All The Fintech — Sept 25th, 2017
Happy Monday everyone and welcome to my second issue to all the new subscribers (which in this case, is pretty much everyone other than my significant other)! As a general reminder, I’m still working on tweaking the format and content of my newsletter so any and all feedback is super helpful, give me a tweet.
Currently, I’ve structured it over a few main topics : Top News (IMO), Crypto, Lending, Payments, Wealth Management, Insurance, and Fundraising. My goal is to have a few of the most relevant and interesting articles across each section, but I also have my own biases on sources I read. If anyone has any great recommendations on other go to newsletters or sources, please tweet them over to me (particularly insurance). This week’s newsletter is also a bit fundraising heavy (at least, compared to last week, but maybe this is normal?).
In the future, I’m planning on using this section to pontificate on things I come across working with all the fintechs. This week, I was planning on writing a quick post on Venmo’s (newish) debit card that I got recently, but I got a bit carried away with editing some photos tonight, so instead I’ll save that for next week and leave you with my favorite photo I took in Japan earlier this year.
Top news IMO💯
Lending startup Prosper has lost more than 70 percent of its value — Recode
The online lending startup Prosper said on Friday that it had raised $50 million in new funding…was last valued by private investors as worth $1.9 billion; now the company is valued at $550 million
Brand in lending is increasingly becoming more and more important.
CFPB Says in Memo It Could Have Pursued $10 Billion Penalty Vs. Wells Fargo — WSJ
A consumer regulator calculated it could have pursued a $10 billion penalty against Wells Fargo & Co. over its sales practices scandal before settling on a much smaller fine, according to government documents released by House Republicans on Tuesday.
Wells Fargo in the cross hairs and opening up a world of hurt with regulators.
For weeks, Equifax customer service has been directing victims to a fake phishing site — The Verge
Because the process involves sharing sensitive information, consumers have to trust they’re entering their data in the right place, which can be tricky because the breach-recovery site itself isn’t part of equifax.com. If users end up on the wrong site, they could end up leaking the data they’re already concerned was stolen
Every time I think Equifax couldn’t have handled it worse…they do.
Cryptocurrency 🤑
A relatively stable week for crypto this week it seems.
The Blockchain Is the Internet of Money — WSJ
Silicon Valley visionary Balaji Srinivasan explains how bitcoin works and why he regards it as revolutionary. “With the blockchain, everything that was scarce now becomes programmable. That means cash, commodities, currencies, stocks, bonds — everything in finance is going to be transformed, and aspects of finance baked into everything else.”
Every BigCo innovation lab — Repeat after me: blockchain, not bitcoin. Blockchain, not bitcoin.
In China’s Hinterlands, Workers Mine Bitcoin for a Digital Fortune — The New York Times
Here, in what is locally called the Dalad Economic Development Zone, lies one of the biggest Bitcoin farms in the world. These eight factory buildings with blue-tin roofs account for nearly one-twentieth of the world’s daily production of the cryptocurrency.
Interesting that China is currently shutting down exchanges, yet still provides cheap electricity to miners — suggests that they’re up to a different strategy than just banning bitcoin?
Safeguarding against phone porting — The Coinbase Blog
Our top priority at Coinbase is the safety of customer funds. Over the last few months, we have made a number of enhancements to the Coinbase platform to protect customers against phone porting…
Coinbase putting that funding to work against phone porting.
Lending 🤝
SoFi still reeling and Activehours raising. I wonder what effect SoFi’s lawsuits and press will have on the business itself, especially if branding is increasingly more important in lending…
Scandal costs Sofi chance to become a bank, says ex-SEC head — Financial Times (paywalled)
SoFi’s application to become a bank has almost no chance of approval in the wake of a sex scandal that forced out its chief executive, says a close adviser and former chairman of the Securities and Exchange Commission.
Culture (or at least keeping an exec team intact) is important to regulators.
SoFi Condoned ‘Rampant Sexual Activity,’ Lawsuit Alleges — Bloomberg
Zamora’s is one of at least three lawsuits filed in recent months against SoFi, which last week replaced co-founder and Chief Executive Officer Mike Cagney amid allegations that he sexually harassed female employees
More lawsuits for SoFi.
