Exits & Deep Reads

The Worldpay is not enough (TWIF 2/19)

Hello Fintech Friends,

🗣️ I really enjoyed this open and frank conversation on intersectionality and identity with two fintech founders, Nadia of Tome and Neepa of Themis*. I hope we can facilitate more of these conversations; there are very real human questions that underlie how we navigate in the fintech world, which deserve to be discussed out in the open. Julie and Helen do a great job moderating - give it a listen.

🤠 On another topic - a lot of people don't typically view SXSW as a fintech event, but this year there is a big wave of fintech activity. We’ve partnered with Fortress on The Fintech Fortress - 4 days of programming tailored to builders at the corner of Fintech and Web3. Come by and meet Alex on our team!

👍👎 Have feedback for us? Let us know!

Please find another week of fintech exits and deep reads below.

☯️ Exits

🤝 M&A - Fintech

UK bank NatWest will buy 85% of workplace savings and pension app Cushon for £144 million. The startup previously raised £52.2 million.
European digital currency exchange Coinmetro acquired blockchain-enabled small business financing app Ignium for €4 million.
Financial education platform SUMA Wealth will acquire Reel, a savings and personal finance solution - both of them Latinx-owned companies.
Peer-to-peer lender turned consumer neobank Zopa entered an agreement to acquire buy-now-pay-later provider DivideBuy.
Brazilian mobile payments provider PicPay acquired rival BX Blue and called off its planned IPO.
Saudi small business transaction processor Hala agreed to acquire UAE microbusiness payment processor Paymennt.
Chinese e-commerce giant Alibaba sold its stake in India’s Paytm for $167 million following increased tensions between the two countries.
Fintech giant Finastra is exploring a sale of its banking business, which could fetch up to $7 billion.
Bankrupt crypto lender Celsius nominally found a buyer, agreeing in-principle to be acquired by NovaWulf Digital Management.
The UAE's Blockfinex bought Nigerian crypto app Fluidcoins after it failed to raise funding.

🏦 M&A - Bank and FinServ

Private equity firm Parthenon Capital will acquire the gaming-focused division of Global Payments for $415 million and will spin it out as Pavilion Payments.
FIS is spinning out Worldpay (more on that below).
Indian bank Kotak Mahindra will acquire microfinance lender Sonata Finance for ₹5.37 billion ($65 million).
Truist Bank will sell a 20% minority stake in its insurance brokerage unit to private equity investor Stone Point.
Royal Bank of Canada acquired the Canadian operations of real estate tech company OJO.
Kazakh brokerage Freedom Holding entered an agreement to buy US financial services firm Maxim Group.
SoftBank is considering a sale of M&A bank Raine Group.

Initial reactions to FIS spinning out Worldpay:
- FIS is writing down $17.6B worth of Worldpay stock by "recording a non-cash goodwill impairment charge" related to the Merchant Solutions reporting unit
- Worldpay was bought for ~$40B, implying a standalone value of ~$25B
— Jareau (@jkwade) February 13, 2023

Is it wrong to call BS on this slide from FIS about the spin off of their World Pay business?

How are you going to expand margins with an aging product and in a world where Stripe and Adyen (and Fiserv) are all competing with you? How do you defend more than IC+? pic.twitter.com/zHbuUhGw82
— Matt (@regulatorynerd) February 13, 2023

Stripe 2022 numbers per @theinformation:
- Gross revenue: $14.3B, 27% YoY
- Net revenue: $3.2B, 25% YoY
- Net revenue minus fraud losses: $2.8B, 18% YoY
- Net revenue from non-payments products: $280Mhttps://t.co/UPuWJD0Aru
— Jareau (@jkwade) February 17, 2023

we often underestimate the power of incumbency in payments and the time it takes for new players to be accepted by both the merchant *and* the consumer -- take a look at @PayPal

(and the competitors here are also well-resourced incumbents, just later to the wallets game) pic.twitter.com/OdbBT9jaGS
— Seema Amble (@seema_amble) February 11, 2023

1/16 Stablecoins are undeniably crypto's killer use case atm and going to mainstream faster than any other application.

Don't take my word for it, look at the data 🧵
— Patrick Hansen (@paddi_hansen) February 5, 2023