May 25, 2022

Welcome to my weekly fintech column. I’ll be posting this every Sunday, so check back and listen to the Equity podcast in between posts. Alex WilhelmI Natasha Mascarenhas And I hold back all startups! And if you’d like it delivered straight to your inbox as soon as it’s officially announced on May 1st, sign up here.

On March 25, Pitchbook released its fintech 2021 annual report, showing that the fintech industry raised $121.6 billion last year, up 153% year-on-year in terms of the value of global VCs. transactions. Alex and I will delve into this report next week, but it’s good preparation for what I’m going to explore today.

There has been a lot of talk lately about the slowdown in venture capital funding. But if last week’s fintech mega rounds are any indication, then the sector is proving that it has a lot of potential – at least for now.

It’s not surprising, but it’s noteworthy nonetheless that corporate expense and expense management startup Disaster has confirmed it has raised $200 million in equity, received $550 million in debt, and double his rating up to 8.1 billion dollars. Not bad for the only publicly launched company a little over two years agoI

I also exclusively covered Jeeves’ $180 million Series C which: Quadruple the value of this company to $2.1 billion. after half a year. I’ve been writing about Jeeves since he sneaked out last June. $31 million net worth And it was wild to watch him grow. He is also active in corporate spending and expense management with a broader global footprint and infrastructure component. In fact, he describes himself as The first platform to manage spending across countries and currencies. exists in living beings and wants to spread in them, Latin America, Canada and Europe. He also considers Southeast Asia and possibly Saudi Arabia and Africa.

Another thing that Ramps and Jeeves have in common—besides their skyrocketing value—is that both companies are experiencing explosive growth. Unfortunately, like most private companies, none of the startups discloses accurate earnings data. But they give at least some statistics. Disaster reports that in 2021, revenue grew “initially 10 times” compared to 2020, while the number of cardholders grew 7 times and the user base grew 15 times. CEO Eric Glieman also tells us there has been a disaster. The annual volume of payments is more than 5 billion US dollars.Since he makes money from every trade, it’s safe to say that Ramp is doing well and is entering an impressive revenue segment. Meanwhile, Jeeves says its revenue is up 900% since the September spike and, even more impressively, it generated more revenue in the first two months of 2022 than it did in 2021. Meanwhile, startup Doubled its customer base to over 3,000 companies and reached nearly $1.3 billion in gross transaction volume (GTV) year-over-year.

Is this market big enough for so many global players? This remains to be seen. But it will be fun to see how the race in space ends. As my friend and Equity podcast co-host Alex pointed out this week, it looks like these companies can’t stop adding features and new products anytime soon. For example, brakes announced last week that it has awarded $10 million in venture capital to Zesty.ai, a leading provider of predictive data analytics for climate risk. Brex launched a venture capital lending program last August as part of its efforts to secure sufficient funding for both start-ups and growing companies. (He also applied for a banking charter last year but eventually withdrew his application.) Meanwhile, new players are entering the scene. I recently wrote about a new company called Glenn AI, founded by former OnDeck and Better.com CFO Howard Katzenberg, that aims to help companies deal with issues such as deal terms, position data, overselling and negotiation. using machine learning to understand. Analyze the possibilities. These types of startups keep current players (relatively speaking) on ​​their toes.

It is safe to say that as long as these startups can offer other companies, the rapid influx of funds to support these initiatives will continue – but with one caveat – if they demonstrate rapid growth, as described above.

It’s really too early to tell if fintech really stands apart when it comes to slowing down global venture funding, or if we’re just starting to close deals that started late last year. The second quarter will give us more information on whether fintechs are really in or out of a recession.

On that note, our amazing fintech/crypto reporter Anita Ramaswami Talked to Lightspeed Venture Partners Justin Overdorf on the topic and according to them, fintech Not Immunity from the global recession. In comparison, Overdorf joined Lightspeed in 2021 to lead the team’s fintech practice. He told Anita:

image credit: Self-proclaimed “fintech junkie” Justin Overdorf / Lightspeed Venture Partners website

We are seeing big changes in the market. Estimates have not dropped yet, but what is changing is that we are definitely seeing a decrease in the round shape. And the number of proposed terms is reduced. So when you see you know the deal and [founder] For those who normally enter Serie A for $20 million, the market tells them to raise $12 million to $15 million because that’s where the appetite is. And instead of eight terms, you get two. And it happens quite clearly….Now she said I think I’m still too hungry [for fintech] cross the border.