Activehours raises $39 million for its new take on cash advances — TechCrunch
Nine months after raising $22 million for its unique take on the cash-advance business, Activehours has gone back to the venture capital well and pulled out another $39 million in financing. Led by Andreessen Horowitz, with participation from the company’s early-stage investors Matrix Partners, Ribbit Capital, and March Capital Partners, Activehours has managed to now raise nearly $65 million since its launch in 2013.
As @dbkhan tweeted, it’s really more income smoothing than a cash advance…but tomaytos tomahtos.
Payments 💳
Does FinTech mean Finance Companies < Tech Companies, or Finance = Tech Companies, or Finance + Tech Companies = :D. Banks seems to think Square might the first, while JPMorgan seems to be taking the later approach with Bill.com. (Not my best, I know).
The story behind Square’s bank charter application — American Banker
The payments processor Square has big plans in banking — but even after filing an application to charter an industrial loan company, it still doesn’t see itself as a competitor to most financial institutions…though the application has already stirred opposition from community bankers, Square’s aim remains helping small businesses that are generally not receiving credit from traditional financial institutions.
“Square isn’t competing with banks!” — says Square to banks.
Ant Financial to try again for U.S. approval of MoneyGram deal — Reuters
Chinese payments company Ant Financial is planning to resubmit its application for U.S. review of its deal to buy MoneyGram International Inc (MGI.O) for $1.2 billion, a source familiar with the matter said on Friday.
Third time’s the charm hopefully.
Apple Pay Cash Coming in Future Update to iOS 11 and watchOS 4 — Mac Rumors
Apple today confirmed that Apple Pay Cash will be released as part of a future update to iOS 11 and watchOS 4. Coming this fall…
What will come first, the iPhone X or Apple Pay Cash?
JPMorgan Seeks to Banish Paper Payments With a Fintech Venture — Bloomberg
The bank is working with Bill.com, the largest U.S. business-to-business payments network, to enable customers to send and receive electronic payments and invoices…will pilot the service in early 2018 and plans to offer it to more business and commercial clients later in that year.
Bill.com chugging along.
Wealth Management 💰
Moar data please and Ellevest (closes?) their Series A technically.
Selling data to feed hedge fund computers is one of the hottest areas of finance right now — Quartz
One of the hottest areas of finance these days is quantitative investing, which uses artificial intelligence to sift through massive troves of data to identify signals that humans can’t see.
Ellevest is using its new funding round to add human advisors
Ellevest, the digital investment startup led by Sallie Krawcheck, has a fresh round of funding from Rethink Impact, PSP Growth and Salesforce Ventures
Apparently it’s a Series A and last year’s $10MM was a Seed round. Robots < the human touch for some clients, people still like things to be explained by an “expert” (techcrunch)
Insurance 🔒
Looking for more recommendations on good sources to read! My knowledge of insurance is pretty rudimentary…
Zebra Online Insurance Agency Gets $40M from Investors and New CEO from Kayak
The Zebra, an online auto insurance comparison marketplace, plans to use $40 million in new venture funding to double down on brand building, product expansion, etc.
