REPORT
👉 Download the full Financial Technology Partners / FT Partners 2021 FinTech Almanac report, providing the most comprehensive review of global FinTech deal activity with analysis across private company financings, IPOs, M&A, and SPAC transactions here.
👀 NEWS HIGHLIGHT
Discussing Q4 earnings with analysts, PayPal CFO John Rainey disclosed that 4.5 million accounts had been shut down after “bad actors” took advantage of incentives and rewards programs, resulting in shares falling by 25%, according to Bloomberg.
On the conference call, PayPal representatives revealed that inflation and supply chain disruption were to blame for customers with lower incomes spending less and an increase in in-store shopping.
This led to the payments company foregoing its ambition of reaching 750 million active accounts by 2025.
In an attempt to reach this goal, PayPal had started to offer $10 incentives to those opening new accounts in 2021 but recently found that many accounts had been created by bot farms.
Rainey said: “We regularly assess our active account base to ensure the accounts are legitimate.”
Read the full CNBC article here
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📊 INFOGRAPHIC
Encouraged by the success of these ventures, Walmart upped its FinTech ambitions in 2021. However, the retail giant is far from done in its quest to generate revenue beyond retail. On 26th January, it announced the acquisition of two FinTech startups, Even Responsible Finance and ONE Finance, a deal that is expected to close in the first half of 2022.
Walmart’s constant strive for innovation and diversification have been pivotal in influencing its investment strategy, and the retailer’s aspirations are not just limited to creating a digital bank, but instead developing financial services super-app providing a true digital ecosystem for its customers.
👉 Read the full WhiteSight article here.
📰 ARTICLE
Robinhood’s losses widened substantially in Q4 as tumbling average user spend hurt trading. The digital broker may be forced to expand its offerings to limit future losses.
Q4 pretax losses widened to $420 million, compared with a mere $19 million a year before.
Average revenues per user slumped 39% year over year (YoY) to $64. Robinhood blamed the decline on lower trading volumes for options and equities.
Despite the troubling bottom-line performance, net revenues increased 14% to $363 million for Q4 and 89% to $1.82 billion for the year.
The pandemic led to a flood of new investors in the stock market. Roughly 15% of retail investors in early 2021 traded for the first time in 2020, per a Charles Schwab survey.
👉 Read the full Emarketer article written by Will Paige here.
💬 INTERVIEW
Dan Dolev, Mizuho senior analyst for Fintech Equity Research, joins ‘The Exchange’ to discuss where he views fintech stocks moving in 2022.
👉 Read the full CNBC article here.
🎤 PODCAST
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NOW, ON TO THE SUMMARY OF LAST WEEK'S NEWS
🇺🇸 NATIONAL HIGHLIGHTS
⭐️ Upgrade, Inc., a Fintech platform that combines mobile banking, credit, payments, and more in a “Super App,” has added a new feature: Shopping. Link here.
⭐️ First Internet Bank is doubling down on banking as a service. Link here.
⭐️ New York-based Capchase, a fintech company that provides financial solutions to startups by allowing access to funds as they grow, announced that it has expanded its services to the Netherlands and Belgium. Link here.
⭐️As Sokin enters the US, Fintech Magazine talks to the fintech’s dynamic CEO, Vroon Modgill, about launching in one of the toughest marketplaces globally. Link here.
DIGITAL BANKING
Novo, the powerfully simple small business banking platform sponsored by Middlesex Federal Savings, F.A., launched the Novo Virtual Card to provide small businesses with a fast, safe payment method that’s available from the moment they fund their Novo account. Link here.
UK-based core banking software provider Thought Machine has signed its second community bank in the US – Mascoma Bank. Mascoma follows Arkansas-based Arvest, which opted for the vendor’s flagship cloud-based offering, Vault, last year. Link here.
Xrent is a debit card for renters who want to get on the housing ladder faster. The fintech’s fully automated ‘rent-to-mortgage’ program is designed to direct rent payments toward homeownership. Link here.
Vesta’s technology aims to provide a customizable platform for mortgage origination, supporting approval, underwriting, and the closing and funding of home loans. Link here.
Despite failing to secure a US banking license, Monzo has finally moved out of private beta in the country and opened up to the wider public. From today, all Americans can download the Monzo app and set up an account within 10 minutes, getting access to money management features and a contactless debit card. Link here.
PAYMENTS
Israel’s most valuable private technology company is in talks to buy a U.S.-based business to establish a foothold in the world’s biggest economy ahead of an initial public offering. Breaking into the U.S. is part of plans by payments startup Rapyd, last valued at $10 billion in August, to increase its attractiveness to American investors for a potential listing in two to three years, according to Chief Executive Officer Arik Shtilman. Link here.
Many Americans face complications or adversity when making purchases because the name on their debit card doesn’t match who they truly are. T-Mobile announced True Name® by Mastercard® for T-Mobile MONEY, enabling all customers, including transgender and non-binary customers, to be their authentic self with their chosen name on their T-Mobile MONEY debit card. Link here.
Esusu, a fintech that targets immigrant and minority groups and provides rent reporting and data solutions for credit building, said Thursday it has raised $130 million in a Series B fundraising round. Link here.
Revolut has announced that U.S. customers can transfer money to Mexican bank accounts. The service will be offered fee-free and would be done in up to 30 minutes. Link here.
BNPL
Block has completed its $29bn acquisition of ‘buy now, pay later firm Afterpay. Under the deal, first announced back in August 2021, Block - which is headed by the Twitter founder Jack Dorsey and owns the Square and Cash apps - has acquired all of the issued shares in Afterpay. Link here.
In a move to protect the financial health of consumers, Experian announced its plan to bring more transparency to the rapidly growing buy now, pay later (BNPL) industry. Link here.
Affirm Holdings, known for its buy now/pay later options, beefed up its app as the firm works toward a crypto offering. Link here.
CRYPTO
During American Express’ Q4 2021 earnings call on Tuesday, CFO Jeff Campbell made clear that a crypto-linked card isn’t in the near future. Link here.
The unprecedented influx of institutional capital into crypto last year elevated cryptocurrency custodian Fireblocks to the ranks of unicorns. Backed by the likes of BNY Mellon, Sequoia Capital, and Coatue, in July the New York-based startup, which helps exchanges, trading desks, banks, and hedge funds issue, store, and move about $215 billion worth of digital assets a month, nabbed a $2 billion valuation, raising $310 million in Series D funding. Link here.
BLOCKCHAIN / DEFI
The U.S. Securities and Exchange Commission (SEC) late on Thursday approved the country's 17th stock exchange, a subsidiary of Boston-based BOX Exchange, which will incorporate blockchain technology. Link here.
INVESTMENT
Moonfare, a startup that lets high-net-worth individuals invest in private-equity funds, is launching in the US. Link here
INSURTECH
Ascend, an NYC-based modern insurance payments platform, raised $30M in Series A equity funding, bringing the total funding raised to $39M. The round was led by Index Ventures with participation from new investors. Link here.
MOVERS & SHAKERS
Airwallex, a global fintech platform, announces the growth of its U.S. team with two key senior hires across its business development, partnerships, legal, and compliance teams as the business accelerates its growth in the U.S. and globally. Link here.
If you are a fintech startup and have over 100 questions send me an email, maybe I can answer a few.