corporate finance automation startup valued by VCs at $5.8b, acquired procurement startup Venue, which was seeded by Sequoia Capital, Exponent Founders Capital, and Basecase Capital. More here ->
Barclays (LSE: BARC) is speaking with PE firms about buying a majority stake in its British merchant payments unit, after talks with strategics were unsuccessful, per Reuters. More here ->
Fosun International is considering a sale of its 10% stake in Ageas, Belgium's largest insurer, which is valued at nearly $800m, per Bloomberg. More here ->
Achmea, a Dutch insurer, reportedly is considering a sale of its life insurance unit, which could fetch around €3b. More here ->
FTX debtors are asking a bankruptcy court to approve a sale of Digital Custody, which FTX acquired in 2022 for $10m, for just $500k to CoinList. More here ->
FinZi, the Colombian fintech company, has been acquired by Girasol Payment Solution. More here ->
Nasdaq Private Market, a provider of liquidity solutions to private companies, raised $62.4m in Series B funding. Nasdaq led, and was joined by BNP Paribas, DRW VC, UBS, and Wells Fargo. It offers a range of services, including a trading marketplace, liquidity programs for employees, and data and analytics for informed trading decisions. More here ->
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More funding news:
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Mesh, an SF-based embedded finance solution for digital asset transfers and account aggregation, raised $6.5m led by PayPal Ventures. More here ->
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Wisedocs, a Toronto-based document processing platform for insurance claims, raised US$9.5 million in Series A funding led by Information Venture Partners, per Axios Pro. More here ->
Indemn, a New York-based provider of insurtech product configuration and underwriting solutions, raised $1.9m in pre-seed funding. More here ->
AVLA, a leading provider of surety and trade credit solutions, has successfully raised $25 million in funding. AVLA is recognized as one of theleading surety and trade credit insurance companiesin Latin America, with a presence in four countries in the region. More here ->
CarbonPool, founded by former Allianz executives, has successfully concluded a significant funding round aimed at revolutionising the carbon credit market. More here ->
Closinglock, a fintech and fraud prevention technology provider for the real estate industry, raised a $12M Series A. The company previous raised a $4M seed round led by LiveOak in August 2022. More here ->
From the Stash
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