Welcome to my 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 officially turns into a newsletter on May 1, sign up here.
Last week, TechCrunch’s Kyle Wiggers gave us a glimpse into Plaid co-founder’s William Hockey’s latest venture: the platform for what he believes is the first bank of its kind: a “financial infrastructure” bank. To rephrase, Hockey has founded a bank called Column.
“[Column is] a nationally chartered bank but have built every facet of the technology from scratch,” Hockey told TechCrunch in an email interview. “We are both the bank and the technology provider.”
When Hockey decided to move on from Plaid, he said in a June 2019 tweet that the move was in part to make room for more “great leaders.” And maybe Hockey was also itching to start something new because for some people, one success only fuels the desire to create another.
I also wrote last week about how in mid-2020, – after raising nearly $180 million in debt and equity – short-term rental startup Lyric Hospitality had shuttered most of its locations in what was widely viewed as another pandemic casualty.
But the San Francisco company — which was out to help folks who struggled to decide between staying in a hotel or an Airbnb — wasn’t ready to go down without a fight. It has spun out the software side of its business, including a pricing tool for accommodation that it had built, and that spinout – Wheelhouse – raised $16 million in funding led by NEA, I reported last week.
Image Credits: Photo courtesy of Sextant Stays
At first glance, these two companies have little in common.
But dig a little deeper, and you can see – they actually do. Both stories represent a reinvention of sorts and both those pivots make me almost irrationally happy. In Hockey’s case, he was moving on from a very successful company that he’d founded – Plaid, which was almost bought by Visa but then wasn’t in a turn of events that was probably one of the best things to ever happen to the startup. That’s because in the time it took for Visa to announce its plans to buy Plaid and for the deal to fall apart, fintech exploded and so as of last August, Plaid was worth over $13 billion – more than double the $5.3 billion Visa was going to pay for it.
In the case of Wheelhouse, its predecessor company’s core team, led by co-founder Andrew Kitchell, didn’t give up in the face of a plunge in business. And neither did many of its investors. They salvaged the software side of their business and made its own standalone company – Wheelhouse, which Kitchell describes as “fintech platform for the $500 billion-plus flex rental space” that includes pricing and financing. In other words, its software is aimed at helping short-term and mid-length stay providers manage their properties and make more money off of them.
So why do these stories make me irrationally happy? In life, are we not constantly reinventing ourselves in the same way these founders have taken learnings from their good, and bad, experiences to move on? I don’t know about you, but I don’t even feel like the same person in many ways that I was five, 10, 15 or 20 years ago. Over the years, I’ve done a lot of things I’m proud of – and some things I’d like to forget. But all the while, I grew wiser and the person that I am today represents my learnings from all those experiences.
We are forced both in life and in business to adapt – sometimes to unexpected things like global pandemics and at other times, to things we know will happen but never really prepare for – like the death of a family member. We also adapt to success – with confidence and the desire to pay it forward (I hope) and do more great things.
Sorry to get all philosophical in what is meant to be a fintech-focused column. But what can I say? It’s been a week and I’m in a philosophical kind of mood. Don’t worry, it doesn’t happen often!
In other fintech news
Speaking of Plaid, the company introduced Plaid Income to over 40 customers in beta last year with the aim of helping streamline the process of income and employment verification, “making it entirely digital and within a few seconds.” Last week, the company rolled out Plaid Income more broadly to everyone with new features. With the new product, Plaid says it “aims to simplify the income and employment verification process for lenders, and in turn, consumers.”
Aaannnd, peaking of multi-billion companies, I exclusively covered spend management startup Brex’s second major acquisition last week. The company picked up a 10-person financial planning software startup, Pry Financials, for $90 million. The move was a testament to both Brex’s intent on moving more into being a software provider (and thus diversifying how it generates revenue) and its ongoing commitment to its original target customer: startups.
Since 2019, Pry has raised $4.2 million. Its software is aimed at helping seed to Series B companies do things like create models, budgets and “track critical financial metrics.” Co-founder and CEO Andy Su told me that when Brex CEO and co-founder Henrique Dubugras first approached him, he never expected it would result in an acquisition.
In Su’s own words:
He told me that he really loves what Pry is doing and thinks it could do really well within Brex. And I thought he was just being nice, you know? And just being encouraging to another fellow founder. But it turns out, he really meant it.
Gotta love it.
Image Credits: Pry Financials
On a less positive note – once again, Better.com was in the news as the company (sadly) followed through on the scoop I had from the week before: laying off more people. Unlike in its two previous rounds of layoffs over the past five months, the online mortgage lender didn’t say how many people it let go – but it’s believed, according to multiple sources, to be anywhere from 1,200 to 1,500. If true, that would mean the company has effectively cut its headcount in half since December 1, 2021. It seems not enough folks took advantage of its voluntary resignation plan.
