#406
Digital Acceleration In Times Of Covid
When Atlantico first shared its Latin America Digital Transformation Report a year ago, it believed that the region was at a peak of digital growth catalyzed by the pandemic. A year (and another excellent report) later, that is clearly not the case. 2021 has brought second and third order effects of this phenomenon, and the tech ecosystem across the region continues to solidify at breakneck speed.
This week serves as a good reminder as to why. Kavak – the hottest unicorn on the block – drove away with $700m in funding, doubling its valuation to nearly $9b. The remarkable list of growth equity investors that piled onto the round serves as a confirmation that the “exit pipeline” previously proven in Brazil by players like Stone and PagSeguro is replicating in Mexico.
Furthermore, we’re seeing increasing levels of strategic acquisitions. Coupled with excess liquidity in the markets, it further reinforces the dynamism of the ecosystem. Nubank – the OG hottest unicorn – announced its third acquisition this month (of Mexican microfinance lender Akala). This is on the back of the purchase of e-commerce instant payment platform Spin-Pay and both a partnership with and investment in Creditas. Meanwhile, Chilean insurtech Betterfly bought six startups to accelerate its expansion in the region.
Latin America is not exactly known for being a region of stability. It is a region of contrasts and excitement (to put it mildly), which gave rise to the concept of magical realism. But for the millions of people chronically underserved by the traditional financial system, the change is starting to feel quite real. The genie is out of the bottle!
$ML is now NYSE listed - Dee Choubey shares his thoughts as MoneyLion begins a new chapter as a publicly listed company, writing “When we started MoneyLion in 2013, we wanted to do something big — bigger than just a finance or tech company. It's been about the mission, and only the mission since day 1. Many early employees, investors, advisors and partners saw that technology could be used for the good of those that are usually left behind. Our dream was to build a destination where all Americans can feel empowered to do more with their money. I’m proud to say we were able to build more than a destination." Huge congratulations to Dee and the entire MoneyLion team! Read more
Ocrolus lands $80m at a $500m+ valuation to automate document processing for fintech companies and banks - Congratulations to portfolio company Ocrolus on the announcement of their Series C funding round! Fin VC led the financing, which values New York based Ocrolus at “north of $500m” and brings its total funding raised since its 2014 inception to over $100m. Thomvest Ventures, Mubadala Ventures, Oak HC/FT, FinTech Collective, QED Investors, Bullpen Capital, ValueStream Ventures, Laconia, RiverPark Ventures, Stage II Capital and Cross River Bank also participated in the latest round. Read more
American Express and Extend partner to enable virtual cards for U.S. small and mid-sized businesses - Congratulations to portfolio company Extend on the announcement of their partnership with Amex, which will expand virtual Card solutions for U.S. businesses. U.S. companies with an eligible American Express Business Card can now enroll and create virtual Cards, also known as tokens, through Extend’s app or desktop login in as little as five minutes using their existing American Express Card account. Read more
Digital Acceleration In Times Of Covid
Brazilian investment bank BTG Pactual launches crypto platform - Mynt, which will be available in the last quarter of 2021, will initially allow exposure to bitcoin and ether. Read more
Mexico’s Kavak drives away with $700m in new funding, doubling its valuation to $8.7b - Kavak, a Mexico City-based startup that operates a pre-owned car marketplace in Latin America, announced that it has raised a massive $700m in a Series E round that more than doubles the company’s valuation to $8.7b. Read more
Betterfly acquires six companies in Chile and Brazil - Kunder and its four companies (Nesto, Racional, ProSueños, and HeyPay!) and Brazilian startup Xerpay will merge with Betterfly after the acquisition. Read more
Latin America’s second wave of digital transformation - Atlantico reveals the 2021 edition of its Digital Transformation Report. It dedicates 200 slides of data-rich analysis, primary research, private company data and case studies to tell the story of a “second wave” of change we are witnessing in the region. Read more
Industry News
