Mythical Games raises $75M to build an NFT game engine

Even as NFT sales dip below their most speculative highs, startups aiming to tap into their potential are still scoring big funding rounds from investors who believe there’s much more to crypto collectibles than the past few months of hype.

Mythical Games, an NFT games startup based out of Los Angeles, has banked a $75 million raise from new and existing investors betting on the startup’s aim to expand the ambitions of their first title and locate a substantial platform opportunity amid helping developers build blockchain-based gaming experiences.

The round was led by WestCap. Existing investors were joined by 01 Advisors, Bilibili, Gary Vaynerchuk, the Glazer family, Moore Capital, and Redbird Capital in the Series B funding. The startup has raised a whopping $120 million to date.

The company has been building a title called Blankos Block Party that seems to be Fall Guys meets Roblox meets Funko Pop. The PC game capitalizes on a number of big social gaming trends around user-created content, while adding in a marketplace where users can buy avatar figures and accessories crafted by a variety of artists and designers that Mythical has partnered with. Users can buy or sell the limited run or open edition items through their marketplace. Unlike some other NFT platforms, the goods live on a private blockchain so they can’t be re-sold on public marketplace platforms like OpenSea.

Mythical Games is part of a growing movement to bring blockchain-based game mechanics mainstream while leaving behind elements of crypto platforms that are seen as less ready for primetime. Users can purchase avatars on the platform with cryptocurrency through BitPay but they can also pay with a credit card. Users don’t need to walk through the mechanics of setting up a wallet or writing down a seed phrase either.

While the company has big hopes for Blankos as it onboards more users, the bigger investor opportunity is likely in the game engine that the team is building. The startup’s “Mythical Economic Engine” is being designed to help budding game builders create NFT-based marketplaces that won’t get them in any regulatory trouble, marrying compliance across geographies and tools that help creators comply with anti-money laundering laws and know-your-customer frameworks.

“With any new market like [NFTs], it goes through all these different cycles,” Mythical Games CEO John Linden tells TechCrunch. “We think this will actually change gaming for the long haul. The more we talk to game studios, we’re finding more and more potential use cases.”

#advisors, #articles, #bilibili, #bitpay, #blockchain, #ceo, #computing, #cryptocurrencies, #cryptocurrency, #decentralization, #financial-technology, #funko, #gary-vaynerchuk, #los-angeles, #roblox, #tc, #technology, #westcap

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Tiger Global leads $30M investment into Briq, a fintech for the construction industry

Briq, which has developed a fintech platform used by the construction industry,  has raised $30 million dollars in a Series B funding round led by Tiger Global Management.

The financing is among the largest Series B fundraises by a construction software startup, according to the company, and brings Briq’s total raised to $43 million since its January 2018 inception. Existing backers Eniac Ventures and Blackhorn Ventures also participated in the round.

Briq CEO and co-founder Bassem Hamdy is a former executive at construction tech giant Procore (which recently went public and has a market cap of $10.4 billion) Canadian software giant CMIC. Wall Street veteran Ron Goldshmidt is co-founder and COO.

Briq describes its offering as a financial planning and workflow automation platform that “drastically reduces” the time to run critical financial processes, while increasing the accuracy of forecasts and financial plans.

Briq has developed a toolbox of proprietary technology that it says allows it to extract and manipulate financial data without the use of APIs. It also has developed construction-specific data models that allows it to build out projections and create models of how much a project might cost, and how much could conceivably be made. Currently, Briq manages or forecasts about $30 billion in construction volume.

Specifically, Briq has two main offerings: Briq’s Corporate Performance Management (CPM) platform, which models financial outcomes at the project and corporate level and BriqCash, a construction-specific banking platform for managing invoices and payments. 

Put simply, Briq aims to allow contractors “to go from plan to pay” in one platform with the goal of solving the age-old problem of construction projects (very often) going over budget. Its longer-term, ambitious mission is to “manage 80% of the money workflows in construction within 10 years.”

The company’s strategy, so far, seems to be working.

From January 2020 to today, ARR has climbed by 200%, according to Hamdy. Briq currently has about 100 employees, compared to 35 a year ago.

Briq has 150 customers, and serves general and specialty contractors from $10 million to $1 billion in revenue.  They include Cafco Construction Management, WestCor Companies and Choate Construction and Harper Construction. The company is currently focused on contractors in North America but does have long-term plans to address larger international markets, Hamdy told TechCrunch.  

Some context

Hamdy came up with the idea for Santa Barbara, California-based Briq after realizing the vast amount of inefficiencies on the financial side of the construction industry. His goal was to do for construction financials what Procore did to document management, and PlanGrid to construction drawing. He started Briq with his own cash, amassed through secondary sales as Procore climbed the ranks of startups to become a construction industry unicorn.

Briq CEO and co-founder Bassem Hamdy

“I wanted to figure out how to bring the best of fintech into a construction industry that really guesses every month what the financial outcomes are for projects,” Hamdy told me at the time of the company’s last raise – a $10 million Series A led by Blackhorn Ventures announced in May of 2020. “Getting a handle on financial outcomes is really hard. The vast majority of the time, the forecasted cost to completion is plain wrong. By a lot.”

In fact, according to McKinsey, an astounding 80 percent of projects run over budget, resulting in significant waste and profit loss.

So at the end of a project, contractors often find themselves having doled out more money and resources than originally planned. This can lead to negative cash flow and profit loss. Briq’s platform aims to help contractors identify outliers, and which projects are more at risk.

Throughout the COVID-19 pandemic, Briq has proven to be “extremely valuable” to contractors, Hamdy said.

“In an industry where margins are so thin, we have given contractors the ability to truly understand where they stand on cash, profit and labor,” he added.

#articles, #blackhorn-ventures, #briq, #california, #construction, #construction-software, #construction-tech, #economy, #eniac-ventures, #executive, #finance, #financial-technology, #fintech, #funding, #fundings-exits, #mckinsey, #north-america, #plangrid, #procore, #recent-funding, #saas, #startups, #tiger-global-management, #venture-capital

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Synctera raises $33M Series A to pair fintechs with banks

Synctera, which aims to serve as a matchmaker for community banks and fintechs, has raised $33 million in a Series A round of funding led by Fin VC.

The raise comes just under six months after the fintech raised $12.4 million in a seed round of funding.

New investors Mastercard and Gaingels also participated in the latest round, which included follow-on investments from Lightspeed Venture Partners, Diagram Ventures, SciFi Ventures and Scribble Ventures. Several angel investors put money in the Series A including Omri Dahan, Marqeta’s Chief Revenue Officer, Feedzai Chairman and CEO Nuno Sebastiao and Greenlight co-founder and CEO Tim Sheehan. 

Alongside the Series A, Synctera is also announcing its commitment to the new Cap Table Coalition – which includes funding from Gaingels, Neythri Futures Fund, Plexo Capital and over 20 angels – alongside other startups by allocating 10% of all funding rounds to “traditionally marginalized,” or underrepresented, investors via an SPV. (Fellow fintech Finix led the initiative earlier this year before forming this coalition but more on that later).

“This has exposed us to find great folks who we otherwise might not have known,” said Synctera’s co-founder and CEO Peter Hazlehurst. “That’s why we pledge to reserve 10% of this round and all future rounds to diverse investors.”

In a nutshell, San Francisco-based Synctera has developed a platform designed to help facilitate partnership banking. It was founded on the premise that some community banks and credit unions are actually turning down deals with young fintechs because the relationships can be too complicated or time-consuming to manage. Synctera’s goal is to connect community banks and fintechs to streamline the process with its “Banking-as-a-Service” (BaaS) platform.

TechCrunch recently caught up with Hazlehurst, who most recently served as former head of Uber Money and previously also led development of Google Wallet and products related to its payments system.

Put simply, Synctera wants to make it easier for community banks and fintechs to partner with each other. It examines banks’ needs and then sets them up with a fintech that is best suited to meet those needs. It claims to “do the work for both parties,” managing the partnership from its back-end platform, while dealing with issues like regulatory compliance, which can be a deterrent for some companies. The process of managing, reconciling and billing banks can result in “a lot of operational overhead and complexity,” according to the company.

The company says it’s built a “diverse” marketplace of banks and fintech companies so that it can apply a “personalized touch to each match” and make sure that the parties “align on geography, brand ethos, and desired business goals.”

So far, Synctera has signed three banks with plans to sign on three more this month. The startup has already paired Coastal Community Bank – a local bank serving the greater Puget Sound community – with One, a new digital banking platform, and Ellevest, a new fintech. 

By using Synctera’s platform, the company claims, banks can more freely allow their fintech counterparts to offer FDIC-insured mobile checking, debit cards, savings accounts or innovations in payments to their prospective customers, the company claims. They can also make more money doing so, Hazlehurst said, by bringing in more revenue beyond interchange fees.

“Like most small businesses, community banks have been hit hard by COVID-19,” he added. “We hope to further diversify community banks’ revenue streams.”

Banks can also more easily manage multiple relationships with various fintechs as the companies agree to adopt Synctera’s tech stack, the company claims.

“We build a single dashboard for a bank, so there’s a consolidated position across all fintechs,” Hazlehurst told me at the time of the company’s last raise. “It’s all about visibility for the bank.”

Currently Synctera has about 50 employees, including about two dozen engineers, most of whom are located in Canada, Hazlehurst said. The company plans to ramp up to 160 employees by year’s end with a focus on engineering, sales, marketing and customer success staff.

Looking ahead, Hazlehurst predicts that the fourth quarter will be “all about support for small business fintechs.”

“We want to create a neobank for gig economy workers, and want to add lending as a service,” he said. “But our next big phase is to onboard a lot of fintechs, and learn from them.”

Logan Allin, managing general partner and founder at Fin VC, believes that Banking-as-a-Service in general will transform legacy national and regional banks, credit unions, fintecs, corporate tech and retailers alike “as these players either seek to vertically integrate financial services or accelerate their digitization process.”

Synctera, he adds, has taken an approach with its tech stack that allows for integration with legacy community banks and their respective cores. This, Allin believes, will help ensure a “cloud native and scalable model” and made it an attractive investment. (Fin VC has also backed the likes of other fintechs such as Pipe and SoFi).