Meanwhile, remember that leaked video of a post-layoffs meeting the incredible Zack Whittaker and I reported on a few weeks back? Well, that video is now available for all to view on YouTube. And it’s not pretty.
On a more consumer-y note, PayPal and Venmo are increasing their instant transfer fees for both consumers and merchants in the United States in the coming weeks, PayPal announced on April 21. Instant transfers allow customers to transfer their money instantly to a bank account or debit card for a fee.
For personal accounts on PayPal and consumer and business profiles on Venmo, users will pay 1.75% of the transfer amount, with a minimum fee of $0.25 and a maximum fee of $25. Prior to this change, the instant transfer pricing for personal accounts on PayPal and consumer and business profiles on Venmo was 1.5% of the transfer amount, with a minimum fee of $0.25 and a maximum fee of $15. TC’s Aisha Malik gives us the scoop here.
On April 21, Marqeta announced its new RiskControl product suite aimed at helping card issuers combat payment card fraud. The company says that global card payments are increasing annually, with more than 450 billion card payments processed in 2020 alone. So it’s only logical that fraud is up as well.
“When we talk to our customers, the threat of payment fraud comes up consistently as one of their biggest business concerns. We’re seeing fraud increases worldwide weigh heavily on card issuers and processors, intensifying the need to offer highly effective risk and fraud management solutions that are tailored to individual cardholder experiences,” said Randy Kern, Chief Technology Officer of Marqeta, in a statement
Spend management startup Airbase, which targets mid-market companies, is hosting its first annual conference: Off the Ledger LIVE!, on April 26. The virtual one-day event is free to attend and will feature five CPE-eligible sessions featuring folks such as former Oracle CFO Jeff Epstein; Doximity CFO Anna Bryson; Jenny Bloom, former CFO at Zapier and MailChimp; Menlo Ventures Partner Matt Murphy, among others. Session topics will include fundraising, data, automation and remote teams.
“Finance teams are typically asked to do more with less. As companies scale, they are definitely the team that doesn’t grow linearly,” said Airbase Founder and CEO Thejo Kote. Learn more here.
A couple of weeks back, Tage covered some startling allegations against Olugbenga Agboola, CEO of African fintech Flutterwave. The executive was initially quiet but on April 19, he addressed those allegations for the first time in an email to employees. In this piece for TechCrunch, Tage breaks down what Agboola had to say in response, and perhaps even more importantly, what he didn’t have to say.
Publicly-traded WEX, which has a market cap of $7.57 billion and provides payment processing for the fleet industry, is launching a new effort called Flume, a digital wallet which the company claims could help “upwards of 30 million small businesses that are excluded from the digital payments market.” WEX says Flume is the first outgrowth of WEX Ventures, the company’s in-house R&D – or incubator – dedicated to creating new products.
According to WEX: “Unlike most payment platforms focused on digitally enabled companies, Flume aims to help close the digital divide for overlooked trade-oriented businesses initially with less than $15 million in annual revenue.”
We’ve been talking for a while about how hot LatAm is. Last week, Ingrid gave us another example of that when she reported on Netherlands-based PayU, a fintech business controlled by Prosus with operations in 50+ countries, announced a double-deal to expand its presence in the region. The company acquired Ding, a mobile payments platform; and it led a $46 million investment into Treinta, a financial “superapp” aimed at small businesses. Both are based in Colombia. Y Combinator alum Treinta, which launched only 18 months ago, has 4 million customers. PayU has been described as the PayPal of emerging markets. More here.
Fundings
The digital transformation of banking and payments services is a red-hot trend that’s shown no signs of slowing down. Banking-as-a-service (BaaS) products like Synapse, Unit and Bond have helped fuel the shift by allowing companies to quickly spin up new financial services using APIs.
NovoPayment is a global BaaS company based in Miami that has largely been focused on offering its API platform to customers in the Latin American market. It has developed a full-stack, multicurrency solution with three main categories — data banking, payment infrastructure and card solutions, its founder and CEO Anabel Perez told TechCrunch.
Founded in 2007 by Perez and Oscar Garcia Mendoza, who now serves as chairman of NovoPayment’s board, NovoPayment had been bootstrapped since inception until it raised its Series A round earlier this year, TC’s Anita Ramaswamy reported last week. It previously raised a seed round of undisclosed size from its own founders, but the $19 million Series A marks its first institutional fundraise, according to Perez, who worked as a banker in Venezuela for two decades prior to launching NovoPayment.
