The Interchange is a weekly series that looks at the latest in the global financial industry. It is an amazing time to be a financial technology journalist. Over 20% of all venture dollars went into fintech startups last year, and I am excited about how this technology is helping boost inclusion all over the world. Consumers and businesses have forced more fintech to exist, and that is a good thing.
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The Better.com saga continues.
Better.com swung to a loss of more than $300 million last year, according to a filing by Aurora Acquisition Corp., the company that planned to merge with the company.
Aurora's filing says that Better's financial performance deteriorated as a result of numerous factors, including fluctuations in interest rates and the reorganization of its sales and operations teams.
The CEO of Better.com made headlines for being the target of multiple lawsuits by investors after he laid off 900 employees. The ongoing litigation is considered to be a risk factor for the company and INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals INRDeals It's shocking! Garg is involved in litigation that involves accusations that he mishandled intellectual property and trade secrets, converted corporate funds and failed to file corporate tax returns.
The filing goes on to detail that investors in a prior business venture claim they did not receive required accounting documentation and that Garg misappropriated funds that should have been distributed to them.
If the Better.com control is ever made public, the outcome of these lawsuits will have even more weight. In its apparent zeal to invest, SoftBank promised to give Garg the 1.9% voting rights tied to its original investment. The deal is set to create a public company CEO who could be rewarded for settlement of a lawsuit even if they have been involved in other bad behavior.
Fortune reported last week that one important detail was left out. Garg was not the company as a whole but he was responsible for any losses that SoftBank might have suffered. The Better Founder and CEO has agreed to enter into a side letter with SoftBank in his personal capacity, in which he may be liable for realized losses or receive payments in certain circumstances from SoftBank.
The amount of losses covered by the side letter is uncapped, and Garg alone remains responsible for all such losses, which could require him to sell a significant portion of his holdings in Better Home & Finance common stock.
Whoa. It shows a certain level of arrogance on the part of Garg, as well as an enormous amount of responsibility for one person to take on.
Garg sent an email to all current Better employees acknowledging personal responsibility for the $750 million cash injection provided by SoftBank last November. He admitted in the email that he personally guaranteed $750 million of the SoftBank investment because he wanted the capital to build our dream.
I might be foolish, but I believe in us. I believe in you.
The online mortgage lender failed to pay the correct taxes and many of their employees are having trouble collecting unemployment benefits. Better.com continues to screw over its employees even after they are laid off.
Multiple sources have said that Better.com offered its workers in India the option to leave under a voluntary separation agreement. The company had to put a cap on how many workers could leave due to the fact that more workers put their hands up. Closers and analysts who were allowed to leave were the majority of the workers who had their resignations accepted. One individual shared an email from HR India that said that the worker was part of a mission-critical team at Better.com. The need to offer voluntary separation to the company's India employees was due to recognition, according to an email from the operations team.
Multiple sources tell me that the company let go of a number of midlevel managers in the U.S.
The saga continues.
I reached out to Better.com for comment, but they didn't reply at the time of writing.
After seven years at Visa, Terry Angelos became the CEO of DriveWealth, a fractional investment trading startup. Terry told me that this is not his first time running a startup. He co-founded a company called TrialPay that was acquired by Visa.
Over the last 7 years, he told me, we have been focused on how Fintech companies innovate on Visa's global payment rails. DriveWealth will focus on becoming the default investment rail. There are over 1B people who have access to digital wallet and neobank services. The investment button on those apps allows consumers to purchase US equities. DriveWealth pioneered fractional investing and is the leading choice to power these apps.
I'm excited to join the team to bring the vision of DriveWealth to life and enable every person with a phone to be an investor. We have an opportunity to create change in the financial lives of millions by becoming the investment rail on which wallets and fintechs can innovate. Many people in the U.S. and abroad haven't been able to open a broker account due to traditional barriers like high minimums and whole shares, but DriveWealth's fractional share model can make this possible.
At its I/O developer conference last week, the company launched a new app called Google Wallet that will allow users to store things like credit cards, loyalty cards, digital IDs, transit passes, concert tickets, vaccination cards and more. Frederic Lardinois gives us all the information.
The cash sweep program will allow users to earn 1% interest on cash sitting un invested in their accounts. The company just introduced a stock lending feature. The company laid off 9% of its staff in the most recent quarter and reached all-time lows on its stock price. There is a cash sweep program here.
Deel will be integrated into the Brex Empower platform to support international payroll, benefits, taxes, and compliance. The startup raised $50 million at a $12 billion valuation. More on that here.
Current launched an application programming interface, a product that it said will help facilitate seamless integrations and embedded banking experiences for its customers. Current's first partner is Plaid, who will give the company's customers access to more than 6,000 apps and services powered by the data aggregation network.
