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Fintech Roundup: Corporate spend just can’t be a winner-takes-all space

Welcome to my new weekly fintech focused column. I’ll be publishing this every Sunday, so in between posts, be sure to listen to the Equity podcast and hear Alex Wilhelm, Natasha Mascarenhas and me riff on all things startups! And if you want to have…

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Welcome to my new weekly fintech focused column. I’ll be publishing this every Sunday, so in between posts, be sure to listen to the Equity podcast and hear Alex Wilhelm, Natasha Mascarenhas and me riff on all things startups! And if you want to have this hit your inbox directly once it turns into a newsletter (soon!), sign up here.

The competition between corporate spend management startups is heating up. Here in the U.S., major players include Brex, Ramp, Airbase and now, TripActions.

I have talked at great length with the founders of Brex and Ramp in the past, as well as the individual in charge of that segment within TripActions. It is becoming increasingly clear to me that this is definitely not a winner-takes-all industry. 

In January, for example, Ramp co-founder Eric Glyman told me:

I think at times people have sort of bashed us and thought maybe this is a card for tech companies and we have many, but the majority of our customers are not startups, and they’re not tech companies. One of our large customers is a potato farm that’s been around since the 1940s and is looking to just modernize and automate a lot of core processes. I have a lot of respect for, and learn a lot, from others in our industry, but it is such a massive space.

The company also plans to expand its offering to include more features, including bill payments. 

Image Credits: Ramp co-founders Karim Atiyeh and Eric Glyman

For its part, Brex started its life focused on providing credit cards aimed mainly at startups and SMBs. It now aims to serve as a “financial operating system” for its customers, starting with a premium SaaS service it launched in 2021. Brex has also broadened the type of customer it serves, with co-CEO and co-founder Henrique Dubugras telling me in January that ​​while it continues to serve startups or e-commerce companies that might be smaller businesses with higher growth, it is now adapting to serve mid-market to larger businesses, which have different financial needs as they grow.

Late last year, I spoke with Michael Sindicich, general manager of TripActions Liquid (the company’s unit that is focused on general expense management), and he told me the company counts among its customers small SMB companies — from around the 200 employee range — to multi-global, large enterprises including some Fortune 500 companies.

He also added: “I think a place where we’ve focused really heavily is actually on expanding globally so being able to issue in different currencies, to reimburse in a bunch of currencies, to really provide a true global solution.”

I have not yet personally talked to Airbase’s Thejo Kote, but he did tell my colleague, Alex Wilhelm, last year that his company is focused more on the mid-market customer.  One thing is clear, all of these companies want to offer more than corporate cards, and it’s probably safe to say they’d all like to expand outside of the U.S.

For some context — in January, Brex confirmed it raised $300 million at a $12.3 billion valuation. Ramp has reportedly raised a round that boosted its valuation to $8 billion, according to The Information, although the company declined to comment when I reached out. Airbase raised $60 million last July, and more recently, TripActions (which after the COVID-19 pandemic expanded from being a primarily “corporate travel” startup to also, more broadly, a spend management company) was valued at $7.25 billion in October.

The companies all have similar missions in that they want to help companies — ranging from startups to mid-market companies to enterprises, depending on which of this group you are talking about — better manage their corporate spend with virtual cards and/or software.

So you can imagine the excitement that the fintech nerd in me felt this week as I reported about how not one, but two of the aforementioned players were involved in the funding round of a new startup, Pluto, that has emerged in the corporate spend space and is focused on the Middle East. Specifically, Ramp as a company and Airbase founder Thejo Kote backed Pluto in its $6 million seed round that was led by Global Founders Capital. This is notable in that Ramp and Airbase’s Kote backed a company that could be construed as a competitor — except that it’s not because none of the aforementioned players operate in the Middle East. 

So will Ramp end up buying Pluto like Brex bought Weav, the Israeli company it had invested in just months prior? That remains to be seen of course, but you know I’ll be paying close attention.

Image Credits: Pluto / Pluto co-founders CTO Nayeem Zen, CEO Mo Aziz, CPO Mohammed Ridwan

Public state of affairs

Meanwhile, if you had any doubts about the hot state of fintech, I expect they will be eased when you check out the findings that Matrix Partners uncovered in its annually published Fintech Index. In looking at the performance of public fintech versus the broader market in 2021, the firm found that its Fintech Index “significantly outperformed major public stock indexes as well as a basket of legacy financial service providers for the fifth year in a row.” As a reminder, the Matrix Fintech Index is a market-cap weighted index that tracks a portfolio of 25 leading public fintech companies. 