“Synctera’s peers are simply abstracting bank cores and serving as ‘API wrappers’ in a kludgy short-term approach and having come from the legacy bank and modern fintech worlds, we recognized that these players had not built sufficiently strong bridges across the ecosystem,” Allin told TechCrunch.

For his part, Finix Founder Richie Serna is thrilled that other startups are following his lead in the pledge to make their cap tables more diverse.

“After Finix announced our special purpose vehicle for Black and Latinx investors, the response was overwhelmingly positive,” he told TechCrunch. “Startups in every sector and at every stage have asked us how to recreate our SPV. In response, we started the Cap Table Coalition to make it as easy as possible for more high-growth startups, like Synctera, to take control over their cap tables,” said Richie Serna, CEO and co-founder of Finix. “We see this as an inflection point that will completely upend how the VC world functions.”

Meanwhile, Synctera is not the only player trying to help banks and fintechs forge partnerships. Last week, TechCrunch reported on Visa said it has expanded its Visa Fintech Partner Connect program, which is designed to help financial institutions quickly connect with a “vetted and curated” set of technology providers. 

#api, #articles, #bank, #banking-as-a-service, #canada, #diversity, #economy, #fdic, #finance, #financial-services, #financial-technology, #finix, #fintech, #founder, #funding, #fundings-exits, #google, #greenlight, #head, #lightspeed-venture-partners, #marqeta, #mastercard, #peter-hazlehurst, #player, #plexo-capital, #recent-funding, #richie-serna, #san-francisco, #startup, #startups, #uber, #venture-capital

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Brazil’s idwall raises $38M for identity validation platform

Online fraud and identity theft is a global problem that has only been exacerbated with increased online transactions amid the COVID-19 pandemic. In particular, it is estimated that Brazilian companies lose over $41 billion due to fraud every year.

In an attempt to tackle this problem head on, Lincoln Ando and Raphael Melo started idwall in mid-2016. São Paulo-based idwall started as an automated background check solution and has since grown into a suite of data and identity validation and risk analysis products. For the consumer market, its “MeuID” app is aimed at users who want to change the way they identify themselves and share their data.

And now the Brazilian regtech has raised $38 million in a Series C round led by Endurance.

GGV Capital, monashees, Canary, Qualcomm Ventures, ONEVC, Peninsula and Norte also participated in the funding, bringing its total raised to nearly $50 million.

The company says it has grown 1,458% between 2017 and 2020, with average growth of 144% per year. Its more than 300 clients include 10 unicorns, two out of the three biggest banks in Brazil and companies such as iFood, Claro, Cielo, Loggi, Ebanx, QuintoAndar and OLX, among others.

Fintechs make up a significant portion of its client base, and in 2020, the company saw its revenue from clients in the financial industry alone climb by 588% compared to 2019.

Idwall uses machine learning and AI to automate the onboarding process via its face match, background check, risk analysis, ID validation and automated optical character recognition (OCR) offerings to help companies avoid fraud.

The company said its APIs verify personal documents and information by searching in public and private databases “quickly and pursuant to the compliance rules.” Idwall does all this by first validating that an ID is authentic. Then it works to ensure the person using it is actually the owner of the ID. And lastly, it runs a full background check. It claims it does all this in less than three minutes.

“We help them do all these onboarding processes in a safer, better and faster way,” said idwall co-founder and CEO Ando.

Over the years, idwall has generated more than 65 million data reports for its clients, a number that it says surged by 5,000 times between 2017 and 2020.Those reports, it claims, have helped its clients scale their operations, register more of their own clients and optimize compliance and KYC processes, as well as reduce fraud.

Image Credits: idwall

In general, the pandemic’s drive to digital led to a massive increase in the number of digital bank accounts, mobile payment services and also of companies adjusting to digital platforms and/or expanding their digital operations — leading to a boom in business for idwall.

“The more digitized companies become, the more client expectations grow — and market competition grows stronger,” Ando said. “Our mission is to always stay ahead of innovation in our market, and that’s why we invest so much in growth and in building the best possible team to develop our products.”

Part of that includes using its new capital to recruit more developers, strengthen its existing products and release new ones. Idwall plans to increase its headcount from its current 200 to about 300 over the next few months. The company is also examining the possibility of expanding outside of Brazil to all of Latin America. 

“Many of the identity validation and fraud problems faced in Brazil are seen in other Latin American countries as well,” Ando said. “Besides, places like Mexico and Colombia also have highly innovative companies pushing the envelope when it comes to identity and technology. We still have a lot to achieve in Brazil, but we see a big opportunity for us to take our mission even further.”

Still, in its home country, recent regulatory changes in Brazil in recent years have also led to an increase in demand for idwall’s offerings.

In addition, Brazil’s documentation databases are highly siloed, the company says, with each state having its own model for the most common identity document, the RG (“Registro Geral” or “General Registry”). Plus, each citizen can be issued a different RG document in each state.

“It’s undeniable how much digital onboarding and automated identity validation processes are fundamental for the Latin American market to reach as far as it has the potential to,” Ando said. “It’s extremely difficult to understand and validate identification and personal data in Brazil.”

Also, in general, the company has observed how weary Brazilians are of having to show their IDs for routine events. Idwall helps with that via its aforementioned “MeuID” solution, which stores in a single wallet all the documents necessary for the onboarding processes of fintechs, startups, office buildings and other businesses.

Its investors are, naturally, bullish.

Hans Tung, GGV Capital’s managing partner, describes idwall as a “one-of-a-kind” startup. 

“idwall is leading the discussions and innovations in Brazil regarding digital onboarding and identity validation,” he said. “And their B2C digital identity app MeuID could be the first true super-app in Latin America.”

GGV aims to invest in category leaders that are using technology to create positive impact for its users and for society, Tung added.

“The idwall founders are tackling a huge yet underserved problem in Brazil, and have led the company through terrific growth,” he said. “They have the ingredients to become the leading personal data platform in LatAm for the enterprise.”

Marcos Toledo, managing partner at Canary, notes that idwall was one of his firm’s first investments.

“Lincoln and Raphael’s abilities to build and scale a business solving a very relevant problem in Brazil have caught our attention,” he told TechCrunch. “Their culture, tech level and agility as a company also are very remarkable in the Brazilian market.”

#artificial-intelligence, #brazil, #canary, #colombia, #digital-identity, #ebanx, #economy, #endurance, #finance, #financial-technology, #funding, #fundings-exits, #ggv-capital, #hans-tung, #identity-management, #identity-theft, #identity-verification, #idwall, #ifood, #latin-america, #machine-learning, #managing-partner, #mexico, #ocr, #olx, #onboarding, #online-fraud, #optical-character-recognition, #qualcomm-ventures, #quintoandar, #recent-funding, #regtech, #sao-paulo, #startup, #startups, #tc, #venture-capital

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Extra Crunch roundup: first-check myths, Miami relocation checklist, standout SaaSy startups

This may seem like a great time to launch a SaaS startup, but the landscape is crowded with well-designed applications that promise “blazingly fast and delightfully simple” experiences, according to seed-stage investor John Chen of Fika Ventures.

Most SaaS startups will fail, but not because of a sour marketing campaign or server downtime. The majority of these companies will fall victim to what Chen calls “the myth of frictionless onboarding.”

Despite the hype about ease of use, enterprise companies always ask customers to abandon familiar tools so they can learn something new.

“Just like with a new fitness program, participants feel good after completing the workout, but it takes a lot of activation energy to start and hard work to get there,” Chen notes.


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Instead of putting the onus on customers to roll up their sleeves, he suggests that SaaS startups learn from cryptocurrency culture and find ways to “incentivize users to do the necessary work to have the right experience.”

But how do you encourage users to put in the time and effort required to produce an optimal customer experience?

“In a world where there is a surplus of alternatives for every job to be done, the scarce resource is not content, tooling, or hacks and tricks,” says Chen. “It’s attention.”

We’re off on Monday, May 31 in observance of Memorial Day; I hope you have a relaxing weekend!

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist

Dismantling the myths around raising your first check

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Image Credits: Klaus Vedfelt (opens in a new window) / Getty Images

As startups and venture capital grow in tandem, fundraising has gone from a formal affair on Sand Hill Road to a process that can happen anywhere from Twitter to Zoom.

While fundraising may no longer require a trip to California, it might depend on whether you got an invite to a private audio app. And while you may not need to be an insider, second-time founders — largely male and white — still have a competitive advantage.

The growing complexity of fundraising has the opportunity to make tech either inclusive or exclusive.

VC is the flashy gold medal, but the rapid growth of emerging fund managers means that a first check can be piecemealed together from a variety of different sources. The options for financing are seemingly endless: syndicates, public crowdfunding, VC firms, accelerators, debt financing, rolling funds, and, for the profitable few, bootstrapping.

Doximity’s S-1 may explain why healthcare exits are heating up

Telehealth startup Doximity filed to go public earlier today. Notably, the company has not fundraised since 2014, a year in which it attracted just under $82 million at a valuation of $355 million, per PitchBook data.

How has it managed to not raise money for so long? By generating lots of cash and profit over the years. Healthtech communications, it turns out, can be a lucrative endeavor.

What Vimeo’s growth, profits and value tell us about the online video market

Image Credits: Avishek Das/SOPA Images/LightRocket via Getty Images

The spin-out of video platform Vimeo from IAC completed this week, and the smaller company is now trading as an independent entity under the ticker ‘VMEO’.

If you missed the news that the internet conglomerate was spinning out the video service, don’t feel bad; it slipped past many radars. But with the company now trading, our access to its historical results, and our minds still enthralled by YouTube’s recent financial performance for Alphabet, it’s worth taking a moment to digest the company’s health.

Flywire’s flotation suggests the IPO slowdown is behind us

The Flywire IPO is neat from a financial perspective and notable in that it’s a Boston exit as opposed to yet another New York or San Francisco-based flotation. It’s nice to see some other cities put points on the board.

But more than that, this IPO is a useful measuring stick for keeping tabs on the IPO market as a whole. This year and the last are shaping up to be key exit periods for startups and unicorns of all shapes and sizes; many a venture capital fund return rests on these public debuts.

Dear Sophie: Any unique immigration strategies for quick hiring?

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Image Credits: Bryce Durbin/TechCrunch

Dear Sophie,

I do recruitment for tech startups. With a surge of VC investing, many startups are urgently hiring.