Moving on to Europe. Despite the fact that immigrants to a new country can often be cash rich, they have no credit history in their new country. Plus, a consumer cannot take their credit file from one country to another. Furthermore, credit bureaus are rarely coordinated or joined up across countries. The upshot of this is that those that can get credit find themselves paying a disproportionately higher cost of borrowing. And immigrants have to start again every time they move to another country.
Companies like CapOne, Vanquis and NewDay have been promising to focus on this, but the problem remains a thorny one to solve. Credit fintech startups like Yonder, (raised £25.9 million), Keebo (raised $6.9 million) and Tymit ($21.5 million) are attempting to address this.
Fintech NovoPayment’s founder and CEO Anabel Perez
Adding to this roster is fintech startup Pillar, which has now raised a pre-seed round of £13 million ($16.9 million) led by Global Founders Capital and Backed VC, reported TC’s Mike Butcher last week. The company claims it will be able to provide immigrants with access to credit products when moving to a new country.
Founded by Revolut alumni Ashutosh Bhatt and CTO, Adam Lewis, Pillar has an Open Banking-led data and analytics engine that will be launched in Q3 of this year. Last week, we also covered
Welcome Technologies and its recent raise for its immigrant-focused offering.
Can we just talk about how nearly $17M for a pre-seed round is just crazy considering that just a few short years ago, we were reporting on $17M Series As (and possibly even Bs)! But now, we don’t even blink an eye.
That’s it for this edition. This week marks the last time I will publish my Fintech Roundup before it graduates to an official newsletter. Eeek! I’m so excited. Thanks for joining me on this ride!! Have a wonderful weekend.
It was Jan. 11, 2024 when software giant Microsoft (MSFT) briefly passed Apple (AAPL) as the most valuable company in the world.
Microsoft's stock closed 0.5% higher, giving it a market valuation of $2.859 trillion.
It rose as much as 2% during the session and the company was briefly worth $2.903 trillion. Apple closed 0.3% lower, giving the company a market capitalization of $2.886 trillion.
"It was inevitable that Microsoft would overtake Apple since Microsoft is growing faster and has more to benefit from the generative AI revolution," D.A. Davidson analyst Gil Luria said at the time, according to Reuters.
The two tech titans have jostled for top spot over the years and Microsoft was ahead at last check, with a market cap of $3.085 trillion, compared with Apple's value of $2.684 trillion.
Analysts noted that Apple had been dealing with weakening demand, including for the iPhone, the company’s main source of revenue.
Demand in China, a major market, has slumped as the country's economy makes a slow recovery from the pandemic and competition from Huawei.
Sales in China of Apple's iPhone fell by 24% in the first six weeks of 2024 compared with a year earlier, according to research firm Counterpoint, as the company contended with stiff competition from a resurgent Huawei "while getting squeezed in the middle on aggressive pricing from the likes of OPPO, vivo and Xiaomi," said senior Analyst Mengmeng Zhang.
“Although the iPhone 15 is a great device, it has no significant upgrades from the previous version, so consumers feel fine holding on to the older-generation iPhones for now," he said.
A man scrolling through Netflix on an Apple iPad Pro. Photo by Phil Barker/Future Publishing via Getty Images.
Counterpoint said that the first six weeks of 2023 saw abnormally high numbers with significant unit sales being deferred from December 2022 due to production issues.
Apple is planning to open its eighth store in Shanghai – and its 47th across China – on March 21.
The company also plans to expand its research centre in Shanghai to support all of its product lines and open a new lab in southern tech hub Shenzhen later this year, according to the South China Morning Post.
Meanwhile, over in Europe, Apple announced changes to comply with the European Union's Digital Markets Act (DMA), which went into effect last week, Reuters reported on March 12.
Beginning this spring, software developers operating in Europe will be able to distribute apps to EU customers directly from their own websites instead of through the App Store.
"To reflect the DMA’s changes, users in the EU can install apps from alternative app marketplaces in iOS 17.4 and later," Apple said on its website, referring to the software platform that runs iPhones and iPads.
"Users will be able to download an alternative marketplace app from the marketplace developer’s website," the company said.
Apple has also said it will appeal a $2 billion EU antitrust fine for thwarting competition from Spotify (SPOT) and other music streaming rivals via restrictions on the App Store.
The company's shares have suffered amid all this upheaval, but some analysts still see good things in Apple's future.
Bank of America Securities confirmed its positive stance on Apple, maintaining a buy rating with a steady price target of $225, according to Investing.com.