But not all public financial technology companies are doing so great. Case in point, PayPal — which could perhaps be viewed as one of the earliest fintechs — saw its shares last week drop by around 25% the morning following the company’s earnings report the night before. 

In my humble opinion, PayPal has become less user friendly over the years, and I’ve heard more than one complaint about it not backing up people who got hacked on its platform. It used to be the primary method for peer-to-peer payments. But these days, I hear much more often, “Can I Venmo you?” rather than “Can I PayPal you?” This is interesting, considering PayPal bought Venmo in 2013 and now Venmo seems to be growing more rapidly than PayPal’s core offering. 

Further evidence of this, according to PYMNTS, is that Venmo’s volume in the fourth quarter was up 29%, to $61 billion; for the year, Venmo volume gained 44%, to $230 billion. Part of the problem was that many of the gains in users that PayPal saw during the pandemic were not long-term, with a large number of people using the platform once and not returning. Not a great sign.

In other public company news, Block — formally known as Square — this week closed on its $29 billion buy of Afterpay, which we originally reported on here. Notably, this means that Square sellers can now offer buy now, pay later to customers through Afterpay.

Funding frenzy

Let’s move away from talk of public fintechs to the funding rounds raised by private ones. There were multiple rounds for fintech companies that we covered this week (and of course some that we could not get to). Here’s a quick summary:

  • Metronome, which helps SaaS companies charge on a usage basis using its APIs, raised a $30 million Series A led by a16z.
  • Withco, which sits at the intersection of fintech and proptech with a lease-to-own model for SMBs, emerged from stealth with $32 million in funding. Canaan, Founders Fund, Initialized and NFX are lead investors.
  • Nigerian investment app Bamboo raised $15 million in a Series A round co-led by Tiger Global and Greycroft, writes TC reporter Tage Kene-Okafor.
  • Bold, a technology company working to enable financial access to electronic payments in Colombia, raised $55 million in a Series B funding round led by Tiger Global Management.

    Image Credits: Bold

  • Trace Finance, a Brazilian fintech startup that aims to enable faster and more streamlined cross-border financing, announced a $4.3 million seed funding round.
  • Tribal Credit, a B2B payments and financing platform for emerging markets, raised $60 million in a Series B funding round led by SoftBank Latin America Fund. Coinbase Ventures also joined the financing, which saw participation from existing investors BECO Capital, QED Investors and Rising Tide. Here’s a story from last year when I covered the company’s Series A raise.
  • Taxfyle, which has been described as an “Uber for taxes,” said it oversubscribed a $20 million Series B financing round led by Fuel Venture Capital and IDC Ventures. 
  • R2, which works to enable payment processors, POS systems and marketplaces to offer financing to small and medium businesses in Latin America, raised $5.9 million in a round led by General Catalyst. 
  • Bengaluru-based Jar raised $32 million in a Tiger Global-led Series A financing round, just months after securing its seed funding. The seven-month-old fintech app is helping millions of Indians begin their investment and saving journeys, reports our own Manish Singh.

New funds

There was also an emergence of a couple of fintech-related funds. Miguel Armaza and Andrew Endicott raised $9.25 million for their fund, Gilgamesh Ventures. The early-stage firm is focused on investing in fintech companies in the U.S. and LatAm. Miguel, who is also just a very nice guy, has become a prominent podcast host via Fintech Leaders (which he founded) and the Wharton Fintech Podcast, which he co-hosted from January 2020 to August 2021 and grew 13x to a monthly audience of 130k.

Also, after spending the last 10 years as a partner investing in New York-based consumer startups at Lerer Hippeau and Collaborative Fund, Taylor Greene says he has “quietly” raised a $50 million fund for his new firm, Twelve Below. The fund will back seed-stage founders based in New York City with an emphasis on fintech and healthcare, “offering them the bespoke and individualized partnership they need to go-to-market.” To date, it has invested in Accrue Savings (seed lead), and three unannounced seed rounds in fintech and healthcare.

CEOs gone wild?

