Hi all, Julie here.
Bracing for some cold weather hitting Austin over the next couple of days. And by cold, I mean 20s and 30s, which I’m more than ok with for a few days.
On Monday, we published our 77th episode of the podcast! Thanks to Nova Credit Co-Founder Misha Esipov to talk about the rollercoaster ride the company had in 2020 and 2021, and what to expect from the team in the coming months (some exciting announcements ahead). Also, if you listen to our podcast and are a fan, please go give us a rating! Would mean a lot to all of us at FTT and the work that we put into scheduling, recording and producing these episodes each week.
Lastly, we're hosting our first Twitter Spaces tomorrow at 8ET! Thanks to Charley Ma from Alloy and Charles Birnbaum from BVP for joining me in the inaugura event to talk about DeFi and TradFi. Set your reminders! I'm staying up past my bedtime to host this so I promise it's worth it ;)
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Company News
Acorns Not SPACing
Pioneer Merger Corp and Acorns have decided not to SPAC. The pair mutually terminated their $2.2B merger agreement. Not super surprising given how poorly the SPAC market has done the past 6 months or so (for both fintech and non fintech companies). Announced in May last year, the deal was supposed to close before the end of 2021. Unfortunately for Acorns, it will have to pay Pioneer $17.5M in termination fees.
Payments Updates
Big news for ecommerce giant Shopify. The Canadian fintech is partnering with Chinese e-commerce giant JD.com to help US merchants sell their goods in China. JD (which has more than 550M annual active customers) said it will open an “accelerated channel” for brands on Shopify to begin selling via its cross-border e-commerce site in China within weeks rather than the typical 12 months.
Earnings Musings
Goldman Sachs bankers wanna get PAID. In its earnings announcement this week, Goldman said that it shelled out an additional $4.4B in compensation in 2021, sending the bank to its only quarterly profit decline of the year. It’s not just Goldman either. JPMorgan said it had spent an additional $3.6B on compensation in 2021, and Citigroup spent an additional $2.9B. Goldman raised compensation by 8% in 2020, even though revenue jumped 22%. In 2021, Goldman boosted its pay by 33%. Revenue also jumped 33%.
Also on the earnings front, Charles Schwab gave us a look into what trading revenues were like last quarter. Unfortunately for brokerages, it missed estimates. Adjusted earnings came in at 86 cents a share on revenue of $4.71B. Analysts had been expecting adjusted earnings of 88 cents a share on revenue of $4.79B.
SoFi Is A Bank
Speaking of banks, SoFi announced that the OCC and the Federal Reserve have approved its applications to become a Bank Holding Company through its proposed acquisition of Golden Pacific Bancorp. It will operate its bank subsidiary as SoFi Bank, National Association. The timeline should be swift now that it has approval, with SoFi saying it expects the acquisition to close in February. Analysts at Mizuho wrote:
“While having a bank charter license helps improve credibility and trust, it first and foremost should help lower SoFi's cost of capital. We estimate the benefit could potentially be $200-300M of incremental adj. EBITDA, mainly due to lower funding costs. While handling crypto as a bank holding company will likely require some disclosure changes, we believe these issues are fully solvable and should not adversely impact SoFi's future product capabilities.”
Funding and Deals
Pinwheel Scores New Funding
I was able to interview one of the co-founders, Kurt Lin, yesterday for the podcast so don’t miss that episode when it’s out in a couple of weeks :) The team raised a $20M Series A just a few months ago and is already announcing a new $50M round led by GGV. The payroll connectivity platform, which serves companies like Block, Varo and Lendly through its APIs, is best known for its flagship products like direct-deposit switching, income and employment data, and paycheck-linked lending. It claims that the data it aggregates spans nearly 80% of people employed in the US. Its customers are then able to use this data to be able to offer things like earned wage access. Its platform executes more than 4.6M processes per month, a 400x increase from last year.
Crypto Watch
OpenSea Makes An Acquisition
OpenSea, which recently closed a new funding round valuing it at $13B, has just confirmed that it acquired Dharma Labs. The Dharma app, which specialized in allowing its users to convert fiat into thousands of various crypto tokens will be sunset. However, this move can be seen as a play in helping to onramp new consumers to the NFT and digital asset space. Having used OpenSea to purchase a NFT myself, I understand the pain points that crypto newbies face when trying to use the platform. Using new and accessible purchasing options, especially fiat, will be a large way in which OpenSea opens itself up to millions more prospective users.
