The interchange is welcome. Thank you for signing up and voting for confidence after you received this. If you read this as a post on our site, you should sign up here so you can receive it in the future. I take a look at the hottest news from the last week. This will include everything from funding rounds to trends to an analysis of a particular space. My job is to stay on top of the news and make sense of it so I can keep you up to date.
At the end of last week, Wealthfront snuck in an announcement that the deal in which it was to be acquired by Switzerland's largest bank, UBS, had been scrapped. Wealthfront reported that the company had a valuation of over one billion dollars.
A number of questions were raised after the deal fell through as part of amutual agreement.
In a September 2 post, the CEO of Wealthfront said he was excited about the company's path forward as an independent company.
It said it remained committed to its growth plans in the US and strengthened its digital offering.
Both companies talked about how combining forces would help their businesses grow.
David Goldstone, manager of investment research at Condor Capital, said in an interview that he was surprised the deal was nixed.
It's not good for the company. The failure of the deal is a big blow to the Swiss lender's efforts to expand in the U.S.
The announcements surrounding the falling apart of the deal gave no clue as to why the agreement was dissolved.
According to a source familiar with the situation, the deal collapse came as a result of regulatory concerns being raised in the past several weeks.
I reached out to Wealthfront, but they told me that they can't discuss more than what's been said in their press release or in the public eye.
I have been told that Wealthfront's cash account brought in over $1 billion in August. The number of employees at the company has grown 15% over the last year. Alex is interested in the company's assets under management.
This is not the first time we have seen a deal fall apart due to regulatory concerns. The Visa plan to buy Plaid for $5.3 billion was scrapped in January 2021. It was argued that it was the best thing that could have happened to Plaid, since the data-focused APIs startup ended up being valued at $13.4 billion after raising $425 million less than three months later.
It is a very different environment than it was then. The companies are operating in different places. Will this be a blessing in disguise for Wealthfront or not?
The image was created by Somyot Techapuwapat.
The tension between banks and fintechs has been an issue for a long time. This type of teaming up has bank regulators worried. The acting comptroller of the currency in the U.S. warned that the rise of digital banking could lead to financial risks and a crisis over the long term. The increase of fintech companies into the traditional financial sector, including via partnerships with banks, was creating more complexity and de-integration. In an effort to provide a seamless customer experience, banks and tech firms are teaming up in ways that make it more difficult for regulators to differentiate between where the bank stops and where the tech firm starts... Is it possible for us all to get along?
YC demo day took place this past week, andNatasha Mascarenhas led editorial coverage. One-fifth of the cohort is working on solving issues in the financial space, according to the report. The pitches ranged from building the Square for micro-merchants in Latin America to creating a way to angel invest in your favorite athlete More on that can be found here.
CashEx, a currency exchange platform that uses artificial intelligence to help U.S.-based African migrants transfer money to Africa without fees, was one of the recipients.
The London-based financial infrastructure startup, whose $65 million raise I covered in the spring, is opening an office in San Francisco and appointing a new COO. I was told by the company thatSyed will lead the go-to-market and operational activities of the business. He has a great deal of experience in the payments industry.
I wrote about Arrived, a startup that gives people a way to invest in single- family rentals. This past week, the company announced it would allow people to buy shares in short term vacation rentals. Its first markets are Joshua Tree, California, and Nashville, Tennessee. The CEO and co-founder of Arrived said in a statement: "Platforms likeAirbnb have helped vacation rental owners generate over $150 billion in rental income from serving 1 billion guest arrivals and yet less than 1% of these guests have been able to access the wealth-building." Adding these assets to our platform will change that. Last week I wrote about a company called Landa.
eToro, a competitor that describes itself as the social investing network, announced the introduction of ESG scores for over 2,700 stocks on its platform. A traffic-light system with assets labeled as green, amber or red will be used to determine scores as part of the partnership. I wrote about how the company is acquiring a startup that wants to go head-to-head against a competitor.
Tage Kene-Okafor writes that the Central Bank of Nigeria is regarded as the most valuable payments processing license in the world. The company said the license will allow it to offer transaction switching and card processing services to customers as well as to enable transactions between banks and other financial institutions. Flutterwave had two lower tier payments and money transfer licenses but relied on other companies to process and settle payments for its clients. Flutterwave expects to be less dependent on other parties for the payments it processes, and it has been quietly building new products.
Some companies in the proptech space have been struggling as of late after burning through a lot of cash. Another proptech reached out to me with a different story. Harrison Montgomery, Aireal's head of growth, told me in an email that his company is doing well. The 9-year-old company has raised more than $2 million and has a mean mindset. There are multiple angel investors that work in the real estate industry. Aireal doesn't operate as a fintech It specializes in proprietary augmented reality and interactive web experiences that allow builders to visualize and personalize unbuilt structures before breaking ground. Montgomery says some of the basic structures of its technology are similar, and that it can provide data on howImmersive technologies impact user purchasing decisions and customer spending habits.
A couple of weeks ago, I talked about the different types of financial services. I didn't go to a company. DonateStock has a simple goal: to make stock gift giving easy for everyone. Steve Latham told me that most investors don't know that donating stock can help them avoid capital gains taxes. He said investors can donate stock in minutes at no cost on a nonprofit's website or at his own site. The startup can convert stock to cash for nonprofits that don't have a broker. DonateStock has grown to 750+ registered nonprofits (up 30x in 12 months) while processing $10 million in stock donations, according to Latham. He said that they plan to double their business over the next year by making their Easy Button for stock gifting available to online giving platforms. The company has raised $2 million from family offices, angels and Capital Factory. Latham said that they could do well by doing good.
This image was taken at TechCrunch.
Demand for its corporate spend offering surged as the company closed on $60 million.
Credix is a platform that connects institutional lenders with emerging market technology.
It's another week in the book. All is well in your world. I have a lot of interesting stories planned for next week. Take good care until then.
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