Better.com was in the news again last week as more top executives parted ways with the digital mortgage lender in the wake of CEO Vishal Garg’s return, just weeks after it was revealed that two board members had resigned from the company. I have the scoop with all sorts of juicy details here. Also, be sure to check out Connie Loizos’ excellent coverage of the fact that Bolt’s Ryan Breslow is no longer CEO of the fintech company he founded after his “fiery tirades” on Twitter ruffled more than just a few feathers.

Before I go — I was honored to be included in Belvo’s list of top fintech influencers and newsletters to follow in 2022. I’ve never before thought of myself as an influencer, but if the term pertains to fintech, I’ll gladly take it — especially as I am among stellar company on this list.

And that’s a wrap. I’d like to acknowledge that there were way too many men in this column’s edition, so more females in fintech to come. Have a great Sunday and see you next week!

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Spread & Containment

The Coming Of The Police State In America

The Coming Of The Police State In America

Authored by Jeffrey Tucker via The Epoch Times,

The National Guard and the State Police are now…

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The Coming Of The Police State In America

Authored by Jeffrey Tucker via The Epoch Times,

The National Guard and the State Police are now patrolling the New York City subway system in an attempt to do something about the explosion of crime. As part of this, there are bag checks and new surveillance of all passengers. No legislation, no debate, just an edict from the mayor.

Many citizens who rely on this system for transportation might welcome this. It’s a city of strict gun control, and no one knows for sure if they have the right to defend themselves. Merchants have been harassed and even arrested for trying to stop looting and pillaging in their own shops.

The message has been sent: Only the police can do this job. Whether they do it or not is another matter.

Things on the subway system have gotten crazy. If you know it well, you can manage to travel safely, but visitors to the city who take the wrong train at the wrong time are taking grave risks.

In actual fact, it’s guaranteed that this will only end in confiscating knives and other things that people carry in order to protect themselves while leaving the actual criminals even more free to prey on citizens.

The law-abiding will suffer and the criminals will grow more numerous. It will not end well.

When you step back from the details, what we have is the dawning of a genuine police state in the United States. It only starts in New York City. Where is the Guard going to be deployed next? Anywhere is possible.

If the crime is bad enough, citizens will welcome it. It must have been this way in most times and places that when the police state arrives, the people cheer.

We will all have our own stories of how this came to be. Some might begin with the passage of the Patriot Act and the establishment of the Department of Homeland Security in 2001. Some will focus on gun control and the taking away of citizens’ rights to defend themselves.

My own version of events is closer in time. It began four years ago this month with lockdowns. That’s what shattered the capacity of civil society to function in the United States. Everything that has happened since follows like one domino tumbling after another.

It goes like this:

1) lockdown,

2) loss of moral compass and spreading of loneliness and nihilism,

3) rioting resulting from citizen frustration, 4) police absent because of ideological hectoring,

5) a rise in uncontrolled immigration/refugees,

6) an epidemic of ill health from substance abuse and otherwise,

7) businesses flee the city

8) cities fall into decay, and that results in

9) more surveillance and police state.

The 10th stage is the sacking of liberty and civilization itself.

It doesn’t fall out this way at every point in history, but this seems like a solid outline of what happened in this case. Four years is a very short period of time to see all of this unfold. But it is a fact that New York City was more-or-less civilized only four years ago. No one could have predicted that it would come to this so quickly.

But once the lockdowns happened, all bets were off. Here we had a policy that most directly trampled on all freedoms that we had taken for granted. Schools, businesses, and churches were slammed shut, with various levels of enforcement. The entire workforce was divided between essential and nonessential, and there was widespread confusion about who precisely was in charge of designating and enforcing this.

It felt like martial law at the time, as if all normal civilian law had been displaced by something else. That something had to do with public health, but there was clearly more going on, because suddenly our social media posts were censored and we were being asked to do things that made no sense, such as mask up for a virus that evaded mask protection and walk in only one direction in grocery aisles.

Vast amounts of the white-collar workforce stayed home—and their kids, too—until it became too much to bear. The city became a ghost town. Most U.S. cities were the same.

As the months of disaster rolled on, the captives were let out of their houses for the summer in order to protest racism but no other reason. As a way of excusing this, the same public health authorities said that racism was a virus as bad as COVID-19, so therefore it was permitted.