PayPal launches its ‘super app’ combining payments, savings, bill pay, crypto, shopping and more - These changes shift PayPal from being largely a payments utility that’s tacked on to other offerings here and there, to being a more fully fleshed out finance app. Though PayPal itself doesn’t aim to be a “bank,” the new app offers a range of competitive features for those considering shifting their finances to neobanks, like Chime or Varo, as it will now also include support for paycheck Direct Deposits through PayPal’s bank partners with two-day early access, bill pay and more. Read more
Startup firms help home buyers win bidding wars with all-cash offers - In today’s frenetic housing market, buyers who take out mortgages are struggling to compete with those putting up all cash. Cash offers are more attractive because there is less chance the deal will fall through or be delayed due to financing issues. Now, a number of startups are offering programs to help level the playing field. Read more
China makes preparations for Evergrande’s demise - The officials characterized the actions being ordered as “getting ready for the possible storm,” saying that local-level government agencies and state-owned enterprises have been instructed to step in to handle the aftermath only at the last minute should Evergrande fail to manage its affairs in an orderly fashion. Read more
Why free trading will never be free - While shares of retail brokerages such as Robinhood have been under pressure, they have hardly collapsed. In part, that is because payment for order flow is just one of a number of ways that brokers have historically—or could in the future—made money from trading flow. Read more
Toast sells shares in IPO at $40, topping range and valuing restaurant-tech company at $20b - Toast’s IPO comes after a roller-coaster stretch in the pandemic during which revenue initially sank by 80% as restaurants closed and cities across the country shut down. But like other hospitality industry-focused tech companies, the rebound was much swifter than expected - restaurants stayed open and shifted their business to takeout, delivery and mobile ordering, playing right into Toast’s sweet spot. Read more
JPMorgan Chase is buying college financial aid platform Frank to deepen ties with students - Frank is an online portal with tools that help students apply for and negotiate financial aid, enroll in online courses and find scholarships. It has served more than 5m students at 6,000 institutions since it was launched by Charlie Javice in 2017. Read more
Ant to turn over consumer credit info to Chinese government - Huabei will only allow users who authorize sharing their credit info with PBOC to use its service. The central bank’s database will retain account setup dates, credit line amounts, repayment status and other information as part of monthly reports from Huabei to PBOC, but the company won’t offer up specific transaction information. Read more
Robinhood quietly tests crypto wallet as users clamor for it - While it’s already possible for Robinhood customers to buy and sell popular cryptocurrencies such as Bitcoin, Ethereum and Dogecoin, this would be the first time they can manage all of their crypto holdings through a wallet in the app. Read more
Fintech lender Affirm leans on investors to fund rapid growth - During Q2 Affirm funded about a third of its $4.7b buy-now-pay-later loan portfolio with cash from securitization deals. The company previously relied on warehouse funding from lenders, in which the company borrows against its consumer loan balances and direct loan sales to other companies. Securitization deals require less equity capital than warehouse financing. Read more
Workplace automation bots gain clout amid Covid-19 pandemic - The technology known as robotic process automation, or software bots became a critical tool during Covid-19 lockdowns and office closures as companies worked to keep their businesses up and running. Many turned to bots to handle tasks like processing payroll data or expense reports and fielding call-center queries. Read more
What we can learn from Afghanistan’s nascent crypto economy - In the past, when countries have, like Afghanistan, tumbled into chaos and conflict, wealthier people have either relied on paper money (such as dollar bills) or precious metals (such as gold) to store their wealth. Sometimes they turned to chains of Islamic brokers (this is known as hawala) to send money across borders. Now crypto is creeping in, and while this may still be at a nascent stage, the development should make us ponder the slippery topic of trust and “credit” in finance. Read more
