My new column is focused on financial services. I will be publishing this every Sunday so be sure to listen to the Equity show and hear me and Alex talk about all things startup. Once it becomes a newsletter, you can sign up here to have it hit your inbox directly.
I published my first investor survey on the internet. I plan to do this on a quarterly basis. I asked 10 investors who are active and frequently back fintech startups a few questions such as what criteria they use when evaluating potential investments and what is the best way to pitch them. The investors were very forthcoming with their information. If you're a startup looking for funding, they shared how you could pitch them. Latin America came up multiple times, but other regions that investors are eyeing include Europe and Africa. I'm glad investors are taking notice of the fact that fintech is becoming a big deal globally, as it also means increased inclusion in many of these regions. Several areas of interest came up.
Mark Fiorentino noted that the definition of a founder's market was in 2021. The end markets for fintech are massive and, in many cases, larger than we realized, according to the managing director of Insight Partners.
The new $225 million fund was triple the size of the last fund, and it was announced this week. It's good news for early-stage companies. BTV focuses on investing in companies that are pre-seed and seed. It wants to be able to back companies as they grow. It has allocated $150 million of its new fund to invest at their earliest stages, but has also reserved $75 million for an opportunity fund for follow-on investments. The two co-founders of NerdWallet got a lot of love on social media when they announced their new fund.
The pair are not deterred by the fact that everyone is a fintech investor.
We think we can have the most impact at the seed stage, and we love being the first call.
Corporate spend management companies backed by the firm include Albert, Clearco, Selfbook and Human Interest.
Jake and Sheel are from Better Tomorrow Ventures.
This week, it was the topic of the week. I covered how Deel is giving employers a way to run their payrolls in digital currency and how a top official of India reported on how they are doing it. Romain Dillet told us that Circle has terminated its previous agreement with Concord Acquisition Corp., a publicly traded blank-check company, and reached a deal with Concord Acquisition Corp. for a new merger. Circle will become a public company at a $9 billion valuation if that transaction goes through.
This past week was no exception, as there was always a shortage of funding in the space. Here are some good ones and some we didn't.
Africa.
Stitch raised $21 million for its infrastructure and platform.
The company raised $250 million in a Series D round that tripled its valuation in a year. Tage gave us all the information.
Europe.
Intergiro, a Swedish startup that has been stealth-mode, privately funded, boot-strapped for the last five years, is now emerging as part of the embedded banking movement.
He reported on Banked's Series A funding round led by Bank of America and France and its plans for a US expansion.
Ageras Group is a startup out of Denmark that has built a platform that provides both accountancy software and a marketplace for small and medium businesses to find accountants. A single investor, Lugard Road Capital, invested $73 million in the company.
Asia.
SoftBank Vision Fund 2 led the funding societies raise. Alternative forms of credit scoring are used by the Singaporean fintech, which claims to be the region's largest SME digital financing platform.
LatAm.
I reported on how Mundi, a financial services platform for cross-border trade, raised $16 million in a Series A funding round. It is remote-first with operations in Mexico City.
Neon, a Brazilian digital bank, raised $300 million from Spain'sBBVA, which is one of the largest financial institutions in the world. The chairman ofBBVA said that Neon has an offering that is connected to Brazilians' financial needs. It has the ability to grow quickly, considering how it launches products with such agility in a market with as much potential as Brazil.
Sao Paolo-based Trace Finance, which describes itself as a mix of Brex, Wise withcryptocurrencies on top, announced a $4.3 million seed funding round. The company says it makes cross-border banking simpler for LatAm startups. The process for Latin American companies to get financing in the US is something that Trace wants to improve.
The process for these companies is very bureaucratic. They have to open an account with Silicon Valley Bank in the Cayman Islands, pay 4% in fees, wait over a month, and so on, because Latin American banks are so strict with capital controls. A lot of the regulatory concerns upfront are taken care of by Trace. Financing is available in 1-2 days and a fee of 0.20%. This is something to watch as startup investment in Brazil has grown over the past 3 years.
The United States.
It's always fun to see a company that I covered at a very early stage go on to raise more capital in a short amount of time. I enjoy reporting on companies that tackle important industries. Affirm's Max Levchin, William Hockey, Unit's Itai Damti, and Flexport's Ryan Petersen are some of the company's founding fathers.
Genesis, which has built a low-code/no-code application platform specifically for the financial markets, received a $200 million investment from Tiger Global Management. Most of the company's leadership team is located in the U.S., I was told.
Homebound, which was founded by Opendoor and Twilio, received a $75 million Series C round, as well as a $20 million Series A raise.
Check, a New York-based payroll infrastructure company that lets platforms integrate payroll into their products, raised a $75 million Series C led by Stripe with participation from existing investors Bedrock, Thrive and Index. The company told me that the money was raised at a post-money valuation of $725 million and that it now powers payroll for platforms that serve 250K businesses and 4M employees across the country. The infrastructure is hot.
An $11 million Series A extension led by G Squared closed on And Tilled, which describes itself as a PayFac-as-a-Service provider. It also launched payments in other languages.
I did an analysis of the corporate spend space a couple of weeks ago. Alex reported this week that Airbase, a startup in the corporate spend space, is working with Amex on a pilot that will see its service offered to certain customers of the credit giant. It feels like a big deal for Airbase, which some think could be an acquisition target for Amex and a no-brainer for the credit card giant who wouldn't have to build.
Sundae, a residential real estate marketplace that pairs sellers of distressed properties with potential buyers, entered the lending market with a new finance option for investors. I covered the company's Series C last summer.
The first acquisition by SentiLink was Upstream Logix, which provides data intelligence for alternative finance. Affirm employees founded SentiLink, which raised $70 million last August, and brought with it powerful insights to underserved consumers and the creditor that serve their financial needs, facilitating accurate risk assessment and enabling consumers to gain access to credit.
NPR did a deep dive on how Fast CEO Domm Holland pissed off a lot of people in Australia before starting his San Francisco startup that offers one-click checkout and password storage.
I ended the week at Better.com again. Potential layoffs and employee turmoil are not topics that are fun to report on. What has happened at the online mortgage lender over the past 11 weeks is pretty crazy. Four more senior executives have resigned and the company could lay off 40% to 50% of its staff in March, as I covered in my latest on the company.
Plaid shared some fun facts about the Super Bowl. On the day of the Super Bowl, the company told me that it had signed up nearly half a million people for a new app. The co-founder of the company excitedly exclaimed "It's the Fintech Bowl!" on the social networking site.
I'm out here and excited to spend the rest of the long weekend with my kids. Hope you are enjoying your time. Next Sunday, see you!
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