Aplazo locks in a $45 million B for BNPL (TWIF 5/18)

Unseen Photos From the De La Soul Archives

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Hello Fintech Friends,

🤔 I was impressed with the story of PayHOA this week. The Kentucky-based platform for property managers and homeowners associations was previously bootstrapped and just announced a sizeable Series A.

Before starting PayHOA, founder Mike Bollinger bootstrapped two other companies, a startup focused on fraternity and sorority financial management and a startup that catered to nonprofit tax compliance needs. Now, PayHOA – which only has 15 employees – is profitable, has 625,000 users, and has grown revenue 70% year-over-year. A great example of being scrappy in the early days so that you can fundraise on your own terms when you scale.

💭 I also find myself wondering where exactly we find ourselves on the BaaS and fintech regulatory timeline in the US these days. The current spate of stricter bank exams and consent orders seem to indicate an FDIC and OCC campaign to reign in fintech.

But this pushback is arguably a correction for earlier permissiveness. As they say, regulation is written in blood. While prudential federal regulators were willing to let banks take on more fintech program management, now that many of those programs have grown in size (with Chime, eg. passing 7 million customers), it's time to ensure that banks are complying with their oversight and service requirements to end users.

In a sign that things may be turning around, the OCC recently issued new guidance on Third-Party Risk Management for community banks. These aren't an ironclad set of principles that will protect banks from fines and consent orders, but they do signal that regulators want to create a framework for fintech, not regulate it out of existence.

The arc of the fintech market is long, but it bends towards innovation. As long as users continue to migrate to fintech products and more companies seek to embed financial services, it is unlikely that these periods of regulation have a long-term chilling effect on fintech. Instead, I beleive that they lead to improved rules and supervision, for a healthier fintech ecosystem. But to take that view, you have to watch the trendlines and ignore the headlines.

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

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💸 Venture Financing

Aplazo, a Mexican provider of buy-now-pay-later loans primarily to underbanked populations, raised a $45 million Series B.
Linnovate, a provider of asset servicing for the alternative investment industry, raised $40 million.
Fintech Farm, a UK startup that helps banks in emerging markets launch all-digital neobanks, raised $32 million in initial Series B funding.
PayHOA, a previously-bootstrapped startup focused on payments and management for homeowners associations, raised a $27.5 million Series A.
Data Zoo, an Australian provider of global identity verification solutions, raised an A$35 million ($22.7 million) Series A.
FinLocker, a white-label 'financial fitness' and homeownership platform, raised a $17 million Series B.
Harbor Lab, a Greek maritime accounting and logistics platform, raised a $16 million Series A.
Yendo, which provides a vehicle-secured credit card, raised $15 million in equity and $150 million in additional lending debt.
Kudos, an AI-based smart wallet that picks the best card for purchases (shwon below), raised a $10.2 million Series A.
Arch Labs, a platform for bridgeless trading direct on bitcoin, raised a $7 million seed round.
Uxuy, a Singaporean decentralized multi-chain trading platform, raised a $7 million pre-Series A.
Worky, a Mexican provider of an HR and payroll software solution for companies, raised a $6 million Series A.
AgriDex, a Solana-based platform that tokenizes agricultural commodities and enables trading of them, raised a $5 million pre-seed.
Niro, an Indian embedded lender to e-commerce platforms, raised a $4.3 million "pre-Series B".
NG.Cash, a provider of financial services to Gen Z in Brazil, raised R$65 million ($12.7 million).
Butter, a platform to prevent involuntary turn and breakage for subscriptions payments, raised a $10 million round at a $135 million valuation.
MNZL, an Egyptian startup that allows users to leverage assets like homes and cars for liquidity, raised a $3.5 million seed.
Zest Protocol, a bitcoin lending startup, raised a $3.5 million round.
Layer, an embedded accounting software startup (shown below), raised a $2.3 million pre-seed.
Zeal, a UK provider of a self-custodied crypto wallet, raised $2 million from crypto developer Gnosis.
Numra, an Irish AI-powered financial automation platform, raised €1.5 million.
Incredible, which uses the latest open banking technology to help users repay credit card debts more efficiently, raised a $1 million pre-seed.
Haven, an accounting automation platform for businesses, raised a $1 million pre-seed.

The main accounting dashboard SMBs see when accessing Layer's embedded accounting software within their existing SMB platforms.

💰 Venture Funds

Global nonprofit Accion launched the Accion Digital Transformation Fund, a $152.5 million fund for large financial institutions, including microfinance organizations serving small businesses currently excluded from the world’s financial system.

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