Hello Fintech Friends,

I couldn't be more excited to announce our second fund, The Fintech Fund II! (By our third fund, I promise I will think of a more clever name.)

We raised our first fund two years ago after passing 10,000 subscribers. Over the last two years, we've been lucky enough to back a great group of 40 companies, including Rainforest, Ansa, Themis, Griffin, TrueBiz, Navro, Stitch, Coast, Vault, Ampla, Zenpli, Minerva, LetsBit, and more. And we've now passed 100,000 weekly fintech subscribers and counting...

A lot has changed about fintech over those two years. Funding dropped over 50% YoY, many companies shut down, and and the days when one-in-five Y Combinator companies was a fintech feel like a long time ago. But tough markets make strong founders, and many fintechs have outperformed expectations since the market changed – from neobanks setting record profits to payment processors hitting record volumes to mega-acquisitions like Visa's purchase of Pismo or Marqeta's purchase of our portfolio co Power.

And we are still early. Fintech only accounts for a 2% share of the $12.5 trillion in global financial services revenue. There are still big problems to solve, big companies to build, and big adventures to go on.

Over the last two years, I've had the pleasure of connecting with smart, creative fintech founders in places from Kampala to London to Bogotá to here in New York. Fintech has become a global industry, and companies like Nubank and GoTo and Kaspi and Tinkoff show the opportunity to build venture-scale companies in emerging markets.

I feel very fortunate to welcome back returning LPs like Bain Capital Ventures and to welcome new ones like Foundation Capital, MoneyForward, the investment arm of Emigrant Bank, an Asian sovereign wealth fund, and founders like Shamir Karkal of Simple Bank and Sila, Huey Lin of Affirm, Arash Ferdowsi of Dropbox, Michael Giles of Embed, and Faisal Memon of iOL.

In our Fund II, we'll invest primarily in three categories:

1. Payments provision / transaction orchestration
2. Data aggregators and financial services APIs
3. Financial software products

🦄 We're looking to back around 20 great companies out of Fund II, investing at the pre-seed and seed stage – and we've already started! I'm excited to share our first four portfolio companies in Fund II:

• Confido is a software company that provides financial operations automation and retail data aggregation for consumer brands.
• Decoda Health is an autonomous medical coding and billing solution that can manage scheduling, follow-ups, payments, and more – just like a healthcare provider's staff would.
• Radar automates payments safely and securely for some of the largest brands processing payments in LatAm – including Airbnb, Deel, GitHub, and Fiverr – with over $330 million processed.
• TransFi provides low-cost, low-friction money movement onto and off of crypto exchanges using 100+ local payment methods in 40+ countries around the world (and 140+ countries covered via cards).

There are too many people to thank, all of whom have been instrumental in the fund's success so far.

I'm fortunate to have had great mentors, supporters, and peers who've shared the same foxholes as me over the past two years. I'll find an opportunity to name and thank a few specific supporters soon, but I want to say: thank you for being with me on the journey. And whether we've known each other for years or you just subscribed yesterday, thank you for being here!

And it goes without saying:

If you're just starting out on your journey building the next world-changing fintech, let's talk!

- Nik

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💼 Fintech Job of the Week

Payment processor Rainforest* is hiring a Solutions Engineer.

💬 Quote of the Week

The “Growth at any cost” strategy is out, as investors renew their focus on profitability– or as Jake Gibson calls it, the “F*uck around and find out” strategy." - Sophie Vo for TWIF Signals

🏦 Financial Services & Banking

🚀 Product Launches

Card network Visa launched Subscription Manager, a service for financial institutions to provide cardholders with a convenient way to track their subscriptions and manage them in one place.

JP Morgan Chase is rolling out its wealth planning tools to more customers after passing the milestone of 1 million personalized wealth plans.

The Monetary Authority of Singapore is launching a digital platform for financial institutions to share customer information in order to tackle money laundering.

📰 Other News

Chase Bank received approval to join companies like Best Buy and Uber in letting advertisers leverage consumer transaction data to target more effective ads via its new Chase Media Solutions unit.

HSBC entered into a strategic partnership with the government of Hong Kong to promote more bank-fintech collaboration in the city.

One third of EU banks do not currently offer instant payments and do not believe that they can enable them in time for the January 2025 deadline.

The CFPB will investigate consumer credit card rewards programs, after receiving increased complaints about concealed terms and conditions.

Royal Bank of Canada is struggling to go green while also financing oil projects.

One of UK building society Nationwide's new ads was banned for incorrectly suggesting that the firm has not been closing branches.

💻 Fintech

🚀 Product Launches

PayPal announced that it is rolling out a new service to allow its users to send cross-border currency transactions, free of transaction fees, to 160 countries using its PYUSD stablecoin. Blockchain payments provider Ripple also announced this week that it is launching its own dollar-denominated stablecoin to facilitate transactions, and may explore international non-dollar denominated stablecoins as well.

OpenYield, a registered broker-dealer and "equity-like maketplace" for bond trading, launched and printed its first trade.

Prime brokerage platform Clear Street launched professional clearing services for registered market makers in listed US equities and options.

Irish wealth-building app Neverless officially launched last week in a guerilla marketing campaign with money trees:

📰 Other News

🔥ClearBank, a British firm which provides clearing and settlement for banks and financial services, announced that it doubled deposits last year to £6.1 billion, passed £18 million in annual profit (its first), and is evaluating an expansion into the US and Europe.

Amazon will replace its 'just walk out' cashierless payment recognition tech in many stores with a smart grocery cart system.

Revolut received its own authorized banking license to operate in Mexico. Meanwhile, Colombian e-commerce and payments platform Rappi plans to invest over $110 million in its Mexican growth this year.

Small business lender Funding Circle* (disclosure: where I worked) received approval in the US to join the SBA's $35 billion 7(a) loan guarantee program.

Mastercard scaled its tokenized online checkout experience to Australia in order to tackle online payment fraud in ecommerce there.

🤝 Partnership Corner

Checkout payments provider Skipify announced a new partnership with Visa.

TrueBiz*, a specialist in automated merchant risk assessment, partnered with global KYC / AML solutions provider Moody's to streamline how financial institutions verify the businesses they are onboarding with a more efficient and secure experience.

African open banking-based payments provider Mono partnered with Mastercard to provide payments solutions for Nigerian businesses.

Open banking provider Trustly partnered with Cross River Bank to enable real-time payment processing for merchants via FedNow.

👎 The Bad News

Banking-as-a-service partner banks Piermont and Sutton Bank were both hit with enforcement actions, leading both to scale back their BaaS partner programs.

Point-of-sale system provider Lightspeed announced a reorganization and cost reduction initiatives.

The former CEO of closed Turkish cryptocurrency exchange Thodex started a jail sentence after being found guilty of defrauding investors.

Come meet us in-person at thisweekinfintech.com/events