Fintech Highlights - 4/4/2023
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Pinned to the Top
USD Coin has seen $10.5 billion in net outflows since the day before Silicon Valley Bank collapsed, according to archives of Circle’s website and analytics website usdc.cool. That represents a 24% drop in the stablecoin’s circulation since March 9. Today, circulation sits at roughly $32.8 billion, according to usdc.cool.
The outflow represents a big hit to Circle, the company that issues USDC, because it generates most of its revenue as interest income on the reserves it holds backing its stablecoins. So even though interest rates are rising, a smaller amount of outstanding USDC means less revenue. The outflow is also potentially bad news for Coinbase—Coinbase earns interest income on USDC that it holds as part of its partnership with Circle. The partnership allows Coinbase customers to convert USDC for US dollars on a one for one basis. The partnership generated $146 million in revenue in Q4 of 2022, or roughly 23% of the company’s revenue for the quarter.
Circle’s disclosure that it held around $3.3 billion in cash reserves at Silicon Valley Bank had caused USDC to drop below its $1 peg for about 48 hours starting March 10. Circle has also been trying to re-establish a payments network that allows heavyweight traders to mint and redeem USDC 24 hours a day and 7 days a week, a capability for which it relied on Silvergate Bank and Signature Bank.
Block responded to allegations of rampant fraud and inflated user numbers on Cash App raised last week by short seller Hindenburg Research, saying that most of its 51 million monthly active accounts were linked to people who had verified their identities.
In a document distributed to investors on Thursday, Block acknowledged that it allows customers to maintain multiple accounts, but argued that its approach for counting monthly active users was “more conservative” than measurements used by other companies. Block said it has 51 million monthly transacting active users, which is an account that completes at least one transaction on any of Cash App’s services that month.
Block said that approximately 44 million of those accounts were linked to users who had verified their identities on the platform. It also said those verified accounts were responsible for 97% of the funds coming into the app in December 2022. The identity verification process, which is required as customers use more of Cash App’s services or use them more frequently, includes verifying a user’s full name, date of birth, address and Social Security number. Hindenburg’s report cited former Block employees, claiming that more than 40% of Cash App accounts they reviewed were fake, involved in fraud, or were controlled by one individual with multiple accounts.
Investing.com agreed to acquire Michigan-based financial news site StreetInsider for more than $10m. More here ->
Ingenico, a French payment hardware provider owned by Apollo Global Management, acquired Phos, a Bulgarian provider of software that converts smartphones into payment terminals. Phos raised around $8m in VC funding from backers like CM.com. More here ->
Mastercard (NYSE: MA) and Visa (NYSE: V) are circling Brazilian banking and payments startup Pismo, which could top $1b, per Bloomberg. Pismo has raised over $100m from backers like Accel, Amazon and SoftBank. More here ->
TPG and billionaire Ajay Piramal are seeking to sell their combined 30% stake in Indian insurer Shriram General, which could have a $2b enterprise value, per Bloomberg. More here ->
Zenus Bank, a Puerto Rico-based digital bank, acquired Puerto Rican payments startup Financial Urban Exchange (dba FUEX Payments). More here ->
Family finance app Greenlight has unveiled an integration for banks and credit unions. Greenlight for Banks…lets financial institutions add Greenlight’s app to their financial service offerings…With the app, banks can offer customers Greenlight’s tools for earning, saving and spending. In addition, parents can automate allowances and send money instantly, while kids and teenagers get ‘hands-on money management experience with parental supervision,’” the company said. More here ->
StellarFi, an Austin, Texas-based bill pay tool, raised $15m in Series A funding. The funds will be used to grow the team and secure partnerships with key financial institutions in order to further expand StellarFi’s marketplace credit offering. More here ->
P97 Networks, a Houston-based mobile commerce and payments provider, raised $40m. The company has built a platform that "engages customers and bridge the gap between gas stations and convenience stores." More here ->
eToro has secured $250M at a $3.5B valuation after scrapping their SPAC. The company has alson announced that it is seeing slower growth - More here ->
Syndicated loan platform Versana raised $40 million from U.S. Bank, Deutsche Bank, Morgan Stanley and Wells Fargo — which are also the platform’s latest clients. The platform, which aggregates and normalizes data from member banks, launched in December with its first investors and clients, including Bank of America, Citi, Credit Suisse and JPMorgan. More here ->
SKUx, a St. Petersburg, Fla.-based payment and consumer engagement startup, raised $11m in Series A funding. SKUx offers a range of digital incentives to drive incremental spend to retailers, such as Apple Pay, SKUPay and Product-Based PaymentsTM. More here ->
Orb, an SF-based billing automation startup, raised $19.1m in Series A (led by and seed funding. The company offers a pricing platform that helps companies automate a range of different billing types — usage-based, subscriptions or a mix of both. More here ->