Coinbase abandons lending product after SEC pushback - The largest US cryptocurrency exchange said in a statement that it had made a “difficult decision” to shelve its plans to offer the Lend product “as we continue our work to seek regulatory clarity for the crypto industry as a whole”. Read more
Twitter rolls out bitcoin tipping, safety features in product push - Twitter will now allow people to tip their favorite content creators with bitcoin and will also launch a fund to pay some users who host audio chat rooms on its Spaces feature, the company said in a statement this week. Read more
The Biden administration could sidestep McConnell's refusal to pay America's bills by minting a $1t platinum coin - A loophole in the law that prescribes the types of coins that can legally be minted in the US theoretically allows the Treasury Department to mint a $1t platinum coin, deposit it at the Federal Reserve, and then continue paying its bills as normal. Read more
China bans crypto transactions, vows to stop illegal mining - Crypto-related transactions will be considered illicit financial activity, including services provided by off-shore exchanges, the People’s Bank of China said on its website. It added that cryptocurrencies, including Bitcoin and Tether, are not fiat currency and cannot be circulated. Read more
JPMorgan Chase moving retail bank's core system to cloud - JPMorgan Chase is deploying a new, cloud-based core system for its retail bank using software developed by Thought Machine, the two companies said this week. One of the main reasons for the move is to be able to innovate quickly to meet customers' ever-changing needs. Read more
Inside Klarna CEO Sebastian Siemiatkowski’s striking home - Sebastian Siemiatkowski, CEO of the buy-now-pay-later company Klarna has built quite the pad...The WSJ takes a tour here. Read more
Select Financings
Airwallex - Australia based businesses banking provider raised $100 million in Series E funding led by Lone Pine Capital. Read more
Atome - Singapore based BNPL startup raised $400m in Series D funding led by SoftBank. Read more
Awning - San Francisco based real estate investing brokerage raised $9.3m in Seed funding led by Global Founders Capital. Read more
Blockdaemon - Los Angeles based provider of blockchain staking infrastructure raised $155m in Series B funding led by SoftBank Vision Fund 2. Read more
Blueground - New York based provider of short-term furnished apartment rentals raised $140m in new funding led by WestCap Group. Read more
Cobo - Singapore based DeFi-as-a-service startup raised $40m in Series B funding led by DST Global, A&T Capital and IMO Ventures. Read more
Dapper Labs - Canada based company behind NBA Top Shot and the Flow blockchain raised $250m in Series D funding led by Coatue. Read more
Decentralized Social (DeSo) - Japan based blockchain project with social tools such as profiles raised $200m in funding from investors including a16z, Coinbase Ventures, Sequoia, Winklevoss Capital, Polychain Capital and Pantera Capital. Read more
FloBiz - India based neobank for SMEs raised $31m in Series B funding led by Sequoia Capital India and Think Investments. Read more
Genesis Digital Assets - London based bitcoin mining company raised $431m in growth funding led by Paradigm. Read more
Metrika - Cambridge based operational intelligence startup for blockchain raised $14m in Series A funding led by Neotribe Ventures. Read more
One River Digital Asset Management - Greenwich based crypto-fund management startup raised $41m in Series A funding from investors including Coinbase Ventures, Goldman Sachs, Liberty Mutual Insurance and Infinity Investment Partners. Read more
Sorare - France based fantasy soccer platform whose "cards" are NFTs registered on the Ethereum blockchain raised $680m in Series B funding led by SoftBank Vision Fund 2. Read more
Spenmo - Singapore based cloud payments software startup raised $34m in Series A funding led by Insight Partners. Read more
Sunday - Atlanta based restaurant payment app raised $100m in Series A funding led by Coatue. Read more
Tag - Pakistan based employee banking services startup raised $12m in Seed funding from Liberty City Ventures, Canaan Partners, Addition, Mantis and Banana Capital. Read more
TrueLayer - London based API platform for open banking raised $130m in new funding led by Tiger Global. Read more
Vyne - London based payments platform raised $15.5m in Seed funding from investors including Hearst Ventures, Entrée Capital, Triplepoint, Seedcamp, Venrex, Founder Collective, and Partech. Read more
ZestMoney - India based BNPL startup raised $50m in Series C funding led by Zip. Read more
FinTech Collective Newsletter
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