Welcome to The Interchange! If you received this in your inbox, thank you for signing up and your vote of confidence. If you are reading this as a post on our website, please register here so you can get it directly in the future. Each week, I’ll review the hottest fintech news from the past week. This will include everything from funding rounds to trends to analysis of a specific space to passionate views on a particular company or phenomenon. There’s a lot of news in the fintech space, and it’s my job to stay up-to-date — and digest it — so you can stay informed. — Mary Ann
Last month, Andreessen Horowitz — one of venture capital’s biggest and best-known players — announced that its “headquarters will be in the cloud» forward.
Founded in 2009 in Menlo Park, California, the company, also known as a16z, has been an investment icon in Silicon Valley for years.
His new philosophy in the post-Covid telecommuting era is that there is no longer a need for a centralized headquarters. This philosophy also extends to the fintech team. And let’s face it, fintech is opening so many doors in general – making so many more things possible in terms of running a company or just working in general around the world. Many may underestimate how much the pandemic has really contributed to this acceleration in the world of financial services, and people are now commenting, “Oh, it’s a slowdown, and look at how much fintech investment has fallen, for example.” You have to put it in perspective—we’re still way, way ahead of 2020 in terms of how much money is going into this space. And fintech still accounts for nearly a fifth of all venture capital dollars. I believe it is because it affects everyone on a daily basis. If financial services are easier to access or if businesses are easier to operate or make payments or accept payments, then it is all because of FinTech.
I sat (virtually that is) with the general partners of a16z Angela Strange and Anish Acharya to learn more about why they believe we’re experiencing a ‘Silicon Valley divide’, which fintech sectors have the most potential, and how the new era of remote work has led to so many opportunities for fintech startups.
Read more here.
Reporter’s note: The interview with Angela and Anish took place a few weeks before publication, and after publication I learned that recent analysis it is reported that of the firm’s fintech portfolio of 42 companies, only four had female co-founders. I reached out to partners about this topic this weekend, but had not heard back at the time of this newsletter. Of course, it’s the weekend, so I wasn’t expecting a reply so soon. If I hear back, I’ll let you know next weekend!
My fintech partner in crime, so talented Natasha Mascareñasfinished the week with a scoop about A strip laying off some employees who support TaxJar, a tax startup purchased last year. According to Natasha, “The layoffs that have taken place over the past month are related to Stripe’s decision to end its TaxJar-focused go-to-market efforts at the end of July. Sources estimate between 45 and 55 employees affected by the workforce cuts, at least some of whom have been asked to take 30 days to apply for internal jobs at Stripe… According to LinkedIn, TaxJar co-founder Matt Anderson left Stripe in July, followed by people in sales, marketing and partnerships.” Read more here.
The world of cost management has become (even more) competitive. Corporate expense and cash management company Ro announced that it is adding expense management to its offerings with “custom controls designed to make spending less painful.”
The company told me via email that it believes “offering the complete package” is critical in today’s fintech world. Specifically, the spokesperson said: “Looking at the landscape, there are ten different vendors for each individual process: spend management (eg Brex), expenses (eg Expensify) and banking (eg Mercury). Combining different platforms for these separate functions creates confusion for financial users. Roh believes in the power of integrating cost management and business banking services. Every corporate finance process—AP, commercial banking, expense/card management, treasury management—works better when they work together in a single, connected view.”
Startup in December raised a $75 million Series B funding round led by Dragoneer Investment Group.
When it comes to cost management, Air base announced the appointment of Philippe Lacour as Chief Revenue Officer. Most recently, Lacor served as CEO of the no-code platform company Unqork, where he was responsible for go-to-market, including sales, pre-sales consulting, customer success, revenue operations and affiliate sales. He also led the company’s expansion into APAC. Before that, he was CRO at Envoy.
Mexican fintech Cavalta, which serves Mexican SMEs and was formerly known as Credijusto, has agreed to go public on the US stock exchange through a SPAC at a preliminary valuation of $547 million. The deal is believed to be the first time a Mexican fintech has agreed to a public listing on a US stock exchange. In a press release, the company said it is merging with LIV Capital Acquisition Corp. II, a private equity firm founded by Mexico City-based LIV Capital. After the deal closes, LIVB will be renamed Covalto and remain listed on Nasdaq under the new ticker “CVTO.” The company reported a 152% CAGR in production between 2015 and 2021. here.
While we’re on the subject of public markets, something interesting is happening with them FinTech sharesin accordance with Fintech Index by F-Prime. The index gained 41%, compared with EMCloud’s 19.5%, Nasdaq’s 15.6% and S&P’s 12.2%. It is noteworthy that Affirm leads the ranking and has grown by 67%. Insurance stocks overall rose 46%, led by Lemonade and Oscar Health. Payment inventory grew 44% thanks to Wise and Mercado Libre. Wealth and asset management stocks also rose 32%, helped by Coinbase and Bakkt Holdings. Meanwhile, banking and credit stocks rose by 24%.
Speaking of Confirm. The giant announced buy now, pay later extended multi-year partnership with BigCommerce which “makes Affirm the preferred and recommended time-based payment partner for tens of thousands of BigCommerce merchants,” according to the two companies. As a result of this partnership, BigCommerce sellers can activate Affirm as a checkout payment option directly on their BigCommerce seller dashboard.
August 12 of this year PayPal announced that “all eligible PayPal account holders in the US can now transfer, send and receive cryptocurrency using PayPal.” TechCrunch reported that the move would is happening in early June.
Robin Hood released several new features last week. On the one hand, it is ran advanced charts, with the goal of “providing all customers with customizable, fast, simple and in-depth analysis right in the app.” The company said advanced charts were the “most requested feature” among active customers. The company also launched Cash card offersa new benefit that allows all Cash Card customers to automatically earn cash back when they spend at retailers like Chevron, Nike, Five Guys, Macy’s and more.
From PitchBook on payments: “The accelerated digitization of financial services, as well as the shift to online services, have benefited fintech startups over the past few years. The COVID-19 pandemic helped accelerate these trends as consumers turned to digital financial services instead of face-to-face interactions… Digital payments, one of the earliest financial segments to go digital, continued to see rapid disruption during this period. Checkout platforms have benefited from demand for online and contactless transactions, telecommuting has driven demand for payroll software providers, and corporate credit card providers such as Ramp and Brex have reportedly seen a surge in revenue.”
Hello Alice, which says it “helps more than 1,000,000 small businesses grow,” has announced the launch of a new Mastercard for small businesses. The card launched Aug. 16 in partnership with Mastercard and First National Bank of Omaha and offers small business owners features such as a rewards program with the ability to earn points by completing “business promotion activities” on the Hello Alice platform. The company says it recently completed a Investigating Small Business Access to Capital and found that 78% of owners say access to capital limits their ability to manage their day-to-day operations, with black (84%) and multiracial (82%) owners over-indexing on this statement. According to him, Hello Alice developed the card “to meet the needs of small business owners where they are, breaking down long-standing barriers for those who have traditionally been denied access.”
Financing and M&A
Seen on TechCrunch
Saw it elsewhere
Ecuadorian “unicorn” Kushki buys a financial services startup in Mexico. TechCrunch covered the company $100 million at a $1.5 billion valuation in June.
Another busy fintech week comes to a close. Thanks as always for your support in reading and sharing this newsletter of mine! Have a great week ahead. xoxo, Mary Ann