The firm's analysis highlighted Apple's pricing strategy evolution since the introduction of the first iPhone in 2007, with initial prices set at $499 for the 4GB model and $599 for the 8GB model.
BofA said that Apple has consistently launched new iPhone models, including the Pro/Pro Max versions, to target the premium market.
Analyst says Apple selloff 'overdone'
Concurrently, prices for previous models are typically reduced by about $100 with each new release.
This strategy, coupled with installment plans from Apple and carriers, has contributed to the iPhone's installed base reaching a record 1.2 billion in 2023, the firm said.
Apple has effectively shifted its sales mix toward higher-value units despite experiencing slower unit sales, BofA said.
This trend is expected to persist and could help mitigate potential unit sales weaknesses, particularly in China.
BofA also noted Apple's dominance in the high-end market, maintaining a market share of over 90% in the $1,000 and above price band for the past three years.
The firm also cited the anticipation of a multi-year iPhone cycle propelled by next-generation AI technology, robust services growth, and the potential for margin expansion.
On Monday, Evercore ISI analysts said they believed that the sell-off in the iPhone maker’s shares may be “overdone.”
The firm said that investors' growing preference for AI-focused stocks like Nvidia (NVDA) has led to a reallocation of funds away from Apple.
In addition, Evercore said concerns over weakening demand in China, where Apple may be losing market share in the smartphone segment, have affected investor sentiment.
And then ongoing regulatory issues continue to have an impact on investor confidence in the world's second-biggest company.
“We think the sell-off is rather overdone, while we suspect there is strong valuation support at current levels to down 10%, there are three distinct drivers that could unlock upside on the stock from here – a) Cap allocation, b) AI inferencing, and c) Risk-off/defensive shift," the firm said in a research note.
Major typhoid fever surveillance study in sub-Saharan Africa indicates need for the introduction of typhoid conjugate vaccines in endemic countries
There is a high burden of typhoid fever in sub-Saharan African countries, according to a new study published today in The Lancet Global Health. This high…
There is a high burden of typhoid fever in sub-Saharan African countries, according to a new study published today in The Lancet Global Health. This high burden combined with the threat of typhoid strains resistant to antibiotic treatment calls for stronger prevention strategies, including the use and implementation of typhoid conjugate vaccines (TCVs) in endemic settings along with improvements in access to safe water, sanitation, and hygiene.
Credit: IVI
There is a high burden of typhoid fever in sub-Saharan African countries, according to a new study published today in The Lancet Global Health. This high burden combined with the threat of typhoid strains resistant to antibiotic treatment calls for stronger prevention strategies, including the use and implementation of typhoid conjugate vaccines (TCVs) in endemic settings along with improvements in access to safe water, sanitation, and hygiene.
The findings from this 4-year study, the Severe Typhoid in Africa (SETA) program, offers new typhoid fever burden estimates from six countries: Burkina Faso, Democratic Republic of the Congo (DRC), Ethiopia, Ghana, Madagascar, and Nigeria, with four countries recording more than 100 cases for every 100,000 person-years of observation, which is considered a high burden. The highest incidence of typhoid was found in DRC with 315 cases per 100,000 people while children between 2-14 years of age were shown to be at highest risk across all 25 study sites.
There are an estimated 12.5 to 16.3 million cases of typhoid every year with 140,000 deaths. However, with generic symptoms such as fever, fatigue, and abdominal pain, and the need for blood culture sampling to make a definitive diagnosis, it is difficult for governments to capture the true burden of typhoid in their countries.
“Our goal through SETA was to address these gaps in typhoid disease burden data,” said lead author Dr. Florian Marks, Deputy Director General of the International Vaccine Institute (IVI). “Our estimates indicate that introduction of TCV in endemic settings would go to lengths in protecting communities, especially school-aged children, against this potentially deadly—but preventable—disease.”
In addition to disease incidence, this study also showed that the emergence of antimicrobial resistance (AMR) in Salmonella Typhi, the bacteria that causes typhoid fever, has led to more reliance beyond the traditional first line of antibiotic treatment. If left untreated, severe cases of the disease can lead to intestinal perforation and even death. This suggests that prevention through vaccination may play a critical role in not only protecting against typhoid fever but reducing the spread of drug-resistant strains of the bacteria.
There are two TCVs prequalified by the World Health Organization (WHO) and available through Gavi, the Vaccine Alliance. In February 2024, IVI and SK bioscience announced that a third TCV, SKYTyphoid™, also achieved WHO PQ, paving the way for public procurement and increasing the global supply.