Which visas offer the quickest options for international talent? Are there any unique strategies that you would recommend we explore?

— Maverick in Milpitas

7 questions to ask before relocating your startup to Florida

a photo of an art deco style building in Miami with pastel gradient colors

Image Credits: Artur Debat (opens in a new window) / Getty Images

Cities like Miami, Pittsburgh and Austin have been drawing talent and wealth from Silicon Valley for years, but the COVID-19 pandemic accelerated the trend.

In recent months, many investors and entrepreneurs have noisily departed for Miami, citing the region’s favorable business climate and quality of life.

It’s always good to consider one’s options, but before booking a moving van for the Sunshine State — or any emerging tech hub, for that matter — here are some basic questions entrepreneurs should ask themselves.

Vise CEO Samir Vasavada and Sequoia’s Shaun Maguire break down the art of the pitch

Image Credits: Sequoia Capital / Wolfe + Von / TechCrunch

In just a few short years, Vise has gone from launching on the Disrupt Battlefield stage to a unicorn. Co-founders Samir Vasavada and Runik Mehrotra met Sequoia’s Shaun Maguire at an after-party at the event, and Maguire ended up leading a seed and Series A round while Sequoia led the Series B.

Last week, Vise raised its Series C of $65 million and was officially valued at $1 billion post-money.

We spoke to the pair about the early fundraising process for Vise, what Vasavada has learned about delivering a good fundraising pitch, and what stood out about the pitch and the product for Maguire.

Acorns’ SPAC listing depicts a consumer fintech business with a SaaSy revenue mix

Another day, another unicorn public offering.

On Thursday, it was Acorns, a consumer fintech service that blends saving and investing into a freemium product.

Acorns fits inside the larger savings-and-investing boom seen over the last four or five quarters as consumers buffeted by the economic changes brought on by COVID-19 turned to stashing cash and boosting their equities investing cadence.

By now this is old news, but we haven’t had a clear picture of the economics of consumer fintech startups accelerated by the pandemic. Now that Acorns has decided to list via a SPAC — more on that in a moment — we do.

Poor onboarding is the enemy of good hiring

Image of a person talking to two colleagues via videoconferencing.

Image Credits: Olga Strelnikova (opens in a new window) / Getty Images

The world of hybrid work is here, and the usual 10-minute intro call, swag bag and first-day team lunch are just not enough to make your new employee feel welcome.

While many companies have found a way to interview and select candidates in a fully remote environment, few have spent time and resources on aligning the “pre-boarding” and onboarding process for the new hybrid world of work. Many employers still rely on old ways of welcoming new hires, despite our totally changed work environment.

It’s important to capitalize on candidates’ enthusiasm and eagerness from the moment the offer is signed instead of when they log in on Day One, because first impressions can make or break a candidate’s chances of staying at a company.

 

#ecommerce, #extra-crunch-roundup, #fika-ventures, #finance, #financial-technology, #flywire, #healthtech, #hiring, #john-chen, #miami, #newsletters, #runik-mehrotra, #saas, #samir-vasavada, #sequoia-capital, #shaun-maguire, #startups, #tc, #venture-capital, #vimeo

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African fintech OPay is reportedly raising $400M at over $1.5B valuation

Chinese-backed and Africa-focused fintech platform OPay is in talks to raise up to $400 million, The Information reported today. The fundraising will be coming two years after OPay announced two funding rounds in 2019 — $50 million in June and $120 million Series B in November.

The $170 million raised so far comes from mainly Chinese investors who have begun to bet big on Africa over the past few years. Some of them include SoftBank, Sequoia Capital China, IDG Capital, SoftBank Ventures Asia, GSR Ventures, Source Code Capital.

In 2018, Opera, popularly known for its internet search engine and browser, launched the OPay mobile money platform in Lagos. It didn’t take long for the company to expand aggressively within the city using ORide, a now-defunct ride-hailing service, as an entry point to the array of services it wanted to offer. The company has tested several verticals — OBus, a bus-booking platform (also defunct); OExpress, a logistics delivery service; OTrade, a B2B e-commerce platform; OFood, a food delivery service, among others.

While none of these services has significantly scaled, OPay’s fintech and mobile money arm (which is its main play) is thriving. This year, its parent company Opera reported that OPay’s monthly transactions grew 4.5x last year to over $2 billion in December. OPay also claims to process about 80% of bank transfers among mobile money operators in Nigeria and 20% of the country’s non-merchant point of sales transactions.Last year, the company also said it acquired an international money transfer license with a partnership with WorldRemit also in the works.

It’s quite surprising that none of OPay’s plans to expand to South Africa and Kenya (countries it expressed interest in during its Series B) has come to fruition despite its large raises. The company blamed the pandemic for these shortcomings. However, earlier this year, the country set up shop in North Africa by expanding to Egypt. This next raise, likely a Series C, will be instrumental in the company’s quest for expansion, both geographically and product offerings. Per The Information, OPay’s valuation will increase to about $1.5 billion, three times its valuation in 2019.

We reached out to OPay, but they declined to comment on the story.

#africa, #china, #egypt, #finance, #financial-technology, #funding, #kenya, #lagos, #nigeria, #north-africa, #opay, #opera, #oride, #payments, #sequoia-capital-china, #softbank-group, #startups, #tc, #worldremit

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Visa takes a swipe in fintech, builds new online marketplace

The relationships between banks and fintechs are multi-faceted.

In some cases, they partner. In many cases, they compete. In other cases, one acquires or invests in the other.

Well, today, an announcement by global payments giant Visa is aimed at helping facilitate banks and fintechs’ ability to work together.

Specifically, Visa said today it has expanded its Visa Fintech Partner Connect, a program designed to help financial institutions quickly connect with a “vetted and curated” set of technology providers. 

I talked with Terry Angelos, senior vice president and global head of fintech at Visa, to understand just exactly what that means.

“Global fintech investment last year was $105 billion,” Angelos said. “There were about 2,861 deals in venture, PE and M&A. So literally over $100 billion is going into fintech, which is more than the combined tech budgets of every bank in the U.S. As a result, a lot of innovation that is occurring in fintech is funded by venture dollars. We’re trying to bring that innovation to our clients, whether they are banks, processors or other fintechs.”

The program initially launched in Europe in November of 2020, and now is available in the U.S., Asia Pacific, Latin American and CEMEA (Central Europe, Middle East and Africa). Visa has worked to identify fintechs that can help banks and financial institutions (that are clients of Visa’s) as well as other fintechs “create digital-first experiences, without the cost and complexity of building the back-end technology in-house.

Local teams will run programs in the respective regions, and vet and manage partners in the following categories: account opening, data aggregation, analytics and security, customer engagement and new cardholder services and operations and compliance.

So far, Visa has identified about 60 partners that offer a range of technologies — from back-office functions to new front-end services, according to Angelos. Those partners include Alloy, Jumio, Argyle, Fidel, FirstSource, TravelBank, Canopy, Hummingbird and Unit21, among others. Twenty-four are located in the U.S.

“So much of fintech focus and coverage is about disrupting existing banks. Everyone is trying to disrupt everyone, including fintechs like PayPal,” Angelos told TechCrunch. “Venture numbers are certainly very large. What we’re realizing is there is a significant opportunity to pair up a lot of venture-backed companies with our existing clients. It runs a little bit against us versus them approach you typically hear about.”

Visa clients can get in touch with program partners via the Visa Partner website and get benefits such as reduced implementation fees and pricing discounts. 

“The Fintech Connect program is about both helping to identify and curate interesting fintech companies and then create a favorable commercial partnership for our clients so they can engage with these Fintech Connect partners,” Angelos said.

So, what does Visa gain from all this?

“Our goal is that all of our clients are in a position to build better digital experiences for their consumers,” he told TechCrunch. “We would love it if every bank had the latest tools in order to onboard clients and build digital experiences.”

One of its partners, for example, is virtual card startup Extend. 

“There are fintechs that provide this today such as TripActions, Ramp and Divvy,” Angelos points out. “But what Visa is doing is looking at ‘How can we enable our banking clients to do something similar?’ So we’re bringing innovation into our ecosystem so that anyone can take advantage.”

It can also help companies such as TripActions, Ramp or Divvy with other complementary technologies for security posture, for example.

“The net beneficiary is to hopefully move more spending onto those rails,” Angelos said. “For example, if you look at B2B spend, there’s about $120 trillion of it annually. We believe about $20 trillion of that is card eligible. Today, Visa captures about $1 trillion of that. So, another $19 trillion is available for Visa to capture through our partners if our banks and fintechs can build these kinds of solutions to enable B2B payments.”

To be clear, Visa also invests in startups from time to time. But this initiative is distinct from those efforts, although a couple of its partners have been recipients of funding from Visa.

#africa, #asia-pacific, #bank, #banking, #central-europe, #europe, #fidel, #finance, #financial-technology, #fintech, #jumio, #middle-east, #money, #payment-cards, #payments, #paypal, #ramp, #startup, #startups, #tc, #travelbank, #tripactions, #united-states, #visa

0

Nigeria’s Mono raises millions to power the internet economy in Africa

In February, Nigerian fintech startup Mono announced its acceptance into Y Combinator and, at the time, it wanted to build the Plaid for Africa. Three months later, the startup has a different mission: to power the internet economy in Africa and has closed $2 million in seed investment towards that goal.

The investment comes nine months after the company raised $500,000 in pre-seed last September and two months after receiving $125,000 from YC. Mono’s total investment moves up to $2.625 million, and investors in this new round include Entrée Capital (one of the investors in Kuda’s seed round), Kuda co-founder and CEO Babs Ogundeyi; Gbenga Oyebode, partner at TCVP; and Eric Idiahi, co-founder and partner at Verod Capital. New York but Africa-based VC Lateral Capital also invested after taking part in Mono’s pre-seed.

In a region where more than half of the population is either unbanked or underbanked, open finance players like Mono are trying to improve financial inclusion and connectivity on the continent. Open finance thrives on the notion that access to a financial ecosystem via open APIs and new routes to move money, access financial information and make borrowing decisions reduces the barriers and costs of entry for the underbanked

Launched in August 2020, the company streamlines various financial data in a single API for companies and third-party developers. Mono allows them to retrieve information like account statements, real-time balance, historical transactions, income, expense and account owner identification with users’ consent.

