Staying on the beat – 06-12 September 2021.
From Startups to Funding
Varo is set to announce Thursday that it raised $510 million in a Series E round led by hedge fund Lone Pine Capital and including dozens of new and existing investors. The firm’s valuation rose to $2.5 billion from approximately $700 million after its previous fundraising, according to people with knowledge of the matter. Varo doubled its customer accounts to 4 million and tripled revenue in the 13 months after getting its charter, according to CEO Colin Walsh said.
Francophone Africa has its first unicorn: a U.S. and Senegal-based mobile money provider Wave. The mobile money market in sub-Saharan Africa is growing exponentially. This past year, up to $500 billion has moved through the accounts of 300 million active mobile money users in the region. Four big-name backers jointly led the round — Sequoia Heritage, an endowment-style fund and a separate entity that operates independently under the Sequoia brand; Founders Fund; payments giant Stripe; and Ribbit Capital. Others in the round include existing investors Partech Africa and Sam Altman, the former CEO of Y Combinator and current CEO of OpenAI.
FlyCoin is a new financial technology company seeking to upend the traditional model of frequent flyer programs by implementing cryptocurrency-based principles. Rather than airline miles limited to use on a given airline, rewards are given in the form of tokens that can be exchanged for anything from free flights to US dollars or bitcoin.
Farmland as an asset class has proven itself to be a stable investment decade after decade. Farmland’s negative correlation with the Dow Jones Industrial Average sits at an eye-popping -43% for a three-year hold period, making it an excellent hedge against market volatility. The asset has also been a steady appreciator since 1987, when institutional investors began incorporating farmland into their portfolios.
Women Returners and Innovate Finance have teamed up to establish a cross-company returner program, which aims to encourage professionals to try re-entering the Fintech industry after long-term or extended career breaks. UK’s digital bank Starling, Fintech Unicorn Klarna and PrimaryBid will reportedly take part in the initiative. The will provide 6-month returnship placements in Cardiff, London and Southampton, starting from January 2022 for qualified applicants who might have been away from the Fintech industry for 18 months (or longer).
Robinhood achieved its $32 billion IPO by democratizing trading. Detractors, however, view Robinhood as a mobile casino – a gamified mimicry of responsible investing. These detractors believe that a market correction will cull the new herd of retail investors. Democratization in finance will persist because it stems from deep, human aspirations. And if markets work better as a result, finance professionals should celebrate.
The announcement could come next week, according to the report, in which a Monzo spokesperson declined to comment. The Standard also reported recently that Revolut is working on a BNPL product of its own. Barclays will also enter the BNPL fray, joining PayPal, Afterpay, Clearpay and Klarna. Monzo’s BNPL rollout will feature affordability checks for customers, one of the sources told the Evening Standard. Monzo will also share customer data will also be shared with credit checking agencies, according to the report
Coinbase Global Inc. was warned by the Securities and Exchange Commission against launching a product that would allow consumers to earn interest on their crypto holdings. The U.S.’s biggest cryptocurrency exchange said it received a Wells notice saying the agency will bring an enforcement action if the company goes ahead with its Lend product. Coinbase expressed surprise at the SEC’s move, in a blog post, adding it plans to delay the launch at least until October. The agency has said it’s assessing Lend through Supreme Court cases called Howey from 1946 and Reves from 1990, Grewal said, adding that formal guidance about how the SEC plans to apply those tests to such products would be helpful.
The agencies released their Priority Guidance Plan for the 2021-2022 fiscal year on Thursday, and designing brokerage rules for crypto still makes the list. The Tax Administration portion of the document details: “Regulations regarding information reporting on virtual currency under §6045,” as one such priority. The IRS has been steadily beefing up its tools surrounding crypto, requesting an additional $32 million to boost its crypto and cyber operations in its recent budget report for the fiscal year 2022. IRS chief Charles Rettig has indicated that quelling crypto misreporting could be helpful in closing the tax gap, or the unreported sums of taxable funds.
While introducing 3DS2 is going to make a big difference in controlling online fraud, the new standard will only be a success if banks work hard with merchants and PSPs to help them understand their role, and how to take advantage of 3DS2’s benefits. As an EMVCo associate involved in evolving and managing 3DS standards, Netcetera has consummate experience in working with issuers and acquirers across the world on the 3DS2 rollout, and that experience has brought us several lessons which we hope to share with banks in Asia in this whitepaper.
More from PCN:
We are back with In Check with Fintech!
In partnership with MoneyPot, Money20/20‘s official podcast, we are excited to release a new episode featuring Sanjib Kalita, Editor in Chief at Money20/20. We get down to the evolution of Fintech eras and states, ultimately barreling into the unique drivers and challenges of Fintech 2.0. With the Money20/20 Europe conference around the corner from 21-23 September, we can expect more insights from thought leaders in Fintech.
Check our Podcast channel and look out for the episodes to come: https://paymentsandcards.podbean.com/
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