Alongside the SETA disease burden study, IVI has been working with colleagues in three African countries to show the real-world impact of TCV vaccination. These studies include a cluster-randomized trial in Agogo, Ghana and two effectiveness studies following mass vaccination in Kisantu, DRC and Imerintsiatosika, Madagascar.
Dr. Birkneh Tilahun Tadesse, Associate Director General at IVI and Head of the Real-World Evidence Department, explains, “Through these vaccine effectiveness studies, we aim to show the full public health value of TCV in settings that are directly impacted by a high burden of typhoid fever.” He adds, “Our final objective of course is to eliminate typhoid or to at least reduce the burden to low incidence levels, and that’s what we are attempting in Fiji with an island-wide vaccination campaign.”
As more countries in typhoid endemic countries, namely in sub-Saharan Africa and South Asia, consider TCV in national immunization programs, these data will help inform evidence-based policy decisions around typhoid prevention and control.
###
About the International Vaccine Institute (IVI)
The International Vaccine Institute (IVI) is a non-profit international organization established in 1997 at the initiative of the United Nations Development Programme with a mission to discover, develop, and deliver safe, effective, and affordable vaccines for global health.
IVI’s current portfolio includes vaccines at all stages of pre-clinical and clinical development for infectious diseases that disproportionately affect low- and middle-income countries, such as cholera, typhoid, chikungunya, shigella, salmonella, schistosomiasis, hepatitis E, HPV, COVID-19, and more. IVI developed the world’s first low-cost oral cholera vaccine, pre-qualified by the World Health Organization (WHO) and developed a new-generation typhoid conjugate vaccine that is recently pre-qualified by WHO.
IVI is headquartered in Seoul, Republic of Korea with a Europe Regional Office in Sweden, a Country Office in Austria, and Collaborating Centers in Ghana, Ethiopia, and Madagascar. 39 countries and the WHO are members of IVI, and the governments of the Republic of Korea, Sweden, India, Finland, and Thailand provide state funding. For more information, please visit https://www.ivi.int.
Incidence of typhoid fever in Burkina Faso, Democratic Republic of the Congo, Ethiopia, Ghana, Madagascar, and Nigeria (the Severe Typhoid in Africa programme): a population-based study
We’ve added 60% to national debt since 2018. Germany - a country with major economic woes - added ‘just’ 32%.
Maybe it will never matter. Maybe MMT is real. Maybe we just cancel or inflate it out. Maybe career real estate borrowers or career politicians aren’t the answer.
I have no idea. Only time will tell. But it’s going to be fascinating to watch it play out.
He is right: it will be fascinating, and the latest budget deficit data simply confirmed that the day of reckoning will come very soon, certainly sooner than the two years that One River's Eric Peters predicted this weekend for the coming "US debt sustainability crisis."
According to the US Treasury, in February, the US collected $271 billion in various tax receipts, and spent $567 billion, more than double what it collected.
The two charts below show the divergence in US tax receipts which have flatlined (on a trailing 6M basis) since the covid pandemic in 2020 (with occasional stimmy-driven surges)...
... and spending which is about 50% higher compared to where it was in 2020.
The end result is that in February, the budget deficit rose to $296.3 billion, up 12.9% from a year prior, and the second highest February deficit on record.
And the punchline: on a cumulative basis, the budget deficit in fiscal 2024 which began on October 1, 2023 is now $828 billion, the second largest cumulative deficit through February on record, surpassed only by the peak covid year of 2021.
But wait there's more: because in a world where the US is spending more than twice what it is collecting, the endgame is clear: debt collapse, and while it won't be tomorrow, or the week after, it is coming... and it's also why the US is now selling $1 trillion in debt every 100 days just to keep operating (and absorbing all those millions of illegal immigrants who will keep voting democrat to preserve the socialist system of the US, so beloved by the Soros clan).
... having already surpassed total US defense spending and soon to surpass total health spending and, finally all social security spending, the largest spending category of all, which means that US debt will now rise exponentially higher until the inevitable moment when the US dollar loses its reserve status and it all comes crashing down.
We conclude with another observation by CNBC's Brian Sullivan, who quotes an email by a DC strategist...
.. which lays out the proposed Biden budget as follows:
The budget deficit will growth another $16 TRILLION over next 10 years. Thats *with* the proposed massive tax hikes.
Without them the deficit will grow $19 trillion.
That's why you will hear the "deficit is being reduced by $3 trillion" over the decade.
No family budget or business could exist with this kind of math.
Of course, in the long run, neither can the US... and since neither party will ever cut the spending which everyone by now is so addicted to, the best anyone can do is start planning for the endgame.
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