The protests had turned to riots in many cities, and the police were being defunded and discouraged to do anything about the problem. Citizens watched in horror as downtowns burned and drug-crazed freaks took over whole sections of cities. It was like every standard of decency had been zapped out of an entire swath of the population.

Meanwhile, large checks were arriving in people’s bank accounts, defying every normal economic expectation. How could people not be working and get their bank accounts more flush with cash than ever? There was a new law that didn’t even require that people pay rent. How weird was that? Even student loans didn’t need to be paid.

By the fall, recess from lockdown was over and everyone was told to go home again. But this time they had a job to do: They were supposed to vote. Not at the polling places, because going there would only spread germs, or so the media said. When the voting results finally came in, it was the absentee ballots that swung the election in favor of the opposition party that actually wanted more lockdowns and eventually pushed vaccine mandates on the whole population.

The new party in control took note of the large population movements out of cities and states that they controlled. This would have a large effect on voting patterns in the future. But they had a plan. They would open the borders to millions of people in the guise of caring for refugees. These new warm bodies would become voters in time and certainly count on the census when it came time to reapportion political power.

Meanwhile, the native population had begun to swim in ill health from substance abuse, widespread depression, and demoralization, plus vaccine injury. This increased dependency on the very institutions that had caused the problem in the first place: the medical/scientific establishment.

The rise of crime drove the small businesses out of the city. They had barely survived the lockdowns, but they certainly could not survive the crime epidemic. This undermined the tax base of the city and allowed the criminals to take further control.

The same cities became sanctuaries for the waves of migrants sacking the country, and partisan mayors actually used tax dollars to house these invaders in high-end hotels in the name of having compassion for the stranger. Citizens were pushed out to make way for rampaging migrant hordes, as incredible as this seems.

But with that, of course, crime rose ever further, inciting citizen anger and providing a pretext to bring in the police state in the form of the National Guard, now tasked with cracking down on crime in the transportation system.

What’s the next step? It’s probably already here: mass surveillance and censorship, plus ever-expanding police power. This will be accompanied by further population movements, as those with the means to do so flee the city and even the country and leave it for everyone else to suffer.

As I tell the story, all of this seems inevitable. It is not. It could have been stopped at any point. A wise and prudent political leadership could have admitted the error from the beginning and called on the country to rediscover freedom, decency, and the difference between right and wrong. But ego and pride stopped that from happening, and we are left with the consequences.

The government grows ever bigger and civil society ever less capable of managing itself in large urban centers. Disaster is unfolding in real time, mitigated only by a rising stock market and a financial system that has yet to fall apart completely.

Are we at the middle stages of total collapse, or at the point where the population and people in leadership positions wise up and decide to put an end to the downward slide? It’s hard to know. But this much we do know: There is a growing pocket of resistance out there that is fed up and refuses to sit by and watch this great country be sacked and taken over by everything it was set up to prevent.

Tyler Durden Sat, 03/09/2024 - 16:20

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Low Iron Levels In Blood Could Trigger Long COVID: Study

Low Iron Levels In Blood Could Trigger Long COVID: Study

Authored by Amie Dahnke via The Epoch Times (emphasis ours),

People with inadequate…

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Low Iron Levels In Blood Could Trigger Long COVID: Study

Authored by Amie Dahnke via The Epoch Times (emphasis ours),

People with inadequate iron levels in their blood due to a COVID-19 infection could be at greater risk of long COVID.

(Shutterstock)

A new study indicates that problems with iron levels in the bloodstream likely trigger chronic inflammation and other conditions associated with the post-COVID phenomenon. The findings, published on March 1 in Nature Immunology, could offer new ways to treat or prevent the condition.

Long COVID Patients Have Low Iron Levels

Researchers at the University of Cambridge pinpointed low iron as a potential link to long-COVID symptoms thanks to a study they initiated shortly after the start of the pandemic. They recruited people who tested positive for the virus to provide blood samples for analysis over a year, which allowed the researchers to look for post-infection changes in the blood. The researchers looked at 214 samples and found that 45 percent of patients reported symptoms of long COVID that lasted between three and 10 months.

In analyzing the blood samples, the research team noticed that people experiencing long COVID had low iron levels, contributing to anemia and low red blood cell production, just two weeks after they were diagnosed with COVID-19. This was true for patients regardless of age, sex, or the initial severity of their infection.