Stratyfy, a New York-based provider of machine learning solutions for lenders, raised $10m. Stratify enables organizations to collaboratively create operating budgets, monitor performance, and analyze their business in real time. More here ->
Spiral, an impact-as-a-service platform for financial institutions, raised $28m in Series A funding. helps clients easily embed sustainability, social impact, ESG, and CSR into their business. More here ->
Confluent co-founder Neha Narkhede today announced a new fintech company, Oscilar, that’s developing an ‘AI-driven’ platform to help financial institutions protect online transactions from fraud and theft. Oscilar is entirely self-funded, backed by $20 million that Narkhede and the company’s other co-founder, Sachin Kulkarni, themselves contributed. Narkhede says they opted not to take outside funding so that they could ‘quickly build and scale the company as it launches publicly.” More here ->
Paytrix, a London-based fintech platform for brands, raised $18.3m in Series A funding. The company is striving to solve the complex world of payments by offering a single platform — and single contract — that lets its customers manage all of the different payments options from payment acceptance to payouts, in one place. More here ->
Pacto, a POS payment solution for restaurants in Mexico, raised $4m. More here ->
Payday, a pan-African neobank, raised $3m in seed funding. Payday issues global (USD, EUR and GBP) accounts to Africans. More here ->
Raisin, a Berlin-based savings and investment startup, raised €60m in Series E funding. Using open banking, Raisin brings competitive savings rates for customers directly as well as through white-labelled integrations with third parties. More here ->
Thunes, a Singapore-based cross-border payments startup, raised $30m in Series C funding. Thunes was launched in 2019 after fintech firm TransferTo spun it off into a separate business covering cross-border payments. The B2B firm now supports 79 currencies and 300 payment methods, with clients like Uber, Grab, Deliveroo, and PayPal. More here ->
Agreena, a Denmark-based regenerative farming fintech, raised €46m in Series B funding led by HV Capital. More here ->
Ledger, a Paris-based crypto hardware wallet maker, raised €100m. Ledger’s main products are hardware crypto wallets that offer a high level of security. The company’s current devices are shaped like USB keys and feature a tiny screen to confirm transactions on the device. More here ->
If you think embedded insurance is the only hot thing in insurtech these days, we’ve got a surprise in store for you: While it’s true that startups that help sell insurance together with other products and services are enjoying tailwinds, there are plenty of other opportunities in the space, several investors told TechCrunch+. More here ->
Revolut is providing a smartphone based telematics offer to its 🇮🇪 customers and it is underwritten by AIG. More here ->
Koala, a Paris-based insurtech startup specialising in travel insurance technology, has successfully raised US$2.1 million in a recent funding round. More here ->
Sproutt, the life insurance company that modernises life insurance for agencies, agents, and their customers, has announced the launch of Sproutt SmartLife for Agencies. More here ->
Zumper doubles down on short-term rentals: the company has launched a dedicated vacation site, a new subscription service for flexible stays, and hits an inventory milestone. Zumper is a rental marketplace used by millions of renters to find houses, rooms, condos, or apartments for rent. It offers a digital rental application and credit report screening service powered by TransUnion™, and its inventory is updated in real-time. More here ->
Markerr, a New York-based analytics platform for institutional real estate owners, raised $6.6m in Series B funding. More here ->
From the Stash
Cross River Bank teams with Pay.com on payment platform - Cross River Bank is launching an encompassing payment platform called CrossPay alongside online payment company Pay.com to streamline several business payment functions. The $9.2 billion Ft. Lee, N.J.-based bank saw an opportunity to streamline processes through the CrossPay platform via Cross River’s core and suite of APIs. More here->
12 Insurtech Trends Leading Market Disruption in 2023
The insurtech space is changing rapidly - and incumbents and startups alike need to keep a watchful eye on the latest trends. More here ->
Anansi Partners with Wowcher: Embeds Digital Insurance into their Shipping Process - Anansi partners with Wowcher to embed digital goods-in-transit insurance into their shipping process. More here ->
Fintech startup Checkout.com is better known for its payment processing service, but the company is launching a new product - Customers can now create payment cards for their own customers. The company has been testing Checkout.com Issuing for a while, and millions of cards have already been created with the new service. Checkout.com supports physical cards as well as virtual cards that can be used multiple times or can be set to be disabled after the first payment.” More here ->
Payments and shopping service Klarna is the latest company to announce its integration with ChatGPT - The company said it is “one of the first brands to work with OpenAI to use its protocol to build an integrated Plugin for ChatGPT” and is rolling out a personalized shopping experience that provides product recommendations when Klarna users ask for shopping advice, inspiration and product links via Klarna’s search and compare tool.” More here ->
What is open banking? Speed and convenience are accelerating open banking adoption around the world. But what exactly is it?
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