The fintech space continues to be competitive and full of drama

Image credit: Jacob Ammentorp Lund / Getty Images

Welcome to The Interchange! If you received this in your inbox, thank you for signing up and your declaration of confidence. If you are reading this as a post on our site, please register here so that you can receive it directly in the future. Each week we take a look at the hottest fintech news from the previous week. This will include everything from funding rounds to trends to an analysis of a particular space to hot takes on a particular company or phenomenon. There’s a lot of fintech news out there, and it’s our job to stay on top of it – and understand it – so you can stay up-to-date. — Mary Ann and Christine

Busy, busy, busy

It was a busy week in startup and venture land, and the fintech space was no exception.

In the venture world, I reported on Peter Ackerson’s departure from Fine Capital earlier this year and the fact that he has since started a new venture company called Audere Capital. The circumstances of his departure remain unclear, but a source speculated that tension arose between Ackerson and Fin’s founder, Logan Allin, over some of what happened at alternative funding startup Pipe last year. More details here.

We also wrote about Tellus, a startup that raised $16 million in an Andreessen Horowitz-led seed round of funding last year that is now under investigation by the US government. When I interviewed the company’s co-founder, Rocky Lee, last year, I admit I was a little skeptical of any company that would bet on people taking high mortgage rates to upgrade their homes (think 9%) and using customer savings deposits to finance such loan. When I asked Lee if this was risky, he admitted that it was, but he insisted that Tellus used “very strict underwriting criteria” and had yet to see any defaults “because the majority of borrowers soon refinance their loans to more favorable terms.” Well , last week U.S. Senator Sherrod Brown, chairman of the U.S. Senate Banking, Housing and Urban Affairs Committee, wrote a letter to FDIC Chairman Martin Gruenberg expressing concern about Tellus’ allegations. In that letter, Brown pushed the FDIC to review Tellus ‘ business practices “to ensure clients are protected from financial fraud and abuse.” In a twist, I discovered Lee was married to a16z general partner Connie Chan (not sure if he still is). Neither he nor the venture firm commented on the senator’s concerns, but Tellus CEO/CTO Jeromee Johnson gave me a statement via email Read more here.

The infrastructure continues to be robust, even in times of recession. Just this week, I wrote about two payment infrastructure companies taking action, and my colleague Ingrid Lunden wrote about Stripe’s latest customer win. For starters, I covered Finix officially becoming a payment processor — a natural progression, really, for a company that’s been slowly expanding its offerings. In case you’ve forgotten, Finix is ​​a startup that Sequoia pulled back on investing in after Stripe (an existing portfolio company) expressed concerns about being too competitive. (Finix got to keep its $21 million!) Now that it connects directly to every major U.S. card network—American Express, Discover, Mastercard and Visa—and no longer relies on a third-party processor, Finix says it can offer businesses “immediate onboarding , improved finances and opportunities to lower brokerage fees.” I spoke with CEO and co-founder Richie Serna all about it, and why he thinks what Finix has built is different than what older players and Stripe have on the market. I also wrote about Liquido, a Mountain View, California-based startup that aims to be the “Stripe of Latin America” ​​and more. Index Ventures’ Mark Fiorentino led two funding rounds totaling $26 million into the company in 2021. Interestingly, before joining Index, Fiorentino helped build and lead business strategy and finance at Stripe from 2015 to 2019. And Ingrid wrote about that Stripe landed Uber as a customer, which was somewhat unexpected considering that rival Lyft has been a longtime marquee customer of the company.

And last but not least, corporate card and spend management startup Brex announced last week a global expansion of its Empower product into new markets, so companies that are its customers can now “spend globally and operate locally” in countries such as Brazil, Canada , Israel, Japan, Mexico, Singapore, South Africa and the Philippines, as well as in 36 European countries. In an interview with TechCrunch, Brex co-founder and co-CEO Henrique Dubugras said the company believes the move “will really open up TAM” for Brex since so many existing and potential US customers “have some kind of global business.”

“One of the big problems that companies have when they operate globally is that they actually need to open an account in all these different countries where they can have employees. It becomes very complicated to set up all your financial systems on a country by country basis, he added. “Now, if you use Brex, you can actually operate as if you were a local company with a local card.”

In other words, companies using Brex that have employees working in other countries give these workers the opportunity to use a company card freely in their home country, while at the same time giving the company the opportunity to pay the bank statements in local currency from the local bank.

“It’s something we’ve been trying to do for a while,” Dubugras added, noting that insurtech Lemonade is a customer. – Mary Ann

Image credit: Brex

Other weekly news

Christine, Mary Ann and Natasha Mascaren have teamed up to write about the collapse of First Republic Bank, and spoke to tech entrepreneurs and investors with money in the bank about what’s next. We also spoke to an FRB competitor about what all these startup bank collapses mean for business. More here.

