Welcome to The Interchange! If you obtained this in your inbox, thanks for signing up and your vote of confidence. If you’re studying this as a submit on our website, enroll right here so you possibly can obtain it straight sooner or later. Every week, I’ll check out the most well liked fintech information of the earlier week. This will embody every part from funding rounds to traits to an evaluation of a selected area to sizzling takes on a selected firm or phenomenon. There’s numerous fintech information on the market and it’s my job to remain on high of it — and make sense of it — so you possibly can keep within the know. — Mary Ann
Last week, I wrote 4 corporations that had an insurance know-how angle. One factor all of them had in widespread? They every had a really specialised focus.
This is notable for those who take into account the truth that many common insurance know-how corporations have struggled over the previous yr. As my colleague Alex Wilhelm factors out in Friday’s Equity podcast: Root has zeroed out worth, and Metromile subsumed into Lemonade, which has misplaced most of its worth. This led him, Natasha Mascarenhas and me to ask: Since broad-primarily based shopper neo-insurance suppliers have didn’t generate worth, will the niche gamers do higher?
While we don’t know the reply to that query, we do know that traders appear to be digging the niche insurtech gamers.
On September 19, I reported how Boundless Rider and CoverTree every raised tens of millions of {dollars} to supply insurance for very specialised merchandise. Boundless Rider was based particularly to serve riders of bikes, e-bikes and energy sport automobiles. In specific, the corporate sees big potential within the e-bike market, which is anticipated to surge within the coming years. CoverTree’s solely focus is on residents of prefab or manufactured houses.
“If it’s built in a factory — and this includes modular homes, tiny homes and ADUs — we help insure it,” former LinkedIn product supervisor Adarsh Rachmale advised me in an interview. “And because we’re so focused, we do it so much better.”
Then, midweek, I coated Pie Insurance’s huge $315 million Series D increase. As I tweeted in 2021, the dimensions of this spherical wouldn’t have turned heads. But in at the moment’s atmosphere, the place traders are pulling again and enterprise funding has slowed significantly, a $315 million increase stands out. That firm, too, has a really specialised focus: offering employees’ compensation insurance to small companies. The Washington, D.C., firm advised me that within the first 4 months of 2022, it elevated its annualized run fee premium (ARR) to almost $300 million. It additionally greater than doubled its gross written premium within the first quarter of 2022 in comparison with the identical interval in 2021.
And final however definitely not least, I wrote about how engineer Mark Shaw — who co-based exercise and health monitoring app Strava and insurance software program firm Guidewire — raised $15 million for his newest enterprise: Inclined. Shaw’s third startup lends in opposition to complete life insurance insurance policies, with the objective of digitizing “many of the traditional time-intensive operations” concerned within the course of.
“There’s a trillion dollars of cash value in whole life in the U.S alone,” co-founder Josh Wyss advised . “We want to lean into this huge opportunity.”
The present complete life lending market at the moment in opposition to that $1.1 trillion is $150 billion, and that’s Inclined’s preliminary focus. Wow. Who knew??
Weekly News
Seen on
Connie Loizos reported that “Klarna, the 17-year-old Stockholm, Sweden–based buy now, pay later outfit” advised workers on Monday in a video message from COO Camilla Giesecke that it’s lowering workers once more to “reflect” its new and “more focused nature.” Around 500 Klarna workers have been “invited to watch Giesecke deliver the news, including in IT and recruiting, though Klarna tells us in a separate statement that the job cuts will impact fewer than 100 employees globally.”
From Carly Page: “Fintech startup Revolut has confirmed it was hit by a highly targeted cyberattack that allowed hackers to access the personal details of tens of thousands of customers. Revolut spokesperson Michael Bodansky told that an “unauthorized third party obtained access to the details of a small percentage (0.16%) of our customers for a short period of time.” Revolut found the malicious entry late on September 11 and remoted the assault by the next morning.”
Manish Singh writes: “In just six years, UPI has become the most popular way Indians transact online. The mobile electronics payments system was used for over 6.57 billion transactions in the world’s second largest internet market last month. Now, it’s taking steps to supercharge its growth…The central bank is working to expand UPI to ‘several nations in Asia and the Middle East and other parts of the world,’ and is setting up an international subsidiary.”
Seen on +
From Anna Heim: “In 2021, we wondered whether Brazil could be in for an IPO bonanza. It hasn’t happened: Not only is Latin America’s largest economy going through the same IPO drought as the rest of the world, but also one of its highest-profile public listings, Nubank, is coming to a sudden end.”
From Alex Wilhelm: “In late 2020 and 2021, companies offering consumers savings, investing and trading products were hot shit. Coinbase, Robinhood, M1 and others grew rapidly; hell, startups were born and scaled that offered other companies the ability to bake services like equity trading into their platforms! We all know what happened next: 2022 brought a change in market conditions and consumer interest — or, perhaps, ability — to save, invest and trade declined. This led to Coinbase, to pick a well-known entity in the consumer fintech market, rapidly flipping from impressive profits to stiff losses in the space of a few quarters. Robinhood saw its market value fall sharply, and M1 laid off staff.” For a fast checkup on shopper fintech exercise forward of Q3 information, head right here.
To get a extra in-depth have a look at the state of the Earned Wage Access area, the way it ought to be labeled and the place the cash goes, Karan Bhasin spoke to some energetic traders within the area. Read extra right here.