When we covered the company early in the year, it had already secured partnerships with more than 16 financial institutions in Nigeria. In addition to having a little over a hundred businesses like Carbon, Aella Credit, Credpal, Renmoney, Autochek, and Inflow Finance access customers bank account for bank statements, identity data, and balances, Mono has also connected over 100,000 financial accounts for its partners and analysed over 66 million financial transactions so far.

Mono has done impressively well in a short period. While it appears to have figured out product-market fit, CEO Abdul Hassan is quick to remind everyone that the burgeoning API fintech space is just an entry point to its pursuit of being a data company — a case he also made in February.

“The way I see it, our market is not that big. Compare the payments market now with 2016, when Paystack and Flutterwave just started. The payments space in 2016 was very small and the number of people using cards online was very small,” said Hassan, who co-founded the company with Prakhar Singh. “It’s the same thing for us right now. That’s why our focus isn’t only on open banking but data. We’re thinking of how we can power the internet economy with data that isn’t necessarily financial data. For instance, think about open data for telcos. Imagine where you can move your data from one telco to another instead of getting a new SIM card and making a fresh registration. That’s where I see the market going, at least for us at Mono.” 

Abdul Hassan (CEO) and Prakhar Singh (CTO)

He adds that the company is taking an approach of building a product one step at a time until it can fully diversify from financial data offerings, including connecting with payment gateways (Paystack and Flutterwave) and other fintechs like wealth management startups Piggyvest and Cowrywise.

“When you’re able to connect to all the systems, a lot of use cases will come up. The first step is how can we connect to all available data and open it up for businesses and developers,” he continued.

Therefore, Mono will use the funding to reinforce its current financial and identity data offerings and launch new products for diverse business verticals. Also, a long-overdue pan-African expansion to Ghana and Kenya is top priority. The last time I spoke with Hassan, the end of Q1 looked feasible to get into at least one of the two markets but it didn’t turn out that way. But the wait seems to be over as the company said it’d be going live in Ghana next month with a handful of existing customers from Nigeria and new ones in Ghana. Some of these partners include five banks (GTBank, Fidelity Bank and three unannounced banks) and the mobile money service arm of MTN Ghana.

“Our expansion is mostly inspired by our customers looking to expand to other markets, same with some of our products. We work with our customers to give them the right tools to build new experiences for their customers,” Hassan stated

Mono

Image Credits: Mono

Mono is one of the three API fintech companies to have raised a seed investment this year. Last month, another Nigerian fintech Okra closed $3.5 million while Stitch, a South African API fintech, launched with $4 million in February. Back to back investments like this show that investors are incredibly optimistic about the market. Avil Eyal, managing partner and co-founder of Entrée Capital, one of such investors, had this to say.

“We are very excited to be working with Abdul, Prakhar and the entire Mono team as they continue to build out the rails for African banking to enable the delivery of financial services to hundreds of millions of people across the African continent.”

#africa, #banking, #finance, #financial-services, #financial-technology, #flutterwave, #funding, #internet-economy, #money, #mono, #new-york, #open-banking, #startups, #tc

0

US Treasury calls for stricter cryptocurrency rules, IRS reporting for transfers over $10K

President Biden’s vision for an empowered, expanded IRS is poised to have a big impact on cryptocurrency trading.

According to a new report from the U.S. Treasury Department, the administration wants to put new requirements in place that would make it easier for the government to see how money is moving around, including digital currencies. The report notes that cryptocurrencies pose a “significant detection problem” and are used regularly by top earners who wish to evade taxes.

The proposed changes would create new reporting requirements built on the framework of existing 1099-INT forms that taxpayers currently use to report interest earned. Cryptocurrency exchanges and custodians would be required to report more information on the “gross inflows and outflows” of money moving through their accounts. Businesses would also be required to report cryptocurrency transactions above $10,000 under the new reporting requirements.

“Although cryptocurrency is a small share of current business transactions, such comprehensive reporting is necessary to minimize the incentives and opportunity to shift income out of the new information reporting regime,” the report states.

The Treasury Department notes that wealthy tax filers are often able to escape paying fair taxes through complex schemes that the IRS currently doesn’t have the resources to disrupt. According to the report, the IRS collects 99 percent of taxes due on wages, but that number is estimated to be as low as 45 percent on non-labor income, a discrepancy that hugely benefits high earners with “less visible” income sources. The Treasury calls virtual currency, which has some reporting requirements but still operates mostly out of sight in regulatory grey areas, a particular challenge.

“These opportunities are particularly available for those in the top end of the income distribution who can avoid taxes through sophisticated strategies such as offshoring, creating complex partnership structures, or moving taxable assets into the crypto economy,” the Treasury report states.

The report details a multiyear effort to bolster IRS enforcement that would bring in as much as $700 billion in tax revenue over the next 10 years. The proposed changes, if implemented, would go into effect starting in 2023.

#biden, #cryptocurrency, #decentralization, #digital-currency, #financial-technology, #government, #internal-revenue-service, #tax, #tc

0

More funding flows into Pipe, as buzzy fintech raises $250M at a $2B valuation

At the end of March, TechCrunch reported that buzzy startup Pipe — which aims to be the “Nasdaq for revenue” — had raised $150 million in a round of funding that values the fintech at $2 billion.

Well, that deal has closed and in the end, Miami-based Pipe confirms that it has actually raised $250 million at a $2 billion valuation in a round that was “massively oversubscribed,” according to co-founder and co-CEO Harry Hurst.

“We had originally allocated $150 million for the round, but capped it at $250 million although we could have raised significantly more,” he told TechCrunch.

As we previously reported, Baltimore, Maryland-based Greenspring Associates led the round, which included participation from new investors Morgan Stanley’s Counterpoint Global, CreditEase FinTech Investment Fund, Horizon Capital, 3L and Japan’s SBI Investment. Existing backers such as Next47, Marc Benioff, Alexis Ohanian’s Seven Seven Six, MaC  Ventures and Republic also put money in the latest financing.

The investment comes about 2 ½ months after Pipe raised $50 million in “strategic equity funding” from a slew of high-profile investors such as Siemens’ Next47 and Jim Pallotta’s Raptor Group, Shopify, Slack, HubSpot, Okta and Social Capital’s Chamath Palihapitiya. With this latest round, Pipe has now raised about $316 million in total capital. The new funding was raised at “a significant step up in valuation” from the company’s last raise.

As a journalist who first covered Pipe when they raised $6 million in seed funding back in late February 2020, it’s been fascinating to watch the company’s rise. In fact, Pipe claims that its ability to achieve a $2 billion valuation in just under a year since its public launch in June of last year makes it the fastest fintech to reach this valuation in history. While I can’t substantiate that claim, I can say that its growth has indeed been swift and impressive.

Hurst, Josh Mangel and Zain Allarakhia founded Pipe in September 2019 with the mission of giving SaaS companies a way to get their revenue upfront, by pairing them with investors on a marketplace that pays a discounted rate for the annual value of those contracts. (Pipe describes its buy-side participants as “a vetted group of financial institutions and banks.”)

The goal of the platform is to offer companies with recurring revenue streams access to capital so they don’t dilute their ownership by accepting external capital or get forced to take out loans.

More than 4,000 companies have signed up on the Pipe trading platform since its public launch in June 2020, with just over 1,000 of those signing up since its March raise, according to Hurst. Tradable annual recurring revenue (ARR) on the Pipe platform is in excess of $1 billion and trending toward $2 billion, with tens of millions of dollars currently being traded every month. When I last talked to the company in March, it had reported tens of millions of dollars traded in all of the first quarter.

“Growth has been insane,” Hurst told TechCrunch. “This speaks to why we managed to raise at such a high valuation and attract so much investor interest.”

Image Credits: Pipe

Over time, Pipe’s platform has evolved to offer non-dilutive capital to non-SaaS companies as well. In fact, 25% of its customers are currently non-SaaS, according to Hurst — a number he expects to climb to over 50% by year’s end.

Examples of the types of businesses now using Pipe’s platform include property management companies, direct-to-consumer companies with subscription products, insurance brokerages, online pharmacies and even sports/entertainment-related organizations, Hurst said. Even VC firms are users.

“Any business with very predictable revenue streams is ripe for trading on our platform,” Hurst emphasizes. “We have unlocked the largest untapped asset class in the world.”

He emphasizes that what Pipe is offering is not debt or a loan.

“Other companies in this space are dealing in loans and they’re actually raising debt and giving companies money — like reselling debt,” Hurst said. “This is what differentiates us so massively.”

Pipe’s platform assesses a customer’s key metrics by integrating with its accounting, payment processing and banking systems. It then instantly rates the performance of the business and qualifies them for a trading limit. Trading limits currently range from $50,000 for smaller early-stage and bootstrapped companies to over $100 million for late-stage and publicly traded companies, although there is no cap on how large a trading limit can be.
Pipe has no cost of capital. Institutional investors compete against each other for deals on its platform. In return, Pipe charges both parties on each side of the transaction a fixed trading fee of up to 1%, depending on the volume.

The startup has been operating with a lean and mean strategy and has a current headcount of 34. Pipe plans to use its latest capital in part to double that number by year’s end.

“We haven’t actually spent a penny of our prior financing,” Hurst told TechCrunch. “But we’re seeing huge demand for the product globally, and across so many different verticals, so we’re going to use this capital to not only secure the future of business obviously but to continue to invest into growing all of these different verticals and kick off our global expansion.”

Image Credits: Pipe co-founder and co-CEO Harry Hurst / Pipe

Ashton Newhall, managing general partner of Greenspring Associates, described Pipe as “one of the fastest-growing companies” his firm has seen.

The startup, he added, is “addressing a very large TAM (total addressable market) with the potential to fundamentally shift the financial services landscape.”

In particular, Greenspring was drawn to Pipe’s alternative financing model.

“While there are many companies that service specific niches with traditional lending products, Pipe isn’t a lender,” Newhall told TechCrunch. “Rather, it’s a trading platform and does not actually raise any money to give to customers. Instead, Pipe connects customers directly with institutional investors to get the best possible pricing to trade their actual contracts in lieu of taking a loan.”

