Welcome to my weekly fintech-focused column. I’ll be publishing this post every Sunday, so between posts, be sure to listen Equity podcast and listen Alex Wilhelm, Natasha Mascarenhas and i riff about everything boots! And if you want this message delivered directly to your inbox once it officially turns into a newsletter on May 1, subscribe this.
On March 25, PitchBook released Fintech Annual Report 2021, showing that the fintech industry raised $121.6 billion last year — a 153% increase year-over-year in global VC deal value. Alex and I will dive into that report next week, but it’s a good introduction to what I’m examining today.
There has been much talk about the slowdown in venture capital funding. But if the past week’s big turnarounds in the fintech sector are any indication, the sector is proving to have rather exceptional potential – at least for the time being.
In an unsurprising but still notable, spending and spending management startup Ramp confirmed that it has raised $200 million in equity, secured $550 million in debt, and double pricing to $8.1 billion. Not bad for a company that just went public just over two years ago.
I also exclusive Jeeves $180 million Series C coverage, quadruple that company’s valuation to $2.1 billion in half a year. I’ve been writing about Jeeves since it came out last June with $31 million in equity and it was wild watching it grow. It also operates in the corporate spending and spending management space, with more infrastructure components and a global footprint. In fact, it describes itself as the first “cross-country, multi-currency” cost management platform. Jeeves is present and looking to expand Latin America, Canada and Europe. It is also eyeing Southeast Asia and potentially Saudi Arabia and Africa.
Another thing Ramp and Jeeves have in common – aside from skyrocketing valuations – is that both companies are experiencing super-fast growth. Unfortunately, as with most private companies, no startup will share the hard revenue numbers. But at least they provide some stats. Ramp says its revenue has grown “10x early” in 2021 compared to 2020 while cardholders grow 7x and user base 15x. CEO Eric Glyman also told us that Ramp is provides more than 5 billion dollars in annual payment volume. Considering it monetizes per transaction, it’s safe to say that Ramp is doing well, growing into impressive revenue territory. Meanwhile, Jeeves says it’s seen its revenue grow 900% since rising in September, and even more impressively, in the first two months of 2022 it delivered more revenue than all of 2021. Meanwhile, the startup has doubled its customer base to more than 3,000 companies and reached about $1.3 billion in gross annual trading volume (GTV).
Is this market big enough for so many global players? That remains to be seen. But it will be fun to see how the space race plays out. As Alex, my friend and Equity podcast co-host, pointed out this week – it doesn’t seem like these companies can stop adding new features and products fast enough. For example, Brex announced last week that it is offering $10 million in growth capital through venture debt to Zesty.ai, a leading provider of predictive data analytics in the climate risk space. Brex launched a venture-debt program last August as part of its push to target more finance-related startups as well as mature companies. (It also applied for a banking charter last year but ultimately withdrew.) Meanwhile, newer players are also joining the scene. I recently wrote about a new company called Clean AI, started by former OnDeck and Better.com CFO Howard Katzenberg, aims to help businesses save money by using machine learning to analyze things like transaction terms, item data goods, redundant services, and bargaining opportunities. Startups like this are putting incumbents (relatively speaking) on tiptoe.
It’s safe to say that as long as these startups continue to add to what they can offer other companies, the rapid pace of funding to support such initiatives is likely to continue. continue – but there is a warning – IF they are showing rapid growth as described above.
It is too early to say really if fintech is really an outsider when it comes to the drop in global venture capital, or if we only see deals done late last year starting to close. end. The second quarter will give us more insight into whether fintech is in fact experiencing, or avoiding, the slowdown.
On that note, our awesome fintech/crypto reporter Anita Ramaswamy spoke to Lightspeed Venture Partners’ Justin Overdorff on the subject and at least in his view, fintech is Not immune to global decline. For context, Overdorff joins Lightspeed in 2021 to help lead the team’s fintech operations. He told Anita:
Image credits: Website Justin Overdorff / Lightspeed Venture Partners claims to be a “fintech junkie”
We are seeing pretty big market changes. Maybe valuations haven’t dropped yet, but what’s changing is that we’re definitely seeing the circle size shrinking. And the number of tenors being offered is decreasing. So when you see, you know, a deal and a [founder] who would normally come out with a $20 million Series A, they’re being told by the market to go from 12 to 15 million, because that’s where the fancy is. And instead of eight term sheets, you’ll get two. And that’s happening pretty clearly….Now, with that said, I think there are still a lot of cravings [for fintech] all aspects.
