Fintech Newsletter for 4/10/21
Below are news related to fintech industry this week.
Instacart and DoorDash are considering launching their credit cards.
Co-branded credit cards are a way for issuing banks to distribute more credit cards and increase revenue through partnerships. Both Instacart and DoorDash have seen their incomes increase by the unforeseen demand generated by the lockdown. Post lockdown, it will be interesting to observe if both the companies will sustain the lockdown level growth rates. In the meanwhile, both companies are in talks with banks to issue co-branded credit cards. The journal has reported Instacart will be partnering with J.P.Morgan Chase and Co to give rewards-based credit cards. Instacart card is likely to be launched next year. However, DoorDash is still accepting bids from different banks and has not made any public announcement on the issuing bank. Such new partnerships will provide a promising avenue for issuing banks to diversify their co-branding to different market segments. Historically such collaborations are mostly tied with airline, hotels, and retail industry verticals.
Coinbase announces estimated Q1 2021 earnings.
Coinbase, a secure online platform for buying, selling, transferring, and storing digital currency, is expected to be listed in NASDAQ next week. Ahead of its listing, the company released its Q1 earnings results.
Coinbase reported revenue of $1.8billion with Net Income between $730m -$800m. Coinbase disclosed they have 56 million users with 6.1 monthly transacting users (M.T.U ) and quarterly trading volumes of $335Billion
"When people think of crypto, the first thing that comes to mind is Bitcoin. Bitcoin is critical to the cryptoeconomy, but it's just the beginning. In recent years, we have expanded to be much more than a place to buy and sell Bitcoin. We are innovating and creating new products and services to get more people and institutions into the crypto economy and to help our ecosystem partners and developers grow their offerings." - Brian Armstrong, co-founder and Chief Executive Officer Coinbase.
Walmart invests in a Fintech startup.
Earlier this year, Walmart had expressed interest to enter the red hot fintech space. Bloomberg News reported earlier this week, based on the filling done with the U.S. trademarks office, the new venture is called 'Hazale by Walmart'. The filling also hints that the venture will likely provide a whole slew of financial services ranging from mobile payments, tax preparation, issuing credit cards to financial consulting service.
"Fintech is here to stay."
Our Jan newsletter highlighted that J.P.Morgan CEO mentioned about the competition from the fintech companies in its quarterly earnings call. In his annual letter to shareholders released earlier this week, he further emphasized the competition from fintech and "big tech" to traditional banks. However, he also noted the tech firms would face competition among each other and from conventional banks, and alluded that the regulatory environment may incorporate some barriers to entry.
"Fintech and Big Tech are here…big time! .
Fintech companies here and worldwide are making great strides in building both digital and physical banking products and services. From loans to payment systems to investing, they have done a great job in developing easy-to-use, intuitive, fast, and smart products. We have spoken about this for years, but this competition now is everywhere. Fintech's ability to merge social media, use data smartly and integrate with other platforms rapidly (often without the disadvantages of being an actual bank) will help these companies win significant market share. Importantly, Big Tech (Amazon, Apple, Facebook, Google – and, as I said, now I'd include Walmart) is here, too.
Their strengths are extraordinary, with ubiquitous platforms and endless data. At a minimum, they will all embed payments systems within their ecosystems and create a marketplace of bank products and services. Some may create exclusive white label banking relationships, and it is possible some will use various banking licenses to do it directly.
Though their strengths may be substantial, Big Tech companies do have some issues to deal with that may, in fact, slow them down. Their regulatory environment, globally, is heating up, and they will have to confront major issues in the future (banks have faced similar scrutiny)" - Jamie Dimon - CEO, JPMorgan
Sweden completes phase1 of digital currency testing.
Riksbank, the Swedish central bank, has been conducting a study on launching central bank digital currency (CBDC). The project is called e-korna . Riksbank cites a rapid decline in the use of physical cash as a "potential problem." With the inroad of decentralized finance(DeFi), central banks worldwide will face a massive challenge in the coming years. The use of CBDC will likely help in international money flow and economic regulation. Riksbank is planning to start phase 2, which includes involving other components in the financial ecosystem such as commercial banks and payment services and test out pilot project is commercial and retail applications.
Signal adds a new payments feature.
Signal , privacy centric-encrypted communication app, received recent support from Elon Musk, CEO of Tesla and Space X, and Jack Dorsey, CEO of Twitter. The endorsements have increased the usage of Signal app . Earlier this week, Signal announced that it has integrated with privacy-centric cryptocurrency "Mobilecoin," and the feature is available only in U.K.With this feature, Signal users can make payments to one another. Only the sender and receiver will be able to track the transaction, unlike traditional payments, where a bank will also record the transaction.
"There's a palpable difference in the feeling of what it's like to communicate over Signal, knowing you're not being watched or listened to, versus other communication platforms," "I would like to get to a world where not only can you feel that when you talk to your therapist over Signal, but also when you pay your therapist for the session over Signal."-Moxie Marlinspike, the creator of Signal and CEO.
Clubhouse partners with stripe to send money directly to creators.
Clubhouse, the latest trendy social media app that focuses only on Audio, announced a new feature where the Clubhouse creators can get paid. Monetization for content creators was one of the gaps in the Clubhouse.
Venture and IPO
- Dclimate, a New York-based decentralized network for climate data, raised $3.5m in seed funding.
- Orun, a New York-based platform for financial institutions to move money in real-time, raised $21M in series A funding.
- Finary, San Francisco-based social investing platform, raised $3.2m in seed funding.
- Nuvovargo, a New York-based U.S. and Mexico trade startup, raised $12m in Series A funding.
- TipRanks, an Israel-based stock research platform, raised $77m in Series B funding.
- TrueLayer, London based open banking platform, raised $70m in Series D funding.
- Ramp, a New York-based corporate digital cards and spend management platform, raised $115m in Series B funding.
- Bluedot, an Israel-based business tax account startup, raised $32m in new funding.
- Groww, India based investment app, raised $83m in Series D funding. -- Expand.
- OneStream, a Michigan-based corporate performance management software, raised $200m in series B funding.
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