Fundraising 💵
Ellevest, a New York-based digital investment platform focused on women, raised $34.6 million in funding. Rethink Impact led the round, and was joined by investors including PSP Growth, Salesforce Ventures, CreditEase Fintech Investment Fund, LH Holdings and SK Impact Fund, LLC. Existing investors Morningstar, Khosla Ventures, Mellody Hobson, Ulu Ventures, Contour Venture Partners, and Astia Angels participated. (link)
Raise, a gift card marketplace, raises $60M Series C led by Accel with participation from PayPal and others; the firm provides a platform for users to buy and sell unwanted gift cards; raised more than $147M to date (link)
London-based fintech startup GoCardless (YC S11) raises $22.5M Series D led by Accel with participation from Balderton Capital and others; the firm provides enterprise tools for recurring bank-to-bank transfers (aka direct debits); raised $47.3M to date (link)
YayPay, a San Francisco-based provider of corporate finance workflow optimization solutions, has raised $5.3 million in VC funding from QED Investors, Birchmere, Fifth Third Capital, 500 Fintech Fund, Aspect Ventures, Gaingels, Techstars and Zelkova. (link)
AlphaFlow, a San Francisco-based automated alternative investment platform for real estate, raised $4.1 million in seed funding. Resolute Ventures and Point72 Ventures led the round, and were joined by investors including Upside Partnership, Social Capital, Y Combinator, Clocktower Technology Ventures, and Red Swan Ventures. (link)
The Zebra, an Austin, Texas-based auto insurance comparison marketplace, raised $40 million in Series B funding. Accel Partners led the round. (link)
EquitySim, a San Francisco-based platform for financial services hiring, has raised $3.1 million in Series A funding. University Ventures led the round, and was joined by Peak Ventures and 500 FinTech. (link)
Tuition.io, a Santa Monica, Calif.-based employer-funded student loan repayment assistance platform, has raised $7 million in Series B funding. Wildcat Venture Partners led the round, and was joined by return backers Mohr Davidow Ventures and MassMutual Ventures. (link)
Clearcover, a 1.5-year-old, Chicago-based car insurance startup, has raised $11.5 million in new funding led by Lightbank, with participation from Greycroft Partners, 500 Startups, and Silicon Valley Bank. (link)
ComparaOnline, a Chile-based insurance and financial products comparisons developer, raised $14 million in funding, according to TechCrunch. Investors include Bamboo Capital Partners and the International Finance Corp (link)
France-based peer-to-peer lending platform Younited Credit raises $47.8M Series F from Eurazeo, Crédit Mutuel Arkéa, and others; the service currently operates in France, Spain and Italy, and lets users arrange loans between $1.2k and $48k; raised more than $122M to date. (link)
HighRadius Corp, a Houston, Texas-based financial supply chain management software, raised $50 million in funding from Susquehanna Growth Equity (link)
Luno, a London-based Bitcoin platform, raised $9 million in Series B funding. Balderton Capital led the round, and was joined by investors including AlphaCode and Digital Currency Group. (link)
Power2SME, an online marketplace for small and medium enterprises engaged in manufacturing, has secured Series E funding of $36 million from existing investors Inventus Capital Partners, Accel, Kalaari Capital and Nandan Nilekani, with participation from its latest investor International Finance Corporation (IFC), the investing arm of the World Bank Group. (link)
Product Launches 🚀
Loftium: A Down Payment With a Catch — You Must Be an Airbnb Host
Yifan Zhang, a 29-year-old entrepreneur who often hears this lament among her friends, has come up with a service that tries to help. When she bought a townhouse in Seattle with her husband last summer, she knew that the spare bedroom could generate extra income on Airbnb.
Buying a home with Airbnb hosting as leverage (really additional income I guess).
IPOs & Exits 💸
China online insurer ZhongAn prices HK IPO at top end, raises $1.5 billion: IFR
ZhongAn Online Property & Casualty Insurance Co (6060.HK) priced its IPO at the top of an indicated range, raising $1.5 billion in Hong Kong’s biggest ever financial technology stock offering, IFR reported on Friday. China’s first internet-only insurer priced 199.
Also founded by Alibaba Group Holdings. SoftBank’s massive fund also participated by buying 5%. Big moves in FinTech across Asia…
Random 🔖
Sears’s History Predicts Almost Everything Amazon’s Doing — The Atlantic
Sears might seem like a zombie today, but it’s easy to forget how transformative the company was exactly 100 years ago, when it, too, was capitalizing on a mail-to-consumer business to establish a physical retail presence. To understand Amazon — its evolution, its strategy, and perhaps its future — look to Sears.
A reminder that technology always moves faster than we think.
How to make a logo, for free, in about 5 minutes.
After you read this, you should be able to throw together a logo without hiring a designer in about five minutes. You‘re not going to end up with the Nike Swoosh or Apple logo, but you will have enough to get going.
I should do this…