#alexis-ohanian, #baltimore, #chamath-palihapitiya, #creditease-fintech-investment-fund, #economy, #finance, #financial-technology, #fintech, #funding, #fundings-exits, #greenspring-associates, #hubspot, #japan, #mac-ventures, #marc-benioff, #maryland, #miami, #okta, #pipe, #raptor-group, #recent-funding, #saas, #sbi-investment, #shopify, #siemens, #social-capital, #startup, #startups, #venture-capital

0

Amount raises $99M at a $1B+ valuation to help banks better compete with fintechs

Amount, a company that provides technology to banks and financial institutions, has raised $99 million in a Series D funding round at a valuation of just over $1 billion.

WestCap, a growth equity firm founded by ex-Airbnb and Blackstone CFO Laurence Tosi, led the round. Hanaco Ventures, Goldman Sachs, Invus Opportunities and Barclays Principal Investments also participated.

Notably, the investment comes just over five months after Amount raised $86 million in a Series C round led by Goldman Sachs Growth at a valuation of $686 million. (The original raise was $81 million, but Barclays Principal Investments invested $5 million as part of a second close of the Series C round). And that round came just three months after the Chicago-based startup quietly raised $58 million in a Series B round in March. The latest funding brings Amount’s total capital raised to $243 million since it spun off from Avant — an online lender that has raised over $600 million in equity — in January of 2020.

So, what kind of technology does Amount provide? 

In simple terms, Amount’s mission is to help financial institutions “go digital in months — not years” and thus, better compete with fintech rivals. The company formed just before the pandemic hit. But as we have all seen, demand for the type of technology Amount has developed has only increased exponentially this year and last.

CEO Adam Hughes says Amount was spun out of Avant to provide enterprise software built specifically for the banking industry. It partners with banks and financial institutions to “rapidly digitize their financial infrastructure and compete in the retail lending and buy now, pay later sectors,” Hughes told TechCrunch.

Specifically, the 400-person company has built what it describes as “battle-tested” retail banking and point-of-sale technology that it claims accelerates digital transformation for financial institutions. The goal is to give those institutions a way to offer “a secure and seamless digital customer and merchant experience” that leverages Amount’s verification and analytics capabilities. 

Image Credits: Amount

HSBC, TD Bank, Regions, Banco Popular and Avant (of course) are among the 10 banks that use Amount’s technology in an effort to simplify their transition to digital financial services. Recently, Barclays US Consumer Bank became one of the first major banks to offer installment point-of-sale options, giving merchants the ability to “white label” POS payments under their own brand (using Amount’s technology).

The pandemic dramatically accelerated banks’ interest in further digitizing the retail lending experience and offering additional buy now, pay later financing options with the rise of e-commerce,” Hughes, former president and COO at Avant, told TechCrunch. “Banks are facing significant disruption risk from fintech competitors, so an Amount partnership can deliver a world-class digital experience with significant go-to-market advantages.”

Also, he points out, consumers’ digital expectations have changed as a result of the forced digital adoption during the pandemic, with bank branches and stores closing and more banking done and more goods and services being purchased online.

Amount delivers retail banking experiences via a variety of channels and a point-of-sale financing product suite, as well as features such as fraud prevention, verification, decisioning engines and account management.

Overall, Amount clients include financial institutions collectively managing nearly $2 trillion in U.S. assets and servicing more than 50 million U.S. customers, according to the company.

Hughes declined to provide any details regarding the company’s financials, saying only that Amount “performed well” as a standalone company in 2020 and that the company is expecting “significant” year-over-year revenue growth in 2021.

Amount plans to use its new capital to further accelerate R&D by investing in its technology and products. It also will be eyeing some acquisitions.

“We see a lot of interesting technology we could layer onto our platform to unlock new asset classes, and acquisition opportunities that would allow us to bring additional features to our platform,” Hughes told TechCrunch.

Avant itself made its first acquisition earlier this year when it picked up Zero Financial, news that TechCrunch covered here.

Kevin Marcus, partner at WestCap, said his firm invested in Amount based on the belief that banks and other financial institutions have “a point-in-time opportunity to democratize access to traditional financial products by accelerating modernization efforts.”

“Amount is the market leader in powering that change,” he said. “Through its best-in-class products, Amount enables financial institutions to enhance and elevate the banking experience for their end customers and maintain a key competitive advantage in the marketplace.”

#airbnb, #amount, #avant, #bank, #banking, #barclays, #blackstone, #chicago, #e-commerce, #economy, #enterprise-software, #finance, #financial-infrastructure, #financial-services, #financial-technology, #fintech, #funding, #fundings-exits, #goldman-sachs, #hanaco-ventures, #hsbc, #ing-group, #invus-group, #laurence-tosi, #market-leader, #money, #recent-funding, #retail-banking, #startup, #startups, #united-states, #venture-capital, #westcap

0

Pomelo raises $9M to build a payments infrastructure for LatAm fintechs

Pomelo, a startup building a fintech-as-a-service platform for Latin America, has raised $9 million in a seed round of funding.

The Buenos Aires-based startup’s new infrastructure aims to allow fintechs and embedded finance players to launch virtual accounts and issue prepaid and credit cards via “compliant” onboarding processes.

The COVID-19 pandemic has accelerated the adoption of digital payments all over the world, and Latin America is no exception. While the majority of transactions are still done in cash, there are still over a billion cards in the region.

Cards have an estimated payments volume of $900 billion per year, and yet 95% of these transactions are being processed by local incumbents, asserts Pomelo. This is a problem the company’s founders experienced firsthand in previous roles, and are eager to solve by creating a new payments infrastructure.

“We know from previous experiences…that building a fintech, and particularly issuing cards, in Latin America is a real nightmare,” said Pomelo co-founder and CEO Gaston Irigoyen. “It takes anywhere from 12 to 18 months to launch a simple prepaid card, and unfortunately companies have to go through the painful experience of repeating the process in every market where they operate.”

Pomelo’s goal is to solve the problem by creating a new generation of financial services infrastructure that allows companies to build a fintech business and launch cards “much faster” throughout Latin America. For now, the three-month-old company is in its infancy — the pre-product phase, which makes it even more notable that the company managed to raise such a large seed round.

This round caught our eye for a few other reasons. For one, the three co-founders of the Buenos Aires-based startup were former executives at Mastercard, Google LatAm, Mercado Pago and Naranja X. CEO Irigoyen was an early employee at Google LatAm. He is also a third-time founder with two exits (one to TripAdvisor) and former CEO of Naranja X, Argentina’s largest neobank, with millions of customers. Juan Fantoni was the former director of fintech at Mastercard, where he signed issuing deals with a number of large companies. And Hernan Corral was the CPO of Naranja X and previously head of digital accounts & cards at Mercado Pago.

Next, the caliber of Pomelo’s investors. U.S.-based Index Ventures and Brazil’s monashees co-led the funding round, which also included participation from QED’s Fontes, Max Levchin’s SciFi, Latitud, Biz Stone’s Future Positive, 20VC, Addition, FJ Labs and a16z’s Angela Strange, as well as the founders of Marqeta, Rappi, Auth0, Kavak, Loft and RecargaPay.

If you’re looking for comparisons to U.S.-based fintechs, Irigoyen said it’s got a little bit of Galileo, Marqeta and Stripe in what it’s building out.

Caio Bolognesi, partner at monashees, said his firm has been very bullish on the financial infrastructure space as a whole. They were drawn to Pomelo in part because its founders had been senior tech executives at leading fintech companies in the region and because many of its portfolio companies had already manifested the need for a better solution in this space.

Index Ventures’ Mark Fiorentino agrees that the company’s founder-market fit was crucial in his firm’s decision to invest.

“They have the DNA of the most well-known payments companies within the LATAM fintech ecosystem… and have lived through the pain points and keyed in on this opportunity through firsthand experience,” he said.

In general, Fiorentino believes that while the need for embedded financial products is becoming increasingly ubiquitous in the Latin American market, it’s important to note that the region “is far from a carbon copy” of the U.S. market with different dynamics.

For one, he said, existing solutions in the Latin American market are either “outdated” offerings from legacy financial institutions or “subpar” iterations from U.S. incumbents.

“It takes over 12 months for a business to spin up a plastic or digital card for itself. And because most legacy processors are owned by banks or large financial institutions that have been around for decades, pricing is inflexible and expensive,” Fiorentino told TechCrunch. “And if that wasn’t enough of a headache, stable reliability has been a huge pain point with these issuer processors. Pomelo is building the dev-first, self-serve API solution to address this clear market need.”

Looking ahead, Pomelo plans to use its new capital in part to open offices in São Paulo, Brazil and Mexico City, and hire dozens of people in those cities as well as in its home base of Argentina. The company currently has about 15 employees, 11 of which are engineers. It of course plans to continue building out its offering.

#api, #argentina, #biz-stone, #brazil, #buenos-aires, #finance, #financial-technology, #fintech, #fintech-infrastructure, #fj-labs, #google, #index-ventures, #latin-america, #marqeta, #mastercard, #max-levchin, #mexico-city, #monashees, #money, #online-payments, #payments, #payments-infrastructure, #paypal, #pomelo, #recent-funding, #sao-paulo, #startup, #startups, #stone, #tc, #tripadvisor, #united-states

0

Sanlo raises $3.5M to help apps and games gain access to financial insights and capital

Having a great idea for an app or game is one thing, but scaling it to become a successful business is quite another. A new fintech startup called Sanlo aims to help. The company, which is today announcing an oversubscribed $3.5 million seed round, offers small to medium-sized game and app companies access to tools to manage their finances and capital to fuel their growth.

To be clear, Sanlo is not an investor that’s taking an equity stake in the apps and games it finances. Instead, it’s offering businesses access to technology, tools, and insights that will allow them to achieve smart and scalable growth while remaining financially healthy — even if they’re a smaller company without time to sit down and structure their finances. Then, when Sanlo’s proprietary algorithms determine the business could benefit from the smart deployment of capital, it will assist by offering financing.

The idea for Sanlo hails from co-founders Olya Caliujnaia and William Liu, who both have backgrounds in fintech and gaming.

