My new column is focused on financial services. I will be publishing this every Sunday, so be sure to listen to the Equity podcast and hear me and Alex talk about everything. Once it becomes a newsletter on March 27th, you can sign up here to have this hit your inbox directly.
It was a busy week for financial news.
There has been an inherent tension between the two. Over the years, I have noticed that in some cases, there will always be competition between digital banks and traditional ones, but there is also some cooperation between the two. Banks that have been around for a long time can give fintechs information.
I had a conversation with Scott Case, Truist's chief information officer, and L. Wilson, the bank's chief digital and client experience officer. Truist is one of the nation's largest financial institutions with $509 billion in assets. It was formed as a result of a merger. After the merger, the COVID-19 pandemic hit, leading to a digital acceleration in many industries.
Wilson told me that there was a plan for all the new solutions, with an extended roadmap of a couple of years.
Truist opened a 100,000- square-foot innovation and tech center to stay on top of all things digital. According to Case, the bank is getting serious about cloud architecture, data and analytics. He describes it as very important to the institution.
Wilson said that they don't see them as competitors. We partner with them to bring solutions to our clients.
Truist also invests in them. Similar to how Citi and American Express formed their own venture arms, the institution backs companies such as Veem, a startup that has developed a global payments network for businesses.
Sometimes it makes sense to work with a startup instead of building out your own technology. Truist says that fintechs need bank partnerships to scale up.
The world we live in is an interdependent set of organisms. Some of them have taken a market share and others have their own space. There are people who need to partner. Clients want to travel quickly. We are behind the scenes engineering those partnerships to make that happen.
While Wilson believes that banks that have operated for decades like those that combined to form what is today, Truist has a 100 year start on fintechs, he also acknowledges that they have brought a healthy competition.
A couple of weeks ago, we talked about an investor survey that we published. Infrastructure came up as an area of interest for multiple investors. This past week provided more evidence that infrastructure is hot and continues to rake in the dollars.
I wrote about Tenderly, a startup that aims to make it easier for web3 developers to build products using the blockchain. After seeing a 500% increase in revenue, the company raised $40 million in a Series B round of funding.
The image is tenderly.
The financing is an example of the rapid succession of funding rounds in the space. The $200 million extension to the Series C of Alchemy was reported by TechCrunch earlier this month. The company wants to be the starting place for developers looking to build a product on top of a blockchain.
I reported on another infrastructure company that raised five months after its previous round. I just realized that both companies raised $40 million. 70 banks, credit unions and fintech companies are powered by Atomic's payroll APIs. Atomic is an example of a startup that is working with both incumbents and fintechs to help connect consumers to their financial data for things like verification of income and employment,Automating setup and updating of direct deposits, repaying financial obligations from their paycheck, andOptimizing tax withholding.
We already know that infrastructure is hot.
I reported on the departure of Ofek Lavian, the head of payments at Instacart, and his move to become COO of a startup called Forage.
Lavian helped make it possible for Instacart to accept EBTs online. He was introduced to Forage, a company that wants to make it easier for merchants to do the same.
On his first day on the job, Lavian's passion came across during our conversation.
He told me that when he looked at all the places on the internet that people couldn't use the funds, he realized he was going to be his calling.
I loved this story because it was about boosting inclusion, which means a lot to me, and it was great to see someone leave a big company and find their calling.
I wish both of them the best.
Left to right: Ofek Lavian, Victor Fimbres and Justin Intal.
There were more funding deals announced this week than I could think of. There are just a few.
Payhawk added $100 million to its Series B round, which Romain covered back in November. The startup confirmed that it has reached a post-money valuation of $1 billion.
He covered the fact that Shares closed a $40 million Series A funding round. The company is working on a mobile app that will allow you to buy and sell shares in a social way. You can use the app to follow your friends and talk to them.
TabaPay revealed an undisclosed investment by the SoftBank Vision Fund 2. The startup says it is currently processing over 1 million transactions a day with a CAGR of 111% and 151% in dollar volume.
Counterpart brought in $30 million in Series B growth financing. According to Chubb, one in four small businesses have faced a management liability lawsuit in the last three years at an average cost of more than $100,000. Crime insurance is one of the things it offers.
Christine Hall wrote about how Kin Insurance raised $82 million of a Series D round that is expected to close at $100 million. QED was the leader in the round. The Chicago-based direct-to-consumer home insurance company had scrapped plans to go public. Kin Insurance closed the year with $105 million in premiums, up from $25 million in 2020.
Kin Insurance co-founders Lucas Ward and SeanHarper.
Kaleidoscope raised a $10M Series A round to connect sponsoring organizations, donors and applicants. Over the last two years, the startup says it has helped over $370 million in scholarships and grants.
Tomer Barel was named the Chief Operating Officer of Melio, a B2B payments platform for small businesses. A $250 million round valued the company at $4 billion in September. Melio closed $110 million in funding in January of 2021.
DoorDash said it is acquiring Bbot, a technology startup that simplifies digital orders and payments processes, for an undisclosed amount. According to Restaurant Dive, the acquisition will strengthen DoorDash's on-premise technology offerings and could grow its partner footprint since Bbot services restaurants, hotels, bars, breweries, food halls, ghost kitchens and bowling alleys.
Mercury, which describes itself as a bank for startups, restricted several accounts linked to African tech companies, Tage reported.
The number of companies involved is unknown. Several sources said that they ranged from a dozen to 30.
Mesh Payments is teaming up with Visa to launch a business card called Plug and Pay that will allow users to link their physical card to any of their virtual cards.
In December of last year, I reported on how Mesh Payments, which provides a platform for companies to oversee and manage employees expenses, and for employees themselves to better track and manage how and where they spend money, had raised $50 million in a Series B led by Tiger Global.
If you are wondering how this differs from Curve or Apple, Mesh said that there is still a number associated with the account on the physical card. Plug and Pay allows users to link their physical card to any of their virtual cards, according to the company. It told me that it was almost as if the physical was empty and that I should plug in the virtual card from the platform. Plug-in a new card from the platform and swap as many times as you want.
If the card is compromised in any way, a finance manager can link a new virtual card to the physical one. Finance managers have full control over the physical card, so they can change its PIN, swap it for a virtual one, and more. The company calls it a spend management platform in your pocket.
In another example of financial technology partnering with banks, Plaid announced an open finance relationship with Frost Bank, which will bring data to the institution's nearly 400,000 customers located throughout Texas. Plaid wants to help Frost customers integrate their accounts and finances online. This is an example of a bank doing something about technology that can make the lives of their customers easier.
That is it for this week. I hope you have a great weekend. Next time, see you.
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