Fintech Newsletter for 3/20/21

Below are news related to  fintech industry this week.

General News

Justice Department investigating Visa(NYSE: V) for anti-competitive practices in the debit card market.

From our Jan 16 newsletter, you may recall that the U.S Department of Justice announced Visa Inc. and Plaid Inc. had abandoned their planned $5.3 billion merger due to an antitrust lawsuit. WSJ reported that  Justice Department is currently reviewing whether visa, the largest card network in the US, uses any unlawful tactics such as restrict merchants from using low fee debit networks to maintain market dominance.

Stripe valued at $95 Billion.

Stripe raised $600 million in a new round of funding. The current round of valuation at $95B is 2 1/2 times more than the 2019 valuation.Stripe acts as a payment processor and boasts customer names such as Doordash, Shopify, Instacart, Lyft, Salesforce, and Google.The recent covid pandemic has given a boost to the payment volume processed by stripe. Stripe is also partnering with banks to offer merchant banking-related services. Stripe is signaling expansion in European markets by opening the second headquarters in Dublin.

Coinbase pays $6.5 Million fine to settle regulatory claims

Coinbase, a cryptocurrency operator, paid $6.5M to resolve the commodity Futures Trading Commission's investigation without admitting or denying the regulator's claims.  This settlement will likely mitigate any negative coverage after Coinbase goes IPO.

SPACs targeted for Short selling.

We discussed SPAC in a detailed post.  The journal reported a rise in SPAC skeptics' short interest in SPAC companies such as  Social Finance, Lucid, and Lordstown Motors. Will we see a Gamestop-like activity again? i.e., repeat of Battle of Hedge fund vs. retail investors

Vanguard Group has suspended plans to launch a mutual-fund business in China.

Vanguard is said to have paused selling its mutual fund directly in China. However, the company plans to work with ANT and build Robo advisory services to sell custom build portfolios of stocks, bonds, and other investment vehicles based on individual customer needs.

Upstart reported Q4 earnings.

Upstart (NASDAQ:UPST),a consumer lending company,released their first earnings report after their IPO in December.They reported a revenue of $86.7M up 39% YoY on a Net Income of $1 M.Company also announced acquisition of Prodigy software,a provider of cloud-based automotive retail software.More than $2B worth of auto sales have been reportedly powered by Prodigy software.

“While Amazon and Shopify have modernized the online shopping experience, the auto industry has been left behind. Upstart is on a path to reduce the cost of auto financing, and we can accelerate this opportunity with a modern multi-channel purchase experience,” said Dave Girouard, co-founder and CEO of Upstart

The acquisition is targeted to leverage the latest fintech lending trend called Buy-now-pay-later (BNLP)

India's Axis pay launches 'Wear and Pay.'

India's Axis Bank has rolled out a range of wearable devices for contact less payment transactions. Customers can use payment bands, key fobs, or loops to make payments on the go. The Indian market has widespread usage of QR code-based payment systems. It will be interesting to see wider adoption of wearable-based payment systems in INDIA.

Robinhood plans to increase crypto services.

Robinhood,online brokerage firm,plans to expand its cryptocurrency trading operations and also plans to add new coins to its platform.

"We want to make a huge investment and hire a ton of people," said Robinhood,CEO Vlad Tenev,

Venture and IPO

• BNY Mellon invests in Fireblocks : Bank of New York Mellon Corp, one of America's oldest banks, invests in Fireblocks, a new startup that builds tools for the secure storage and transfer of bitcoin and other cryptocurrencies. BNY last month had expressed interest in participating in new fintech trends, especially in cryptocurrencies. Current investment is well-aligned with that vision.
• OpenSea, a New York-based NFT marketplace,  raises $23m in Series A funding.
• Pollinate, London based cloud banking startup, raised $50m in Series C funding.
• Kuda, a Nigeria-based challenger bank, raised $25m in Series A funding.
• Plaid, the financial technology startup , is raising about $600m with a valuation of around $10-$15 Billion.
• Policybazaar, an India-based lending marketplace and digital insurer raised $75m in new funding.
• Payfit, France-based payroll and HR software startup raised $107m in Series D funding.
• Republic, a New York-based investment platform, raised $36m in Series A funding.
• Vega Protocol, a Gibraltar-based decentralized derivatives trading protocol, raised $5 million in new funding.
• Leap finance, San Francisco, and Bangalore-based financing platform for Indian students studying abroad raised $17m in Series B funding.

"Students from India take admission in over 5,000 schools and universities abroad each year to study tens of thousands of courses.So the choice spectrum is really, really wide and you need experts who can help you make the right choice. This is the most important decision you or your family will make"-Vaibhav Singh, co-founder of Leap

• Coalition, San Francisco-based cyber risk insurance platform, raised $175m in Series D funding.
• Trullion, a New York-based financial workflow automation platform, raised $3.5m in Seed funding.
• Gatsby, a New York-based stock and options trading app, raised $10m in Series A funding.
• etoro, a Social investment network and rival to Robinhood, aims to go public by a $10.4Billion SPAC merger.
• Herasoft, Oklahoma based blockchain startup focused on cybersecurity, raised $5m in Series A funding.

“We focus on helping make governments and private enterprises really have trusted software and trusted communications,” Anthem Blanchard,CEO Herasoft

DepositLink, electronic payments for residential real estate transactions company, announced $3.5Million in the seed round.

"We set out to build the most secure and robust payments platform for the residential real estate business and the response has been incredible," . "This capital raise will allow us to increase capacity to manage our growth and continue to develop features that are making real estate companies and title companies more efficient and more profitable."-  Jay Rooney , CEO & Founder of DepositLink

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