And elsewhere
From Engadget: “You no longer need to live in the US to use Affirm’s buy-now-pay-later services for much of your online shopping. Affirm is expanding to Canada through a partnership with Amazon. Spend $50 or more at Amazon.ca and you can choose Affirm’s pay-over-time option at checkout to split the bill into monthly payments. As in the States, there aren’t any late fees or surprise charges. The payment option will be available within a month. The Canadian rollout comes roughly two years after Affirm bought local equivalent PayBright — this is effectively a rebranding. Affirm serves Australia as well, but only for people buying Peloton exercise equipment.”
From Robinhood’s weblog: “Today we’re introducing a new Robinhood Gold benefit that enables members to earn 3% interest on their brokerage cash — up from 1.5% for non-Gold members. With the new interest rate, Gold customers can now earn even more income on their uninvested cash while they plan their next move and collect 23x more in interest when compared to the national average savings rate. The added benefit comes on the heels of the Fed rate hike earlier this week.”
HR startup Rippling introduced final week that it was branching out into fintech by entering into the more and more crowded spend administration area. In a weblog submit, product lead Rishab Hegde introduced the launch of the corporate’s new providing, which incorporates company playing cards, expense administration, and invoice pay. The firm is banking on the truth that since Rippling’s spend administration product is tied to an organization’s HR system and worker information, it provides the business a method to “view and manage” all of its month-to-month money burn “in one place.”
From PYMNTS: “Finance super app for businesses Flexbase is now offering B2B merchants a buy now, pay later (BNPL) solution called Flexbase Pay. With this product, merchants can get paid immediately while also giving their business customers the option to get 60 days of interest-free financing…In practice, merchants need only add a ‘Pay in 60 days with Flexbase’ button to their checkout to enable the Flexbase Pay option, and then Flexbase handles the underwriting process and offers the merchants’ customers financing within five minutes.”
The Information studies that whereas “Stripe founders John and Patrick Collison have indicated the payments software pioneer, valued in its last fundraising at $95 billion, is in no rush to go public…a new listing could solve one looming problem for the 13-year-old startup: Stock awards to some of its earliest employees face a deadline next year…If those original Stripe employees exercise the options before they expire, they’ll need to come up with cash to pay a steep tax bill based on the private value of Stripe’s shares. Stripe could arrange for another secondary offering to buy these loyal employees’ private stock, money the employees could then use towards their tax bills. Alternatively, an initial public offering or direct listing would allow staff — as well as Stripe’s investors — to cash out.”
Jeff Bezos–backed Chipper Cash, a cross-border funds app utilized by over 5 million folks all through Africa and its diaspora, introduced a partnership with card issuance platform Highnote. The corporations stated in a information launch that the brand new service will give U.S.-based Chipper Cash clients a method “to access their digital wallets to make transactions in the US and abroad that require a card payment, such as e-commerce purchases.”
Stash, which has constructed an investing and banking app with over 2 million clients and almost $3 billion in property beneath administration, says it has launched a brand new product known as Stash Core, which it describes as a “new, proprietary infrastructure platform that underpins the service for Americans who bank like investors.”
Image Credits: Richard Drury (opens in a brand new window) / Getty Images
Fundings and M&A
Africa
Ghanaian fintech SecondStax permits traders to entry capital markets exterior their nations, raises $1.6M
Asia
Singapore’s Arbor Ventures notches $193M towards subsequent early-stage fintech fund
Zopper raises $75 million to resolve India’s insurance drawback
Europe
Sequence orders up $19M led by a16z for a brand new method to B2B fintech
European digital financial institution Monese nabs $35M from HSBC
Latin America
HSBC, Goldman, Santander ink $810 million in financing for Kavak
United States
Noble emerges from stealth to assist corporations lengthen traces of credit score to their clients
Fintech app Portabl raises $2.5M to assist shoppers securely retailer monetary information
Healthcare financier Scratchpay secures $35M Series C
Remofirst raises $14.1M to make it cheaper and simpler for companies to rent distant employees globally
Sardine raises $51.5M led by a16z to smell out fishy fintech transactions
Proptech Rook raises $4.1M to develop its “Shared Value Investment” program
Property administration startup DoorLoop raises $20M
Image Credits: PonyWang / Getty Images
A Little About Me
Did that The Interchange was cited as “Recommended Reading” in a current Financial Times publication? I used to be psyched by the point out!
I used to be a visitor on the One Vision podcast! I chatted with Unconventional Ventures’ Bradley Leimer about how I view the present fintech panorama and the way I method “the craft and responsibility of reporting the changing face of technology.” To take heed to the episode, click on right here.
To study a bit of extra about me, take a look at this MuckRack Q&A, the place I speak about every part from what I search for when contemplating pitches to some random private info.
Also, some extent of clarification: While crypto arguably falls beneath the “fintech” umbrella, we’ve a group of writers (Anita Ramaswamy, Lucas Matney and Jacquelyn Melnik) who’re extra targeted on crypto, whereas I’m extra targeted on fintech apart from crypto. In different phrases, ship your crypto pitches their method, not mine! Oh, and TC has a crypto publication as effectively! Sign up right here to get Chain Reaction in your inboxes.
And that’s all for this week. Thank you to your assist in studying, and sharing, this text. I do know there are various fintech newsletters on the market, so I’m honored that you simply’ve chosen to learn mine. Until subsequent time…xoxoxo Mary Ann