Caliujnaia began her career in venture capital in one of the first mobile-focused funds, before moving to operator roles in gaming, stock photography, and fintech, at EA, Getty Images, and SigFig, respectively. She later joined early-stage fintech and enterprise fund XYZ.vc as an Entrepreneur in Residence.

Liu, meanwhile, had also worked in gaming at EA, but later switched to fintech, working at startups like Earnest and Branch.

After reconnecting in San Francisco, the co-founders realized they could put their combined experience to work in order to help smaller businesses just starting out recognize when it’s time to scale, what areas of the business to invest in, and how much capital they need to grow.

Image Credits: Sanlo’s Olya Caliujnaia and William Liu

Caliujnaia has seen how the app and gaming market has evolved over the years, and she realized the difficulties new developers now face.

“You have this explosion of the app economy that’s growing insanely,” she says. “That’s the exciting part of it. That creativity. That passion and that desire to build — that’s so admirable.”

Today, companies benefit from having access to better development tools, broader access to talent, consumer demand, and other forces, she notes, compared with those in the past. But on the flip side, it’s become incredibly difficult to scale a consumer app or game.

“I think a lot of that comes down to, one, that there are dynamics around the free-to-play model — how you monetize and therefore, what kind of players and users you bring on board,” Caliujnaia says. “And then the second aspect is that it’s just harder to get noticed. So, ultimately, it comes down to marketing.”

Many of the decisions that a company has to make on this front are predictable, however. That means Sanlo doesn’t have to sit down with businesses and consult with them one-on-one, the way a financial advisor working in wealth management would do with their clients.

Instead, Sanlo asks companies for certain types of data to get started. This includes product data about how well the app or game monetizes and customer acquisition and retention, for example, as well as marketing data and a subset of financial data. Its predictive algorithms then continually monitor the company’s growth trajectory to surface insights to identify where and how the business can grow.

This concept alone could have worked as a services business for mobile studios, but Sanlo takes the next step beyond advice to actually provide companies with access to capital. The amount of financing provided will vary based on the life stage of the company and risk profile, but it’s non-dilutive capital. That is, Sanlo takes no ownership stake in the companies it finances.

Image Credits: Sanlo

Caliujnaia said it made more sense to go this route rather than return to the VC world, because of potential to reach a wider group.

“There’s this long tail of developers and it’s more about enabling them, rather than producing more hits,” she says. “It’s very different mindsets, different markets that we’re going for.”

Sanlo doesn’t have a lot of direct competitors beyond perhaps, Silicon Valley Bank and other financial lenders, as well as mobile gaming publishers. But the publisher model often implies some sort of ownership, which is a significant differentiating factor. In some cases, you may see a larger gaming company extending debt financing to a smaller one. That was the case with Finnish mobile games company Metacore which recently raised another debt round from gaming giant Supercell, for example.

Caliujnaia points out that most smaller companies don’t have that kind of access to financing. Now they could, through Sanlo.

“The idea is to have a healthier layer of companies that are able to survive for the long-term,” she says.

That means more companies that won’t have to stress about their futures, leading to them to aggressively monetize their users, and later, scrambling for an exit when their financial runway comes to an end.

Sanlo is currently pilot testing its system with a small group of mobile game studios who will serve as its initial customer base, but plans to later support consumer apps, which have similar struggles with customer acquisition costs and growth.

The San Francisco-headquartered startup itself was founded in 2020 and began raising money. It has now raised a total of $3.5 million in seed funding co-led by Index Ventures and Initial Capital, with participation from LVP, Portag3 Ventures, and  XYZ Venture Capital. Angel investors include Kristian Segestrale (Super Evil Megacorp CEO), Gokul Rajaram and Charley Ma. 

Initial Capital co-founder and partner Ken Lamb became a board director with the fundraise, while Index partner Mark Goldberg and XYZ managing partner Ross Fubini joined as board observers.

“Sanlo cracked the code to help mobile gaming and app companies reach maturity with a new level of speed, scale, and fiscal wellbeing,” said Goldberg, in a statement. “The company is building a very sophisticated fintech offering that will give those companies superpowers.”

Sanlo plans to use the funds to grow its team and product suite ahead of its public launch later this year.

#apps, #finance, #financial-technology, #financing, #fintech, #funding, #gaming, #mobile, #recent-funding, #san-francisco, #startups

0

Crypto asset manager Babel raises $40M from Tiger Global, Bertelsmann and others

Three years after its inception, crypto financial service provider Babel Finance is racking up fundings and partnerships from major institutional investors. The startup said Monday that it has closed a $40 million Series A round, with lead investors including Zoo Capital, Sequoia Capital China, Dragonfly Capital, Bertelsmann and its Asian fund BAI Capital, and Tiger Global Management.

For years, traditional investors were reluctant to join the cryptocurrency fray. But in 2020, Babel noticed that many institutions and high net worth individuals began to consider crypto assets as an investment class.

Babel, with offices in Hong Kong, Beijing, and Singapore, wanted to capture the window of opportunity and be one of the earliest to help allocate crypto assets in investors’ portfolios. But first, it needed to win investors’ trust. One solution is to have reputable private equity and venture capital firms on its cap table.

“It’s more of a brand boost so we can attract more institutions and build up credibility,” Babel’s spokesperson Yiwei Wang said of the firm’s latest financing, which is a strategic round as Babel had “reached profitability” and “wasn’t actively looking for funding.”

To vie for institutional customers and wealthy individuals, Babel plans to spend its fresh proceeds on product development, compliance and talent acquisition, seeking especially banking professionals and lawyers to work on regulatory requirements. It currently has a headcount of 55 employees.

Mainstream investors are jumping into the crypto scene partly because many see bitcoin as a way to hedge against “solvency and credibility risks” amid global economic uncertainties caused by Covid-19, said Wang. “Bitcoin is not something controlled by the government.”

The other trigger, Wang explained, was what shock the industry in February: Elon Musk bought $1.5 billion in bitcoin and declared Tesla would begin accepting the digital token as payments. That sparked a massive rally around bitcoin, sending its price to over $40,000.

Babel’s evolution has been in line with the trajectory of the industry. In its early days, the startup was a “crypto-native” company offering deposit and loan products to crypto miners and traders. These days, it also runs a suite of asset management products and services tailored to enterprise clients around the world. It’s applying for relevant financial licenses in North America and Asia.

As of February, Babel’s crypto lending business had reached an outstanding balance of $2 billion in equivalent cryptocurrency, the firm says. It has served more than 500 institutional clients and sees about $8 billion in direct trading volume each month. 80% of its revenues are currently derived from institutions. The goal is to manage one million bitcoins within four years.

#asia, #babel-finance, #beijing, #bertelsmann, #bitcoin, #cryptocurrencies, #cryptocurrency, #decentralization, #digital-currencies, #financial-technology, #funding, #sequoia-capital, #sequoia-capital-china, #singapore, #spokesperson, #tc, #tiger-global-management

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Payments, lending and neobanks rule fintechs in emerging markets, report says

Tech investments in emerging markets have been in full swing over the past couple of years and their ecosystems have thrived as a result. Some of these markets like Africa, Latin America, and India, have comprehensive reports by publications and firms on trends and investments in their individual regions. But there’s hardly a report to compare and contrast trends and investments between these regions and rightfully so. Such a task is Herculean.

Well, a report released today by data research organization Briter Bridges and global inclusive tech accelerator Catalyst Fund is punching above its weight to offer a holistic representation to the darling sector of these three markets: fintech.

The report “State of Fintech in Emerging Markets Report” has three objectives — to evaluate the investment, product, and inclusivity trends across emerging markets.

The team surveyed over 177 startups and 33 investors across Africa, Latin America, and India. Though this sample size used is minuscule, the key findings are quite impressive.

Let’s dive in.

Fintechs have raised $23B across the regions since 2017

There’s no stopping emerging markets’ favorite. The sector has continued to receive the largest share of investments year-on-year for the past five years.

More than 300 million unbanked African adults account for 17% of the world’s unbanked population. So it’s not difficult to see why in 2019, the continent witnessed five mega deals in Branch, Tala, World Remit, Interswitch, and OPay that amounted to a total of over $775 million. While this dropped last year to $362 million, companies like Flutterwave, TymeBank, Kuda have raised sizeable rounds during this period.

fintech funding five years emerging markets

Image Credits: Briter Bridges & Catalyst Fund

Latin America is home to a growing base of digital users, enabling regulation and reforms, and vibrant small businesses. And just like Africa, the percentage of unbanked people is high, 70%. Fintechs in the region have taken the opportunity to cater to their needs and have been compensated with mega-rounds, including NuBank, Neon, Konfio, and Clip. Collectively, fintech startups have raised $10 billion in the past five years.

In 2019 alone, Indian fintech startups raised a record of $4.8 billion, per the report. Then last year, the sector brought in $3 billion. Over the past five years, they have totaled $11.6 billion with notable names like CRED, Razorpay, Groww, BharatPe, among others.

Africa’s average seed rounds stand at $1M, India and Latin America average $3M

Per the report, early-stage deals have been increasing over the past five years totaling over $1.6 billion. Their average size, especially for seed rounds, has grown from $750,000 in 2017 to $1 million in 2020. For  Latin America, the average seed deal in the last five years was around $5.7 million while India did approximately $4.6 million. The report says the data for the latter was skewed because of CRED’s $30 million seed round.

Image Credits: Briter Bridges & Catalyst Fund

Latin America is IPO-hungry, India breeds unicorns while Africa is just getting started with M&A

Last year, Stripe’s acquisition of Paystack was the highlight of Africa’s M&As because of its size and the homegrown status of the Nigerian fintech startup. Other larger rounds include the $500 million acquisition of Wave by WorldRemit (which happens to be the largest from the continent) and the DPO Group buyout by Network International for $288 million.

Unlike the African fintech market that has noticed mega acquisition deals and many undisclosed seven-figure deals, the Latin American fintech market is a sucker for IPOs. Per the report, fintechs in the region have several $100 million rounds (Nubank, PagSeguro,  Creditas, BancoInter and Neon) but have sparse M&A activity. Some of the startups to have gone public recently include Arco Educacao, Stone Pagamentos, Mosaico, and Pagseguro

On the other, India has more than 25 billion-dollar companies and keeps adding yearly. Just last month, the country recorded more than eight. These unicorns include established companies like PayTm and new ones like CRED.