Ali Heron is a CTO.
The public ones have seen a decline in prices recently. What happened to Affirm's and Upstart's stocks and what it means for the sector as a whole is what Alex Wilhelm looked at.
Afterpay will now be included as a payment option for merchants in several markets, including Australia, New Zealand, Canada, Europe, U.S., and the UK.
The credit card processing giant Visa announced a new installments partner program, Visa Ready for BNPL, which it said will fast-track implementation and scalability of the company's offering. Visa says the program allows tech companies that would like to have their own solution reach Visa's network of clients.
Bolt's valuation has increased from $250 million to $11 billion in three years. The New York Times takes a look at allegations that Ryan Breslow may have stretched the truth about how well the business was doing.
Nubank is one of the largest digital banks in the world. The company launched in Brazil with an in-app trading experience that allows users to invest BRL$ 1.00 (US $0.20).
Ali Heron has been named as the chief technology officer of Petal, a company that offers two Visa credit card products for consumers with little to no credit history. He joined Petal last year as head of engineering and has over two decades of experience in technology and finance, including 10 years at Microsoft. The move is part of the company's intent to broaden its team.
There has been talk of a funding slowdown, but Tifin seems to be an exception. The startup, based in Boulder, Colorado, raised a $109 million Series D round less than a year after its Series C round. After its Series C round, the company was valued at $447 million, but now it is valued at $842 million.
Paymob raised $50 million in Series B funding to help merchants accept digital payments. New York-based Kora Capital and London-based Clay Point led the round. It was the first check into a startup in the region, and is indicative of the exploding scene in the region. A startup founder told me that a lot of it is being driven by government initiatives. I had the pleasure of working on a Fintech Insider show with the Paymob commercial director and Barb Maclean. You will be able to watch that on May 16.
Checkout.com, which raised $1 billion, plans to acquire Ubble, which operates a remote identity verification service. Checkout.com isn't revealing the terms of the deal because it should close later this year. Checkout.com is adding a new product with this acquisition. Checkout.com customers don't have to use another company's digital identity verification.
Michael was the first in his family to attend college. He had trouble getting the financing to pay for his tuition. When he met Ayush Jain at the University of Southern California, they were both in agreement that credit access should be free. They came up with the idea of helping people build credit through recurring payment forms. Jay-Z wrote the first check into their startup, Altro, which just raised another $18 million.
Michael Broughton is the co- founder of Altro.
Infrastructure has so far felt insulated from the global venture downturn. Companies that offer banking as a service and help other businesses offer their own financial services and products continue to rake in the dollars. In Latin America, there is a company called Dock that operates a full-stack payments and digital banking platform. The startup has raised $110 million in a growth funding round led by Lightrock and Silver Lake Waterman.
Habi closed on $200 million in a Series C funding round. The company said that its revenue increased by 20x over the previous year. Habi says it has become the second unicorns in the country and the only LatAm one with a female founder and CEO.
Two women with experience in finance and luxury fashion are the co-owners of Luxus, which is hoping to make luxury gems the next hot alternative asset class for retail and institutional investors. The first offering of the pre-seed company will allow users to buy fractional shares in gemstones.
Meld is trying to solve the problem. TheFintech Stack as a Service is for developers to manage the chaos of integrating with various service providers. You can read more about it in the article, but it came out of the shadows with $8 million in seed money from Coatue.
The rise of digital payments has changed the nature of how people do business with each other, and open banking is leading to a wave of new integrations. A U.K. startup called Token.io has closed $40 million in funding to expand its own particular push in payments tech.
Thanks to advances in cloud computing and networking, and the flexibility of pay-as-you-use models that adapt to the evolving needs of a business, software as a service has become the default for how organizations adopt and use apps. Last week, a company called Paddle, which has built a large business out of providing the billing backend for those SaaS products, announced a large funding round of $200 million as it gears up for its own next stage of growth.
The travel insurance market is getting the same treatment from the likes of SafetyWing and Battleface as the insurance market did when Lemonade came along. In an ideal world, travel insurance would be easy to understand, would pay out quickly when things go wrong, and operate in its simplicity. The startup, which exited stealth mode last month, hopes to bring that kind of vibe with its approach. The startup got $8 million in a seed funding round. Global Founders Capital, as well as former NBA player Omri Casspi, were also participating.
A $23 million growth equity round was announced by Infinicept, a provider of embedded payments. The new capital will help the company meet rising demand for its embedded payment operations platform.
That is it for this week. It felt like there was more news than normal, which shows how much activity continues in the world of financial technology. Thank you so much for reading, and I'll see you next week!
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