Exits & Deep Reads

Why is it so hard to build a PFM? (TWIF 11/19)

Hello Fintech Friends,

One of the more unique acquisitions in the fintech and crypto worlds announced this week was that of crypto media company The Block, which sold a majority stake to Singaporean venture capital firm Foresight Ventures at a valuation of $70 million. The firm's CEO was previously ousted after it was disclosed that he had taken millions of dollars in loans from Sam Bankman-Fried, ostensibly for positive reporting on FTX.

Separately, the prevailing wisdom for the past ~3 years in fintech has been that neobanks and roboadvisors (or asset managers) are not good tech businesses. That assumption is getting challenged as higher interest rates create windfalls for companies like Monzo and Wealthfront:

We've come full circle in the fintech narrative arc - neobanks like @monzo and roboadvisors like @Wealthfront are profitable and thriving pic.twitter.com/pgB5gG95Gw
— Nik (@NikMilanovic) November 18, 2023

Please find another week of fintech exits and deep reads below. (👍👎 Have feedback for us? Let us know!)

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📖 Reads of the Week

The Wall Street Journal covers the pernicious challenges facing companies that try to build stand-alone personal financial management apps, and why, as Mint shuts its doors, nobody has been able to build the 'killer app' for helping people manage their money.

For Chaos Engineering, Francisco Arceo decomposes how Americans make money, why most of them don't make investment income, and what lessons fintechs can take away, in Our Money in Data.

In Pakistan, Elphinstone founder Farooq Tirmizi writes about the slow but growing digitization of money and the middle class' acceptance of digital payments. (With a shout-out for Fintech Fund portfolio co. Safepay!)

☯️ Exits

🤝 M&A - Fintech

Australian payment facilitator Till Payments, once valued at $500 million, reportedly sold to Canadian payments processor Nuvei for only A$47 million ($30.5 million), less than the Series D it raised seven months ago.
Australian payments enablement and software provider Flywire acquired university and student management software builder StudyLink in order to build out its education payments business.
Tenity, an early-stage fintech VC, announced the acquisition of Hackquarters, a startup accelerator with a presence in fintech.
Capital markets access platform Q4 sold itself to private equity firm Sumeru for $257 million fully-diluted.
Private equity investor Advent International agreed to buy UK small business payment service provider myPOS for around €500 million.
Fund management and distribution platform Allfunds is reportedly approaching private equity investors to gauge interest in a potential buyout.
Italian payments giant Nexi is said to be in talks with infrastructure fund F2i Fund to sell off its Italy clearing and digital corporate businesses for €800 million. (It's separately in talks to sell off its ATM network as well.)

🏦 M&A - Bank and FinServ

Australian asset manager Pacific Current Group ended buyout talks with private equity firms GQG and River Capital, saying it did not receive any offers, and sending shares down as much as 11.8% to A$7.95.
Kennedy Lewis, an alternative-credit manager with $14 billion under management, is exploring options including a sale.

I’d love to be wrong here, but at the moment I see no way for “fintech” (ie, venture backed solutions) to solve childcare affordability

Eased regulation around facility opening would be impactful, but that has obvious risks

Another interesting concept would be some sort of tax… https://t.co/oui3rYnonz
— Chris Brown (@almostcmb) November 11, 2023