Payments, credit, and neobanks lead fintech activity

The report shows that payments companies are the crème de la crème for fintech investment across the three regions. Within that subset, B2B payments reign supreme. The next two funded fintech categories are credit and digital banking.

In Africa, payments startups have seen more investments than credit and neobanks. Flutterwave, Chipper Cash, Wave, Paystack, DPO come to mind.

most funded fintech categories emerging market

Image Credits: Briter Bridges & Catalyst Fund

Latin America most funded fintechs are neobanks. And it is the only region with all three product categories closely funded at $2-3 billion. Some of these companies include NuBank, Creditas, and dLocal.

India’s top-funded fintech startups are in payments. But it has notable representation in credit and neobanks, some of which have raised nine-figure rounds like Niyo, Lendingkart, and InCred.

Investors are enthused about the future of insurance, payments, and digital banks

From the handful of investors surveyed in the report on their view on future trends in fintech products 5 years from now, most of them chose insurance, payments, and digital banking models.

Investment platforms and embedded models are also areas of interest. They were less keen on agriculture and remittances while wealth tech platforms and neobanks were also lower in priority. How is it that digital banking and neo-banking are at two ends of the spectrum of investor choice? I can’t say for sure.

investors appetite in the coming years emerging markets

Image Credits: Briter Bridges & Catalyst Fund

Parts of the report talk about underserved consumers in these regions and how fintech startups are serving them. It also discusses whether these fintech startups promote financial inclusion and what features and products would get them to that point.

In all of this, the glaring fact, which is no news, is that Africa is lagging years behind Latin America and India. Talking with Briter Bridges director Dario Giuliani, he pointed out that he’d lean on five years. He added that what makes India a better market at this stage is because it is a country rather than a continent.

“It is easier to manage one country than 54 countries in Africa and 20 in Latin America,” he said to TechCrunch. “In Africa, we use the label ‘Africa,’ but we’re very much talking about 4-6 countries. Latin America is basically Brazil, Mexico, Argentina and Colombia who are seeing massive companies rise. India is one.”

One key detail the report mentions is that most fintechs across emerging markets are crossing over to different sectors like crop insurance, credit lines for distributors and vendors, KYC, e-commerce payment gateways, medical finance, and insurance. Guiliani says he expects this to continue.

#africa, #banking, #brazil, #briter-bridges, #catalyst-fund, #chipper-cash, #digital-banking, #dlocal, #finance, #financial-inclusion, #financial-technology, #fintech, #flutterwave, #india, #latin-america, #ma, #nubank, #online-lending, #payments, #paystack, #paytm, #startups, #stripe, #tc, #tymebank, #wave, #worldremit

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Paystack expands to South Africa seven months after Stripe acquisition

Nigerian fintech startup Paystack has been relatively quiet since it was bought by fintech giant Stripe last October. The deal, worth more than $200 million, caused shockwaves to the African tech ecosystem and offered some form of validation to work done by founders, startups and investors alike.

Today, the payments company, which powers businesses with its payment API and is actively present in Nigeria and Ghana, is announcing its official launch in South Africa.

In 2018 when we reported Paystack’s $8 million Series A (which Stripe also led), it was powering 15% of all online payments in Nigeria. The company had more than 10,000 businesses on its platform and expansion to other African countries was one way it planned to use the money. Ghana was its next stop.

Since expanding to Ghana, Paystack has grown and claims to power 50% of all online payments in Nigeria with around 60,000 customers, including small businesses, larger corporates, fintechs, educational institutions and online betting companies. Some of its customers include MTN, SPAR and UPS, and they use the company’s software to collect payments globally.

The South African launch was preceded by a six-month pilot, which means the project kickstarted a month after Stripe acquired it. Stripe is gearing toward a hotly anticipated IPO and has been aggressively expanding to other markets. Before acquiring Paystack, the company added 17 countries to its platform in 18 months, but none from Africa. Paystack was its meal ticket to the African online commerce market, and CEO Patrick Collison didn’t mince words when talking about the acquisition in October.

“There is an enormous opportunity. In absolute numbers, Africa may be smaller right now than other regions, but online commerce will grow about 30% every year. And even with wider global declines, online shoppers are growing twice as fast. Stripe thinks on a longer time horizon than others because we are an infrastructure company. We are thinking of what the world will look like in 2040-2050,” he said. 

Although Stripe said the $600 million it raised in Series H this March would be used mainly for European expansion, its foray deeper into Africa has kicked off. And while Paystack claims to have had a clear expansion roadmap prior to the acquisition, its relationship with Stripe is accelerating the realization of that pan-African expansion goal.

Now, Africa accounts for three of the 42 countries where Stripe currently has customers today.

“South Africa is one of the continent’s most important markets, and our launch here is a significant milestone in our mission to accelerate commerce across Africa,” said Paystack CEO Shola Akinlade of the expansion. “We’re excited to continue building the financial infrastructure that empowers ambitious businesses in Africa, helps them scale and connects them to global markets.”

The six-month pilot saw Paystack work with different businesses and grow a local team to handle on-the-ground operations. However, unlike Nigeria and Ghana, where Paystack has managed to be a top player, what are the company’s prospects in the South African market where it will face stiff competition from the likes of Yoco and DPO?

“The opportunity for innovation in the South African payment space is far from saturated. Today, for instance, digital payments make up less than half of all transactions in the country,” Abdulrahman Jogbojogbo, product marketer at Paystack said. “So, the presence of competition is not only welcome; it’s encouraged. The more innovative plays there are, the faster it’ll be to realize our goal of having an integrated African market.”

Khadijah Abu, head of product expansion, added that “for many businesses in South Africa, we know that accepting payments online can be cumbersome. Our pilot in South Africa was hyper-focused on removing barriers to entry, eliminating tedious paperwork, providing world-class API documentation to developers, and making it a lot simpler for businesses to accept payments online.”

Many people compare Paystack to Africa’s newest fintech unicorn Flutterwave. Founded a year apart, both companies help businesses accept payments from thousands of businesses. When the latter raised its recent juggernaut $170 million round, it claimed to have 290,000 businesses on its platform. While Flutterwave has been high-flying with its pan-African expansion (it has a presence in 20 African countries), Paystack has adopted a rather scrupulous approach. The company said the reason behind this lies with the peculiarities each African country presents and because each country has different regulations, launching at scale takes time. 

“Our goal isn’t to have a presence in lots of countries, with little regard for service quality. We care deeply that we deliver a stellar end-to-end payment experience in the countries we operate in,” Jogbojogbo continued. “And this takes some time, careful planning and lots of behind-the-scenes, foundational work.”

But being backed by Stripe and armed with millions of dollars, Paystack might need to switch things up eventually. Even as it operates independently, its pan-African vision is equally important to Stripe, and speed will be crucial, even the five-year-old company acknowledges this and said, “its pace of expansion will quicken as it expands into more African countries.”

#africa, #financial-technology, #flutterwave, #ghana, #nigeria, #online-commerce, #online-payments, #payments, #paystack, #south-africa, #stripe, #tc

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With backers like Tiger Global, LatAm crypto exchange Bitso raises $250M at a $2.2B valuation

Bitso, a regulated crypto exchange in Latin America, announced today it has raised $250 million in a Series C round of funding that values the company at $2.2 billion.

Tiger Global and Coatue co-led the round, which also included participation from Paradigm, BOND & Valor Capital Group and existing backers QED, Pantera Capital and Kaszek.

The news caught our attention for several reasons. For one, it comes just four months after the Brazilian startup raised $62 million in a Series B round. Secondly, the company believes the funding makes it the most valuable crypto platform in Latin America. And lastly, it also makes the company one of the most highly valued fintechs in the region.

Last year was a good one for Bitso, which says it processed more than $1.2 billion in international payments — including remittances and payments between companies — during 2020 alone. Bitso says it also has surpassed 2 million users. These two milestones, the company argues, is evidence of the growing use of crypto as an everyday financial tool in the region.

Demand for crypto assets and crypto-enabled financial products have soared in popularity both for individuals and businesses in the region, according to Bitso, which aims to be “the safest, most transparent, and only regulatory compliant platform” in Latin America. The company also says it’s the only player in the region to offer crypto-insurance for its client’s funds.

“The growth of the crypto ecosystem this year has been remarkable. It took Bitso six years to get its first million clients. Now — less than 10 months later — we have reached the 2 million mark,” said Bitso co-founder and CEO Daniel Vogel. But the metrics he is most proud of are that Bitso has also more than doubled the assets on its platform in the last five months and that its transacting volume during the 2021 first quarter exceeded the transaction volume it did in all of 2020.

Bitso was founded in January 2014 and acquired its first customer in April of that year.

Bitso’s mission, put simply, is to build next-generation borderless financial services for consumers and businesses alike. “Cryptocurrencies are the future of finance and Bitso makes the future available today,” the company says.

“Bitso offers products and services for individuals and businesses to use crypto in their everyday life,” Vogel said. “In some parts of the world, crypto is associated with speculation. Bitso’s customers rely on the technology for everyday uses from receiving remittances to engaging in international commerce.”

Image Credits: Bitso

Bitso says its “global-minded” product offerings fit the needs of local customers in Mexico, Argentina and now Brazil, where it just launched its retail operations. The company plans to use its new capital toward broadening its capabilities and product offering. It also plans to expand its operations in other Latin American countries in the coming months. In January, the Financial Superintendence of Colombia announced Bitso as one of the authorized companies in its Sandbox and crypto pilot program.

Bitso’s upcoming products include a crypto derivatives platform and interest bearing accounts for crypto.

“This is a pivotal moment for the future of finance in Latin America,” Vogel told TechCrunch. “We see a significant amount of traditional financial infrastructure in the region being replaced by crypto. We plan to use this funding to continue that trend by expanding our product offering for individuals and businesses.”

Naturally, Bitso’s investors are bullish on the company’s potential.

QED Investors co-founder and managing partner Nigel Morris admits that in the past he was “a crypto denier.”

“For the longest time, we didn’t see a way crypto fit. It wasn’t clear until recently that the use cases for crypto expanded much beyond speculative trading. There are now a whole series of conventional banking products that we can wrap around it,” Morris told TechCrunch.

Bitso’s mission, he said, is to “make crypto useful” and QED believes the company is succeeding at doing just that.

