Hello Fintech Friends,

New centralized and decentralized exchanges are on a fundraising tear at the moment, as a perceived gap in the market opens up to win trading business from incumbents. This week alone, Cube Exchange – a new type of hybrid on/off-chain exchange – raised funding from our friends at 6th Man Ventures, Portal raised from Coinbase, and DeFi exchanges BBO and Bitflow Labs both raised pre-seeds.

Elsewhere, I wrote for our Signals edition this week on why similar ideas keep cropping up in fintech:

Signals: Why is there so much idea recycling in fintech?

Once or twice a quarter, for the last half-decade, I’ve opened my inbox to the same email: “I’d like you to invest in my new app, a financial advisor that will put people’s money on autopilot.” This email has come from 50 or so different people, working

This Week in FintechNik Milanović

I'm a big believer in the Peter Drucker quote "You can't improve what you don't measure."

Though we don't set explicit targets, at The Fintech Fund we try to find and back founders from a variety of backgrounds and perspectives.

I was encouraged to see from our EOY '23 portfolio survey that 17% of our founders are women (vs. an average of 3% of VC dollars to all-female founding teams and 10% to teams with one female founder). There is always room to improve, but the trendlines are moving in the right direction.

Please find another week of fintech financing events below. (PS: Have feedback for us? 👍👎 Let us know!)

Want to sponsor a newsletter? See our sponsorship information here.

If you’re an early-stage startup founder raising equity or debt, we may be able to help - come check out our fund, The Fintech Fund (including a link to pitch us). Are you a fintech angel investor? Come join our syndicate.

📖 Read of the Week

I enjoyed this Juniper Square interview with a16z's David Haber, formerly the founder of Bond Street, on the continued opportunity for fintech. This line in particular resonated:

"Large financial institutions are increasingly aware that many of the technologies they’ll need going forward needn’t be built in-house. Instead, they can be addressed more quickly by third-party firms. So that’s an exciting opportunity for startups.”

I have been convinced for a while that bank-fintech partnerships will dominate the next phase of fintech. It's why we've invested in Themis, TrueBiz, Minerva, Unit, and other similar companies, and the topic of a recent whitepaper we wrote with Visa:

📊 Stat of the Week

Pitchbook published its Q1 Analyst Note on fintech, with a few interesting findings, including that, "Fintech investors generated $34.6 billion across 2,055 deals in 2023, a -43.8% and -32.4% YoY decline, respectively. Valuations also mostly declined, with the median of, $19.4 million, down -13% from 2022’s median."

💸 Venture Financing

• Rise Growth Partners, which conducts enterprise readiness assessments of RIAs, raised $250 million.
• DataSnipper, a startup that automates critical tasks for accountants and auditors, raised $100 million at a $1 billion valuation.
• Metronome, a platform that allows software companies to provide ussage-based billing and pricing, raised a $43 million Series B.
• Portal, a decentralized exchange for trading bitcoins, raised $34 million from strategic investor Coinbase.
• Incognia, a startup that uses location mapping to detect financial fraud, raised a $31 million Series B.
• Integral, a currency technology provider to the financial markets, raised $30 million in growth funding.
• LoanStar, an embedded lending provider for for banks and credit unions to reach new customers at the point of sale, raised $28 million (the company was profitable in 2022 and breakeven last year).
• Benepass, a provider of flexible benefits packages to employees, raised $20 million.
• Cube.Exchange, a crypto exchange which provides off-chain order matching and on-chain settlement, raised a $12 million Series A at a $100 million valuation.
• Marstone, a provider of investment and wealth management tools to community banks and credit unions, raised an $8 million Series B.
• ProcurePro, an Australian contruction finance and procurement startup, raised a $6.2 million Series A to expand to the UK.
• Leal, a Colombian company that enables banks and brands to offer cashback and rewards products, raised a $5 million pre-Series B.
• Mesh Payments*, a provider of Plaid-for-crypto money transfer services, raised $5 million from PayPal.
• Coris, a merchant risk detection network, raised a $3.7 million seed round.
• Finvest, an app to allow consumers to invest in US treasury bills (below), raised $2.7 million.
• Attune, formerly known as Lendsmart, a provider of engagement banking tools, raised a $2.2 million seed.
• BBO Exchange, a decentralized derivates exchange, raised $2.7 million in pre-seed funding.
• Bitflow Labs, a decentralized crypto exchange, raised $1.3 million in pre-seed funding.
• Teamshares, a startup that buys businesess to reallocate ownership to employees, plans to raise $100 million this year followed by an IPO.

💵 Debt Financing

• Sunbit, a US-based buy-now-pay-later provider for technology purposes, secured a $310 million debt facility led by Citigroup.

Early findings from the world's largets UBI study, in Kenya:

• UBI improved agency and income: “Overall there is no evidence of UBI promoting ‘laziness,’ but evidence of substantial effects on occupational choice… impacts on total household income are also positive and significant.”
• Cash transfers increased savings: “The effect on both household and enterprise savings are positive and mostly significant… The amount the households have in rotating savings and credit associations (ROSCAs) also goes up significantly…”
• Cash did not change hours worked, but recipients shifted to self-employment: “Treated households are not working less… there is significant reduction in hours of wage work, all of which comes from work in agriculture, and a slightly larger increase in hours of non-agricultural self-employed work, so there is no net effect on total household labor supply.”

Early findings from the world’s largest UBI study | GiveDirectly

Money always helps, but for the poorest, one large lump sum can last a long time. A long-term universal basic income also looks promising.

GiveDirectlyGiveDirectly

☯️ Exits

💻 IPOs & SPACs

• Private equity-owned Indian home loan provider Aadhar Housing Finance is targeting a domestic $600 million IPO at a valuation of up to $3 billion.

🤝 M&A - Fintech

• Ramp, the venture-backed corporate card and expense management platform, acquired Venue, which simplifies the procurement process for businesses by enabling employees to request what they need while providing finance teams with visibility into all requests.
• Enterprise payments provider Blackhawk Network announced that it will acquire Tango Card, a software startup that helps companies offer digital gift cards and rewards to customers.
• German software conglomerate GFT Technologies, a provider of banking, cloud, and insurance tech, acquired Sophos, a Colombian core banking specialist.
• Opyn, an Italian lending-as-a-service platform, is looking for M&A opportunities to help it scale across the EU and UK.

🏦 M&A - Bank and FinServ

• Barclays is now talking to private equity firms about taking a majority stake in its UK merchant payments business, after its approach to strategics didn't yield a buyer.

🌎 Fintech Around the World

Why one giant regional bank no longer wants to be a regional bank

European fintech aims to provide hassle-free crypto-to-cash conversions

📚 Deeper Reads & Features

Could CBDCs help prevent fraud?

What are you Bilt-ing over there?

The Fintech Journey Continues - What to watch for in 2024

Affinity Marketing and the Latino American Fintech Opportunity

Cowboy Ventures Sector Quarterlies - Opportunities we are exploring in Fintech in 2024

Venmo, Zelle and Cash App leave users vulnerable to fraud, according to the Manhattan DA

The Future of On Demand Pay and Earned Wage Access

How to Secure SoftPOS Mobile Apps to Comply with PCI MPoC

Meet the puppies competing in the 2024 Great American Rescue Bowl

Have a news item for us? Reach out to news@thisweekinfintech.com