This Week in Fintech (12/27)

Hello Fintech Friends,

Happy holidays! Please enjoy a combined weekend edition of fintech and banking news below.

Quote of the week

“From 2004 to 2020, student-loan debt metastasized from $250 billion to $1.5 trillion, as the costs of higher education increased but wages in many fields didn’t rise to meet them. Also putting young people into arrears during the aughts: carnival barkers in the quad hawking Visa, Mastercard, and the like alongside free T‑shirts and pizza, until the federal government kicked credit-card companies off campus in 2009.”

Amanda Mull, Why Is There Financing for Everything Now?

Open Role Spotlight

Ziina, which is building the Venmo and Square of the Middle East, is hiring a software engineer.

Read of the week

Amanda Peyton of Braid pointed me to a pair of great reads on the concept of group financial services this week. The first, her piece On Multiplayer Fintech, discusses the need to built financial products that treat groups as the atomic unit (clubs, associations, roommates, etc.) The second, Squad Wealth, begins to explore the possibilities for growing wealth and income collaboratively, rather than individually. It will be interesting to see if this concept of social finance, which has existed for some time in the offline world in the form of lending circles or early insurance schemes, will open the door for new models of fintech.

Financial Services & Banking

Product Launches

Citi signed a deal with eight fintech startups and data aggregators to build a third-party fintech marketplace.

India’s Icici Bank released an online platform, similar to Stripe Atlas, to help companies incorporate in India. The National Payments Corporation of India introduced an offline contactless feature for mobile wallets.

Other News

Goldman Sachs is putting the finishing touches on its wealth management roboadvisor for mainstreet investors. (Their target market, millennials, are still relatively poor.) Safaricom, the Kenyan mobile money pioneer behind M-Pesa, is also evaluating a move into wealth management.

Fifth Third bank partnered with Blend to revamp its home mortgage process.

16,000 ATMs across the UK now facilitate cryptocurrency cash-outs. Visa, meanwhile, is exploring how digital currencies can be used for peer-to-peer offline exchanges, similarly to cash.

The SEC approved a rule change that will allow companies doing direct listings on the NYSE to raise primary capital as well.

Mastercard faces a £14 billion class action lawsuit in the UKS brought against it by 46 million consumers, claiming that it reaped the rewards of interchange fees which were passed on to consumers in the form of higher prices.

Fintech

Product Launches

WhatsApp is quickly iterating on its Indian product, rolling out insurance and pension products.

Payments startup Stax launched in Africa to be a single point of call for money apps and wallets - as migrant remittances to Africa remain steady despite the pandemic.

Parental investing app Earlybird launched on the app store. Object Astra, an equity startup for people laid off during the pandemic, launched in the UK

Expensify launched financial group chat.

Other News

Covid is accelerating the rate of tech change at banks. There are now 250+ neobanks. Revolut will partner with Belgium’s Qover to offer digital insurance in its banking app.

Homeadvisor is partnering with Affirm to offer installment loans on home improvement projects. Adyen is partnering with Flywire to facilitate vertical payments globally.

Samsung Pay is eliminating its rewards program at the end of the year. The UK banned an Instagram influencer campaign for buy-now-pay-later firm Klarna that encouraged people to use credit to 'boost their mood'.

I will only respond to this title from now on. (Source)

Financings

Online checkout and payment fraud platform Bolt raised $75 million.
Liberis, which provides financing to small businesses, raised £70 million in new funding.
Israeli fintech Trigo raised $60 million to build smart checkout technology.
Digital payroll platform Skuad raised a $4 million seed round.
UK trading analytics workflow platform Tradefeedr raised $3 million in early-stage financing.
Perch, an app for building credit through non-traditional payments, raised a $2.5 million seed.
Ghanaian electronic money issuer Zeepay raised a $940,000 seed.
PayJoy, a provider of financial solutions for underbanked consumers in emerging markets, secured $26 million in debt funding from Lendable.
Banking tech firm 10x Future Technologies hired Lazard to look into a $100 million Series C.

Exits and M&A

In the massive wave of payment service provider industry consolidation over the past year, news came out that FIS and Global Payments held unsuccessful talks for a merger that would have been worth $70 billion.
Japan’s NEC Corp will buy Swiss financial software firm Avaloq for $2.2 billion.
Rent-a-Center acquired lease to own credit issuer Acima for $1.65 billion.
Chase closed its acquisition of WePay, the fintech that provides payments services for platforms like GoFundMe, for $400 million.
Japanese roboadvisor Wealthnavi raised $173 million in its IPO on the Tokyo Stock Exchange.
Magazine Luiza, a Brazilian retailer, will buy fintech firm Hub Prepaid Participações for $56 million.
Gojek bought a 22% stake in Indonesian bank Jago to provide digital banking services on its GoPay mobile platform.