“Daniel and the entire Bitso team is passionate about taking the mystique out of crypto. Crypto is not going away; it’s going to be here for the future,” Morris said. “By sitting at the intersection of crypto and traditional financial institutions, Bitso has a promise to provide lower-cost, friction-free financial services to entire populations of individuals who otherwise would be excluded — a laudable and unique mission indeed.”

Bitso, he added, is learning from the crypto experience in the U.S. and around the world.

“Not making the same mistakes and leaning into the emerging regulatory landscape has been a competitive advantage to Bitso’s success in Mexico,” Morris said. “As Bitso grows throughout the regions, they certainly have a leg up and might even leapfrog crypto adoption in the U.S.”

“Crypto is rapidly gaining adoption in Latin America,” said Tiger Global Partner Scott Shleifer, in a written statement. “We are excited to partner with Bitso and believe they have the right team and platform to increase share in this growing market.”

Founded in 2014, Bitso has more than 300 employees across 25 different countries. That compares to 116 employees last year at this time. In particular, its growth in Brazil is increasing exponentially.

“We’ve gone from 1 to 26 Bitsonauts already based in Brazil, with many more working from abroad, and plan to 3X our number of hires in Brazil by the end of the year,” Vogel said, who acknowledged that the pandemic really impacted his company via the shift to remote work. “As we expand our reach into new territories, it has become a lot easier to meet staffing needs when the requirements are based on knowledge over geography.”

Bitso’s leadership is mostly based in Mexico, but the company also has offices in Buenos Aires, São Paolo and Gibraltar.

#argentina, #bitso, #bond, #brazil, #coatue, #colombia, #crypto-economy, #cryptocurrency, #decentralization, #finance, #financial-infrastructure, #financial-technology, #fintech, #funding, #fundings-exits, #latin-america, #mexico, #pantera-capital, #paradigm, #qed, #qed-investors, #recent-funding, #sao-paulo, #scott-shleifer, #startups, #tc, #tiger-global, #united-states, #valor-capital-group, #venture-capital

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Multicoin Capital debuts new $100M fund to bet on crypto startups and tokens

Crypto startups couldn’t be hotter as currencies push past all-time-highs and investor appetite reaches mania for new projects. Crypto investment firms that have been investing in blockchain startups for years are not only beginning to see major movement from their portfolio, but are gaining renewed appetite from LPs after a lengthy crypto winter to make bigger, more audacious bets.

Austin-based Multicoin Capital has been around since 2017 investing in blockchain startups, cryptocurrencies and tokens with a venture fund and separate hedge fund. Today, the firm announced its raise of its second venture fund as it aims to further capitalize on rampant excitement in the crypto world. The new $100 million fund will help the company back new entrants in the space including companies tackling DeFi, digital collectibles, Web3 and crypto-enabled infrastructure.

Multicoin’s team says that it has already been investing out of this fund for several months and it seems the timing is more aligned with the promotion of three of the firm’s employees — Matt ShapiroMable Jiang, and John Robert Reed — to Partner status. The team is just 12, but is looking to expand as they build out their remote presence in other geographies.

The firm’s previous bets include The Graph, Solana, Torus, StarkWare and Arweave, among others.

#articles, #austin, #bitcoin, #blockchain, #cryptocurrencies, #cryptocurrency, #cryptography, #decentralization, #decentralized-finance, #financial-technology, #multicoin-capital, #technology

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Wealthsimple raises $610M at a $4B valuation

Canadian fintech giant Wealthsimple has raised a new round of $750 million CAD (~$610 million) at a post-money valuation of $5 billion CAD (~$4 billion). The round was led by Meritech and Greylock, and includes funding from Inovia, Sagard, Redpoint, TSV, as well as individual investors including Drake, Ryan Reynolds and Michael J. Fox (basically, all the most famous Canadians).

Wealthsimple’s big new raise more than doubles its valuation from its last round, a $114 million CAD (roughly $93 million) funding announced last October, which carried a post-money valuation of $1.5 billion CAD ($~1.22 billion USD). The Toronto-based company has been a leader in the realm of democratizing financial products for consumers, including stock trading, crypto asset sales, and peer-to-peer money transfers.

The company says that it experienced significant growth during the pandemic, which is likely one big reason why its valuation rose so much between its most recent raise and this one. Its commission-free retail investment platform has grown “rapidly” over the course of the past 14 months, the company says, and the crypto trading platform which it launched last August has also seen strong uptake given the recent surge in consumer interest in cryptocurrency assets.

Late last year, Wealthsimple soft-launched its P2P money transfer app, Wealthsimple Cash, and in March it made it available to all Canadians. The app is very similar in terms of features to Venmo or Square’s Cash app, but neither of those offerings have been available to Canadians thus far. Wealthsimple’s app, which is free to use and distinct from its stock trading and crypto platforms, has thus tapped significant pent-up demand in the market and seen rapid uptake rthus far.

With this funding, Wealthsimple plans to “expand its market position, build out its product suite, and grow its team.” The company also offers automated savings and investing products (the robo-advisor tools it was originally founded around), as well as tax filing tools, and it has demonstrated a clear appetite and ability to expand its offerings to encompass even more of its customers financials lives when committed with fresh resources to do so.

The company says it has over 1.5 million users, with over $10 billion in assets under management as of the last publicly available numbers.

#cryptocurrencies, #finance, #financial-technology, #fintech, #funding, #michael-j-fox, #mobile-payments, #money, #peer-to-peer, #robo-advisor, #ryan-reynolds, #tc, #toronto, #venmo, #wealthsimple

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Weav raises $4.3M to knit together a universal API for commerce platforms

Weav, which is building a universal API for commerce platforms, is emerging from stealth today with $4.3 million in funding from a bevy of investors, and a partnership with Brex.

Founded last year by engineers Ambika Acharya, Avikam Agur and Nadav Lidor after participating in the W20 YC batch, Weav joins the wave of fintech infrastructure companies that aim to give fintechs and financial institutions a boost. Specifically, Weav’s embedded technology is designed to give these organizations access to “real time, user-permissioned” commerce data that they can use to create new financial products for small businesses.  

Its products allow its customers to connect to multiple platforms with a single API that was developed specifically for the commerce platforms that businesses use to sell products and accept payments. Weav operates under the premise that allowing companies to build and embed new financial products creates new opportunities for e-commerce merchants, creators and other entrepreneurs. 

Left to right: Co-founders Ambika Acharya, Nadav Lidor and Avikam Agur; Image courtesy of Weav

In a short amount of time, Weav has seen impressive traction. Recently, Brex launched Instant Payouts for Shopify sellers using the Weav API. It supports platform integrations such as Stripe, Square, Shopify and PayPal. (More on that later.) Since its API went live in January, “thousands” of businesses have used new products and services built on Weav’s infrastructure, according to Lidor. Its API call volume is growing 300% month over month, he said.

And, the startup has attracted the attention of a number of big-name investors, including institutions and the founders of prominent fintech companies. Foundation Capital led its $4.3 million seed round, which also included participation from Y Combinator, Abstract Ventures, Box Group, LocalGlobe, Operator Partners, Commerce Ventures and SV Angel. 

A slew of founders and executives also put money in the round, including Brex founders Henrique Dubugras and Pedro Franceschi; Ramp founder Karim Atiyeh; Digits founders Jeff Seibert and Wayne Chang; Hatch founder Thomson Nguyen; GoCardless founder Matt Robinson and COO Carlos Gonzalez-Cadenas; Vouch founder Sam Hodges; Plaid’s Charley Ma as well as executives from fintechs such as Square, Modern Treasury and Pagaya.

Foundation Capital’s Angus Davis said his firm has been investing in fintech infrastructure for over a decade. And personally, before he became a VC, Davis was the founder and CEO of Upserve, a commerce software company. There, he says, he witnessed firsthand “the value of transactional data to enable new types of lending products.”

Foundation has a thesis around the type of embedded fintech that Weav has developed, according to Davis. And it sees a large market opportunity for a new class of financial applications to come to market built atop Weav’s platform.

“We were excited by Weav’s vision of a universal API for commerce platforms,” Davis wrote via email. “Much like Plaid and Envestnet brought universal APIs to banking for consumers, Weav enables a new class of B2B fintech applications for businesses.”

How it works

Weav says that by using its API, companies can prompt their business customers to “securely” connect their accounts with selling platforms, online marketplaces, subscription management systems and payment gateways. Once authenticated, Weav aggregates and standardizes sales, inventory and other account data across platforms and develops insights to power new products across a range of use cases, including lending and underwriting; financial planning and analysis; real-time financial services and business management tools.

For the last few years, there’s been a rise of API companies, as well as openness in the financial system that’s largely been focused on consumers, Lidor points out.

“For example, Plaid brings up very rich data about consumers, but when you think about businesses, oftentimes that data is still locked up in all kinds of systems,” he told TechCrunch. “We’re here to provide some of the building blocks and the access to data from everything that has to do with sales and revenue. And, we’re really excited about powering products that are meant to make the lives of small businesses and e-commerce, sellers and creators much easier and be able to get them access to financial products.”

In the case of Brex, Weav’s API allows the startup to essentially offer instant access to funds that otherwise would take a few days or a few weeks for businesses to access.

“Small businesses need access as quickly as possible to their revenue so that they can fund their operations,” Lidor said.

Brex co-CEO Henrique Dubugras said that Weav’s API gives the company the ability to offer real-time funding to more customers selling on more platforms, which saved the company “thousands of engineering hours” and accelerated its rollout timeline by months.

Clearly, the company liked what it saw, considering that its founders personally invested in Weav. Is Weav building the “Plaid for commerce”? Guess only time will tell.

#abstract-ventures, #angus-davis, #api, #banking, #box-group, #brex, #carlos-gonzalez-cadenas, #commerce-ventures, #e-commerce, #ecommerce, #finance, #financial-services, #financial-technology, #fintech-infrastructure, #foundation-capital, #funding, #fundings-exits, #hatch, #matt-robinson, #money, #online-marketplaces, #operator-partners, #paypal, #plaid, #real-time, #recent-funding, #shopify, #startup, #startups, #stripe, #tc, #thomson, #upserve, #venture-capital, #weav, #y-combinator

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