On behalf of the company, Overdorf tells Anita that from what he hearsVenture capitalists are “trying to extend the life of their money”, and as a result, “it is not known where it goes.”

So if Overdorf’s comments are the clue, startup founders and investors alike are working hard to make sure their dollar holds up in the long run.

Robinhood expands into consumer finance as Apple steps up its fintech game

In other noteworthy news, this week Robinhood announced that Launch a new debit card Which makes it possible to invest with change. As my very talented colleague Sarah Perez and I discussed, this move was important because it shows that Robinhood is taking concrete steps to move beyond simple commerce and into more areas of consumer finance. Sarah’s exact words were: “This puts her in more direct competition with other fintech companies like Chime and even P2P payment companies like CashApp and PayPal/Venmo that offer customers online accounts instead of physical payment cards. The Roundup feature can also help to passively increase the investment of clients like Acorns. [with its savings app] And just like Venmo does with cryptocurrency.”

Another example of how fintech is trying to do all this.

Meanwhile when our friends join in drafting Reportedly Apple is reportedly buying British startup Open Banking Shreya Yash Approximately $150 million. This follows the introduction in early February New touch payment feature For iPhone, which turns the device into a contactless payment terminal. The tech giant is clearly entering the fintech arena.

Fund

As always, there was no shortage of funds around the world, although I must admit that this list seems to be smaller than in recent weeks. Here is an example of some:

In other news

master card announced Launch of a new set of smart decision-making tools based on Open Banking aimed at eliminating friction in the payments ecosystem and increasing the success rate. The credit card giant called the move “one of the first significant technological advances to come out of the Finity acquisition.”

This article by our very own Alex Wilhelm joins the “Fintech is the Exception” story from above: The public debut of the Forge will be another test of the SPAC exhaust system.I Forge runs the private equity market, mostly equity in unicorn startups. It went public this week via SPAC and it’s been a really impressive start for Sansa.

Ola said on March 24 that it had reached an agreement to acquire Avail Finance, a financial services startup that serves to expand its financial services offering as a taxi giant for workers. Manish Singh will tell us all the details this pieceI

Siteline, which was launched just a few months ago Nevada’s first unicornannounced last week that JPMorgan Payments will be the primary processor for Play+ transactions, which include online casinos, mobile sports betting, cashless casino payments “and more.” The company told me, “The gaming industry has a notoriously crappy payments ecosystem that suffers from regulations and casino reliance on cash. But recently there have been major technological advances, such as helping Sightline launch the world’s first casino. Completely cashless infrastructureI

historical announces that he expects to achieve 1 million active subscribers this month. Bing Chen, CEO and Co-Founder, said: “We are thrilled to have reached this milestone, especially since traditional banks have turned down most of our clients in the past. With a history card, they build a credit history and achieve financial mobility. I wrote about startups. $32.5 million Series B in February 2021.

Last week, BMO Financial Group and 1871 launched a nationwide call for proposals for female-led startups for their flagship fintech industry program. wmnfintechApplications for Program I 2022 are accepted until April 22, 2022.

In this interview with Finledger, Morty co-founder Nora Appel discusses the path of the online mortgage market, overall goals and plans for the future. I spoke to Nora myself earlier this year and the former engineer is very impressive. In July 2021, his company raised $25 million Series B at a $150 million valuation. He told me in February that startup revenues have grown almost 14 times since 2019, doubling in just the last year.

image credit: Nora Upsell / Morty

Fund

Speaking of women in fintech, Mila Ferrell, co-founder of the Zoom product team, joined us last week. served, became the first female partner in a venture startup. In his new role, Ferrell will “shape the future of work and shape the fintech infrastructure for the next decade and beyond,” the company said in a statement.

image credit: Mila Ferrell / Cervino

Tishman Spear, one of the world’s largest real estate developers, announced that it has committed $100 million to its first proptech venture fund, founded by the National Pension Service of Korea and Ontario Investment Management Corporation. The company says it is raising up to $150 million in capital to invest “in technology opportunities across all real estate sectors.”

Well, that’s all for this week! My newsletter was supposed to go out today, but for logistical reasons, this date has officially been moved to May 1st. In the meantime, thank you for following and reading this column. Happy Sunday and next week!

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