Hi all, Julie here.
So apparently today was fintech M&A announcement day and I missed the memo. At least Breslow went on his Twitter rant the day before all of these announcements so the internet had time to make all of the memes. Here are a couple of my favorites. Oh, and here's a link to the full Plaid Predictions event from Monday.
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TrueAccord’s Retain Product Sets New Milestones
I don’t even care that I have a bias when it comes to TrueAccord…This is what you call a successful product launch.
“TrueAccord Retain, which harnesses digital technology and machine learning to deliver a personalized, effective early-stage recovery strategy, significantly outperformed three traditional “call and collect” agencies across several of an anonymous client’s portfolios. Relative to the best-performing ‘call and collect’ vendor for each product portfolio, TrueAccord Retain drove a 24% improvement in roll rate, a 28% improvement in early-stage gross flow through rate and a 40% improvement in late-stage gross flow through rate*.”
Funding and Deals
Walmart’s Fintech Project Buys Not ONE, But Two Companies
The fintech startup backed by Walmart and Ribbit said it plans to purchase two small firms and launch under a new brand called ONE. It’s acquiring Even Responsible Finance, which is used by employers to offer workers their paychecks early, and ONE Finance, a challenger bank that allows users to manage money and apply for a debit card or other services that come with lower fees. The two companies had a combined valuation of around $400M during their last fundraising rounds. Recall that the project had already attracted executives from Goldman Sachs to lead it, such as Omer Ismail, the former head of Goldman’s Marcus. Great point made by my friend David Haber of a16z below:
UBS Buys Wealthfront
Quite a good outcome for Wealthfront here. The team had been on the market for a bit and RBC was close to buying it, but looks like UBS has won. The pair announced an agreement whereby UBS would acquire Wealthfront in an all-cash transaction valued at $1.4B. UBS has been trying to figure out ways to target a younger demographic, and my friends at the company say that it ended up just making more sense to buy a company that already had more than 470K customers than build something on its own and try to compete. Congrats to the Wealthfront team!
Possible BNPL M&A
Now this isn’t a confirmed deal yet, but two players in the BNPL space might become one. Sezzle is in talks to be acquired by larger Australian rival Zip. Shares of Sezzle soared 23% during the session. As I said, the talks are still early so this is no guarantee. Market seems to like it and think it’s likely though if the stock saw that big of a pop. Zip has been looking to M&A to help it compete with rivals like AfterPay (which recently got bought by Block) and Klarna.
JPMorgan said it has agreed to acquire a ~49% stake in Athens-based payments fintech Viva Wallet. Terms were not disclosed but the rumored valuation for Viva is north of $2B.
Viva Wallet operates in 23 countries across Europe and provides card acceptance services through its POS application, add-on Google play devices and advanced payment systems in online stores. The company got a banking license in 2020 by buying Greece's first digital challenger Praxia Bank.
LatAm Lender Gets New Funding
Brazilian lender Creditas, founded in 2012 as a collateralized lender operating via a marketplace model, announced it has raised $260M in funding that values the company at $4.8B (up from $1.75B in December 2020). Fidelity Management & Research led Creditas’s latest investment. In the third quarter of 2021, Creditas notched $46.8M in revenue, up 233% from $14M in the 2020 third quarter. At the same time, the company’s net loss widened to $14.8M compared to $8.25M. Founder and CEO Sergio Furio projects annualized revenue of about $200M for 2021. As of the 2021 third quarter, the company’s credit portfolio under management had reached $532M, up from $189.3M in the third quarter of 2020. In 2016, Creditas took the bank out of the equation and built its own platform so that instead of the banks, Creditas was the entity securing funds for loans.
Crypto Taxes About to be Messy
The next few months are going to be extremely interesting for the IRS, crypto exchanges and taxes. Coinbase is one of the first I’ve seen that’s going to try to make it easier for its customers to deal with the cluster f*ck. Coinbase, one of the largest and most popular cryptocurrency exchanges, is adding a new tax center to its app and website to help US customers work out how much they might owe to the IRS as a result of their crypto transactions. The new section will show “a personalized summary of [a customer’s] taxable activity on Coinbase, broken out over time by realized gains/losses and miscellaneous income.” This information can then be taken to an accountant or used with tax software like TurboTax. Whether customers actually pay the taxes they owe is another thing…but at least Coinbase is attempting to make it less of a hassle.
Zuckerberg’s Crypto Project Unravels
Well, we kinda saw this coming when a bunch of execs, including David Marcus, departed. I’m just gonna leave this tweet from Jack here to summarize.
YouTube is exploring adding NFTs for its video creators, according to CEO Susan Wojcicki. She didn’t give much in the way of details, but it comes as several of YouTube’s rivals have already jumped on the trend (Twitter, Instagram, Meta). Wojcicki said:
“We’re always focused on expanding the YouTube ecosystem to help creators capitalize on emerging technologies, including things like NFTs, while continuing to strengthen and enhance the experiences creators and fans have on YouTube.”
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