Reports Carly Page: “Hackers have published a trove of sensitive data stolen from the payment software company AvidXchange after the company fell victim to ransomware for the second time this year. AvidXchange offers cloud-based software that helps organizations automate invoice processing and payment management processes. A ransomware group called RansomHouse claimed responsibility for the recent cyberattack on AvidXchange.” More here.

Christine wrote about the launch of former Bolt CEO Ryan Breslow’s new company, Love, which is a wellness marketplace that features an initial 200 curated products, such as supplements, health testing kits, and essential oils, among such categories as stress reduction and gut health. All of the products on the site pass a set of compliance processes and assessments developed in partnership with clinical trials company Radicle Science, which Breslow said is unique to the company. More here.

British neobank Revolut launched in Brazil, the first country in Latin America to offer customers a global bank account and crypto investments, Silicon Republic reported. The company already had a presence in the country after hiring Glauber Mota as CEO of its Brazil operations in March 2022. Alex Wilhelm and Anna Heim reported in April that Revolut “saw its value decline by around 46% in the eyes of one of its backers. » More here.

Tage Kene-Okafor reported on Fingo, a YC-backed Kenyan fintech, which launched a neobank — the first of its kind in the East African country, according to the company — in partnership with pan-African financial institution Ecobank Kenya. “It has taken a while for Fingo to get here since CEO Kiiru Muhoya and his co-founders James da Costa, Ian Njuguna and Gitari Tirima founded the Kenyan outfit in January 2021 to provide financial services that appeal to a fast-growing African youth who happen to is the youngest globally, but the most economically marginalized. After a $200,000 pre-seed round, Fingo entered YC S21 and raised $4 million in seed funding by the end of that year.” More here.

Manish Singh reported it Paytm, India’s leading mobile payments firm, reported a 13.2% rise in revenue to $285.7 million in the quarter ended March, narrowing its loss by 57% to $20.5 million “in a sharp turnaround for the company which in increasing degree is trying to become profitable after a tremor and a year and a half after the public debut.” More here.

More headlines

Apple and fintechs like Robinhood are chasing yield-hungry depositors as Fed rate hikes continue. Similarly, Arta Finance, a company that provides access to alternative assets, debuted the Harvest Treasuries AI-Managed Portfolio, which offers a 4.62% APY (annual percentage rate of return), and Wealthfront’s cash account now offers 4.55% for all clients and 5, 05% APY for clients who refer a friend.

Fintech is estimated to be a $1.5 trillion industry by 2030according to a new report from Boston Consulting Group and QED Investors

Opendoor tech earnings beat $0.77, earnings topped estimates

Everee joins Visa’s Fintech Fast Track program with the launch of the Everee Visa® payment card

Financing and M&A

See TechCrunch

African payment services provider Nomba raises $30 million, backed by Base10 Partners and Shopify

Bend takes on Brex and Ramp with a green twist and a $2.5 million seed round

And other places

Digital wallet for insurance Marble bags $4.2M. Speaking about the increase to TechCrunch, CEO Stuart Winchester said via email, “American households are under a lot of financial strain right now, and insurance costs are no small part of that. We’ll continue to roll out features that make it easier to not only saving money and maximizing value, but also reducing the mental burden of managing multiple policies. We expect to see the insurance industry in general adopt more of the consumer-friendly features we’ve helped pioneer.”

Insurtech startup Novidea raises $50 million in Series C

Exclusive: Former Venmo COO raises $20 million for Vera Equity

Tarabut Gateway raises $32 million to expand Saudi Arabian open banking services

Music financing startup Duetti raises $32 million to buy old songs

Billing platform Inbox Health raises $22.5 million and more digital health funds

Google’s VC firm just led a $12 million Series A investment in Range, a startup that trains AI to provide financial advice

OpenEnvoy Raises $15M to Expand AP Automation Solution

Miami-based startup Kiddie Kredit raises $1.4 million with backing from Dwyane Wade and Baron Davis

Black-owned technology company Greenwood buys digital banking rival. TechCrunch covered Greenwood’s latest raise in March 2021 here.

Join us at TechCrunch Disrupt 2023 in San Francisco in September as we explore the impact of fintech on our world today. New this year, we will have a whole day dedicated to all things fintech with some of today’s leading fintech figures. Save up to $800 when you purchase your pass now through May 15th, and save an additional 15% with promo code INTERCHANGE. Learn more.

We’re done for this week, and that’s a good thing because we’re also EXHAUSTED! See you next week – same time, same place. Until then, take good care! xoxo, Mary Ann and Christine

Image credit: Bryce Durbin