According to one of the study co-authors, the removal of iron from the bloodstream is a natural process and defense mechanism of the body.

But it can jeopardize a person’s recovery.

When the body has an infection, it responds by removing iron from the bloodstream. This protects us from potentially lethal bacteria that capture the iron in the bloodstream and grow rapidly. It’s an evolutionary response that redistributes iron in the body, and the blood plasma becomes an iron desert,” University of Oxford professor Hal Drakesmith said in a press release. “However, if this goes on for a long time, there is less iron for red blood cells, so oxygen is transported less efficiently affecting metabolism and energy production, and for white blood cells, which need iron to work properly. The protective mechanism ends up becoming a problem.”

The research team believes that consistently low iron levels could explain why individuals with long COVID continue to experience fatigue and difficulty exercising. As such, the researchers suggested iron supplementation to help regulate and prevent the often debilitating symptoms associated with long COVID.

It isn’t necessarily the case that individuals don’t have enough iron in their body, it’s just that it’s trapped in the wrong place,” Aimee Hanson, a postdoctoral researcher at the University of Cambridge who worked on the study, said in the press release. “What we need is a way to remobilize the iron and pull it back into the bloodstream, where it becomes more useful to the red blood cells.”

The research team pointed out that iron supplementation isn’t always straightforward. Achieving the right level of iron varies from person to person. Too much iron can cause stomach issues, ranging from constipation, nausea, and abdominal pain to gastritis and gastric lesions.

1 in 5 Still Affected by Long COVID

COVID-19 has affected nearly 40 percent of Americans, with one in five of those still suffering from symptoms of long COVID, according to the U.S. Centers for Disease Control and Prevention (CDC). Long COVID is marked by health issues that continue at least four weeks after an individual was initially diagnosed with COVID-19. Symptoms can last for days, weeks, months, or years and may include fatigue, cough or chest pain, headache, brain fog, depression or anxiety, digestive issues, and joint or muscle pain.

Tyler Durden Sat, 03/09/2024 - 12:50

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Uncategorized

February Employment Situation

By Paul Gomme and Peter Rupert The establishment data from the BLS showed a 275,000 increase in payroll employment for February, outpacing the 230,000…

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By Paul Gomme and Peter Rupert

The establishment data from the BLS showed a 275,000 increase in payroll employment for February, outpacing the 230,000 average over the previous 12 months. The payroll data for January and December were revised down by a total of 167,000. The private sector added 223,000 new jobs, the largest gain since May of last year.

Temporary help services employment continues a steep decline after a sharp post-pandemic rise.

Average hours of work increased from 34.2 to 34.3. The increase, along with the 223,000 private employment increase led to a hefty increase in total hours of 5.6% at an annualized rate, also the largest increase since May of last year.

The establishment report, once again, beat “expectations;” the WSJ survey of economists was 198,000. Other than the downward revisions, mentioned above, another bit of negative news was a smallish increase in wage growth, from $34.52 to $34.57.

The household survey shows that the labor force increased 150,000, a drop in employment of 184,000 and an increase in the number of unemployed persons of 334,000. The labor force participation rate held steady at 62.5, the employment to population ratio decreased from 60.2 to 60.1 and the unemployment rate increased from 3.66 to 3.86. Remember that the unemployment rate is the number of unemployed relative to the labor force (the number employed plus the number unemployed). Consequently, the unemployment rate can go up if the number of unemployed rises holding fixed the labor force, or if the labor force shrinks holding the number unemployed unchanged. An increase in the unemployment rate is not necessarily a bad thing: it may reflect a strong labor market drawing “marginally attached” individuals from outside the labor force. Indeed, there was a 96,000 decline in those workers.

Earlier in the week, the BLS announced JOLTS (Job Openings and Labor Turnover Survey) data for January. There isn’t much to report here as the job openings changed little at 8.9 million, the number of hires and total separations were little changed at 5.7 million and 5.3 million, respectively.

As has been the case for the last couple of years, the number of job openings remains higher than the number of unemployed persons.

Also earlier in the week the BLS announced that productivity increased 3.2% in the 4th quarter with output rising 3.5% and hours of work rising 0.3%.

The bottom line is that the labor market continues its surprisingly (to some) strong performance, once again proving stronger than many had expected. This strength makes it difficult to justify any interest rate cuts soon, particularly given the recent inflation spike.

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