In terms of the venture, Overdorff told Anita that from what he was hearingVCs are “trying to make their money last longer” and as a result “don’t know where it is going”.
So if Overdorff’s observations are any indication, both startup founders and investors are working harder to make money that lasts longer.
Robinhood expands into consumer finance while Apple ramps up its fintech game
In other notable news, Robinhood this week announced that it is new debit card launch Allows investment to change fallback. As my highly talented colleague Sarah Perez and I have discussed, the move is significant in that it shows Robinhood is taking concrete steps to expand beyond the business and into more areas. more consumer finance. Sarah’s exact words are: “It puts it in more direct competition with other fintechs like Chime and even P2P payments companies like CashApp and PayPal/Venmo, tying customer accounts online with physical payment card. Rounding can also passively increase client investment – like Acorns [with its savings app] and just like Venmo is doing with crypto. ”
Another example of fintechs trying to do everything.
Meanwhile, as our friends at Protocol report, Apple is reportedly buying UK open banking startup Credit Kudos for about 150 million dollars. This after the introduction in early February about new Tap to Pay feature for iPhone turns the device into a contactless payment terminal. The tech giant is clearly encroaching on fintech territory.
Expense
As usual, there is no shortage of grants around the world, although I must admit, the list seems shorter than it was in previous weeks. Here are a few samples:
In other news
Master Card announced the launch of a new set of open banking-driven smart payments decision tools that aim to eliminate inconsistencies and improve success rates in the payments ecosystem. The credit card giant called the move “one of the first significant technological developments following the Finicity acquisition.”
This article by our own Alex Wilhelm links to the “fintech is an outsider” story from above: Forge’s public launch will set new test for SPAC-led exits. Essentially, Forge operates a private equity market – equity in unicorn startups. It went public through a SPAC this week and, gasp, actually made an impressive debut.
Ola said on March 24 that it had reached an agreement to acquire Avail Finance, a financial services startup serving a blue-collar workforce, as the ride-hailing giant wants to expand its offerings. its financial services. Manish Singh give us all the details in this piece.
Sightline, just a few months ago became Nevada’s First Unicorn, announced last week that JP Morgan Payments will become the primary processor for its Play+ transactions including online casinos, mobile sports betting, cashless payments at casinos “and more”. “The gaming industry has a payments ecosystem that is notoriously bogged down by regulations and casinos’ reliance on cash,” the company told me. But there have been huge technological advancements lately, like Sightline helping to launch the world’s first casino with completely cashless infrastructure. ”
Stori report that it expects to achieve 1 million active customers this month. CEO and co-founder Bin Chen said: “We are very excited about achieving this important milestone, especially since most of our customers have been rejected by traditional banks in the past. deny. With the Stori card, they are building credit history and enhancing financial viability. “I wrote about startups $32.5 million Series RED in February 2021.
BMO Financial Group and 1871 last week launched a nationwide call for applications for their leading fintech industry program for women-led startups, WMNfintech. Applications for the 2022 program will be accepted through April 22, 2022.
In this Q&A with FinLedger, Morty co-founder Nora Apsel discussion Journey of the online mortgage market, future goals and master plans. I spoke with Nora herself earlier this year and the former engineer was impressed. Her company raised $25 million Series B in July 2021 at a $150 million valuation. In February, she told me that the startup’s revenue had grown almost 14 times since 2019 and doubled just last year.
Image credits: Nora Apsel / Morty
Expense
Speaking of women in fintech, Mila Ferrell, a founding member of Zoom’s product team, last week joined Cervin, became the first female partner at an early stage venture capital firm. According to the company, in his new role, Ferrell will “define the future of work and shape the fintech infrastructure of the next decade and beyond”.
Image credits: Mila Ferrell / Cervin
Tishman Speyer, one of the world’s largest real estate developers, announced it has secured a commitment of $100 million, led by the National Pension Service of Korea and the Ontario Investment Management Corporation, for its first proptech venture fund. The joint venture says it is looking to raise up to $150 million in total equity to fund investments “in technology-driven opportunities across all sectors of real estate.” “.
Well, that’s it for this week! My newsletter was scheduled to launch today, but for logistical reasons, that date has officially been pushed back to May 1. Thank you for being there and reading this column in the meantime. Have a great Sunday and a great week ahead!