Coinbase and Mastercard Want to Make it Easier to Buy NFTs
Coinbase and Mastercard are partnering up to make it easier to buy NFTs. As of now, you have to use crypto to buy an NFT. Coinbase and Mastercard are working on letting users buy NFTs via Mastercard cards on Coinbase's upcoming NFT platform. I interviewed Coinbase’s VP of Product Sanchan S. Saxena, late last year after the exchange announced its NFT marketplace. Waitlists are kinda baloney if you ask me, but the team does say it has more than 1M people signed up for the Coinbase NFT marketplace. Anyways, you can listen to the episode here :)
Walmart Goes Metaverse
Tbh, shopping at Walmart has always felt like some alternate universe. The company appears to be the latest one venturing into the metaverse, along with plans to create its own cryptocurrency and collection of NFTs. The company filed several new trademarks on December 30th that indicate its intent to make and sell virtual goods, including electronics, home decorations, toys, sporting goods and personal care products. In a separate filing, Walmart said it would offer users a virtual currency, as well as NFTs.
Cash App x Lightning Network
Jack Dorsey’s Cash App announced it’s integrated with the Lightning Network, which will allow US users to send Bitcoin for free to anyone worldwide. Once live, Cash App users will be able to send Bitcoin internationally to any external compatible wallet. The Lightning Network’s integration into Cash App could also help the creator economy, with fans being able to easily send Bitcoin to show their support for an individual creator or cause if they accepted Lightning payments. Typical Bitcoin network transactions can take some time to process and see higher fees, compared with Lightning Network. Its transactions also take place independently of the blockchain (off-chain), which helps to reduce the fees, time and energy usage that would otherwise be involved. The transactions taking place on the network are later consolidated and recorded to the main Bitcoin blockchain.
Together With Fintech Meetup
Fintech Meetup: Only 45 Days Left To Get Tickets!
Don’t miss out on the world’s largest fintech meetings event–it’s the easiest way to fill your pipeline, meet new partners and get business done! We’re facilitating 30,000+ double opt-in virtual meetings so you can meet everyone you need to meet.
750+ organizations have already signed up, including:
- Fintechs, including Alloy, Argyle, Array, Boomtown, Bread Finance, Checkout.com, Dwolla, Equifax, Emburse, NIUM, Ripple, Sila, Socure and Upstart (and many, many more!)
- Payments, Networks and Tech Cos, including American Express, Discover, Finastra, FIS, Fiserv, Mastercard, SWIFT, The Clearing House, Visa and Western Union
- Neobanks, including Dave, First Boulevard, Cash App (Square), Revolut, Varo Bank and WebBank
- VCs, including Bain Capital Ventures, Commerce Ventures, General Atlantic, Mosaik Partners, Next Level Ventures, Point 72 Ventures, Tribeca Venture Partners and Vestigo Ventures
- Major banks, including Bank of America, Citi, CIT Bank, Cross River, Goldman Sachs, HSBC, J.P. Morgan, Santander and Wells Fargo
- 100+ Regional & Community Banks
- 150+ Credit Unions, representing 17m members and $260b in assets
Virtual, March 22-24. Startup rate available for qualifying cos, free tickets available for qualifying banks & credit unions. Get Your Ticket Now!
Career Corner
Product Pricing Strategist at Stripe
Stripe is looking for someone exceptional to help develop better Pricing and Packaging strategies across its existing and upcoming products. You will be at the intersection of the Product development, Go-to-Market and financial planning efforts. Your work will be highly visible to Stripe leadership and be instrumental to driving its future growth. If you want to be a part of the team working to increase the GDP of the internet, apply above!
Julie VerHage-Greenberg is the co-founder of Fintech Today, where she focuses on editorial content and brand. Prior to joining, she was Bloomberg’s first fintech reporter, covering Robinhood from before it was a billion dollar company, breaking the news that Plaid was acquiring Quovo, and interviewing executives on Bloomberg TV and at several large conferences.
