Even decacorns have their challenges • TechCrunch
Welcome to Exchange! If you received this message in your inbox, thank you for registering and voting of confidence. If you are reading this is a post on our website, please subscribe here so you can receive it directly in the future. Each week, I will review the hottest fintech news of the last week. This will include everything from funding rounds to trends, analyzing a particular space to highlighting activities about a particular company or phenomenon. There’s a lot of fintech news out there, and it’s my job to stay informed – and understand it – so you can stay informed. – Mary Ann
Hello. By the time you’re reading this, we’ll be just two days away from TechCrunch Disrupt! Interesting!
But first, let’s talk about fintech.
Last week’s big news was that spending management startup Brex announced that it has… lay off 11% of employees, or 136 people. It was also revealed that the startup’s chief financial officer, Adam Swiecicki, would be departing to join Rippling as the company’s chief financial officer. Notably, unicorn workforce platform Rippling recently entered the enterprise management space, becoming a direct competitor to Brex.
First of all, it’s rare – and new – for a company to actually actively share news of layoffs, so it’s interesting that Brex stays ahead of any rumours and lets me know in advance about the company’s plans. . And as Alex Wilhelm pointed out on Friday’s Equity podcast, the layoffs appear to be primarily related to Brex’s move earlier this year to no longer work with SMBs and unfunded startups. professionally. In other words, the company says it’s primarily weeding out people focused on serving that group. However, it must be difficult for those employees – especially considering the groups it no longer operates in were Brex’s original bread and butter.
More generally, the news of Brex’s layoffs shows that not even the decacorns are immune from this downturn. Earlier this year, the company confirmed a $300 million Series D expansion at a staggering $12.3 billion valuation. And while the company claims to “have a strong financial position with many years of performance,” it added that the shift away from SMBs to focus more on corporate customers – and by default, any layoffs involved – would leave the company “a path to sustainable profitability over the next few years.”
Side note: Brex aside, it still makes my journalists think that companies in general can raise hundreds of millions of dollars in funding and not be profitable. I doubt if I can become a venture-backed startup founder. The pressure to return profits to the investors who poured money into my company and the pressure not to have to lay off employees can keep me awake at night! Guess that’s why I’m a journalist and not a startup founder!
Anyway… talking about Disrupt and Brex, I’ll be interviewing co-founder and co-CEO Henrique Dubugras and Anu Hariharan, managing director of YC’s growth fund, YC Continuity, live in Fireside Chat on October 19th. ! I will also be speaking with Ramp CEO and Co-Founder Eric Glyman, Airbase CEO and Founder Thejo Kote, and Anthemis partner Ruth Foxe Blader in a session called “How to Compete Without lose your mind and run when cash is expensive” that same day. And finally, I’ll chat with CEO Rippling and co-founder Parker Conrad about his company’s plans to “go global.” Come see us! (Get 15% off here).
Oh, and if you want to hear me talk about everything from “The Good and the Bad of Fintech, the Really Great Meaning of Journalism, and Why Startups Represent Hope”, check out this episode of the Fintech Leadership podcast that I recently recorded with VC Miguel Armaza.
Venture capitalists call for funding for real estate investment startups
Hi! Its Anita Ramaswamy reports from the fintech desk at TechCrunch with Mary Ann. We’ve been seeing a lot of interest – and funding news – in the real estate and proptech sectors lately. In particular, there have been a number of startups raising funds for real estate investment apps that aim to help expand property class access for retail investors by providing them with real estate investments. tools to overcome barriers such as the large upfront capital requirements often required to invest in assets.
Fintor is one such example. Start up recently closed a $6.2 million funding round at a valuation of $80 million for its platform that offers split shares in residential real estate to investors for as little as $5. We have also covered similar platforms like Landa, Nada and The houses have arrivedall raised new funds in 2022.
The increase in retail investor interest in access to real estate seems counterintuitive to why rising interest rates have made real estate appear less attractive than it was a few years ago. But these startups are likely to focus more on growing the world’s long-term demand for real estate as part of a diversified portfolio than getting caught up in concerns about volatility. short-term action.
Here’s what Fintor founder and CEO Farshad Yousefi had to say about the current market environment in an email to TechCrunch:
While recent media headlines have mainly focused on market volatility, there are still opportunities for investors involved in real estate investing with the right strategic approach. For example, Atlanta saw a staggering 12% year-over-year growth in rents, directly boosting investors’ cash flow. Additionally, when looking at the top MSAs, large institutional investors have seen renewed rent growth increase by nearly 50%. This strong tenant retention trend clearly demonstrates where rental demand is going.
For a deeper dive into real estate technology and how it’s changing the investment landscape, check out my article in this week’s TC+:
Striped announced last week that it added two new features into the product verifying its identity. Over email, Plaid’s head of identity and fraud (and former Cognito CEO) Alain Meier told me: “With our new autofill feature, users can be verified within 10 seconds round. On the back end, we’re building more insights into our fraud and risk models with behavioral analytics to stay ahead of the fraudsters. “
The behavior analysis is particularly interesting because assuming you know your SSN/phone number, your typing behavior will be very different than if you copied and pasted it from a document. Plaid acknowledges this type of technology is not new but claims it is often not combined with other fraud detection features that Plaid offers.
Going after Square? TechRadar report: “After acquiring Zettle in 2018, PayPal announced a new brand POS equipment designed to meet the needs of small and medium businesses. The new Zettle Terminal introduces free Wi-Fi or pre-loaded SIM card internet connectivity on 3G and 4G networks to enable business owners to operate on the go. This ‘fully mobile’ approach will appeal to multi-site providers, as it requires no additional setup or manual connection at every new location. “
As Christine Hall reports: “Greenlight Financial Technologya venture-backed fintech company focused on providing debit cards, banking apps, and financial education for kids, has added another layer to its subscription with Introducing family safety features. Greenlight Infinity, priced at $14.98 per month for the whole family, includes location sharing to see where anyone in the family is and make a subscription; SOS alerts to emergency and/or 911 contacts with a single tap; and accident detection with automatic 911 control, where if an accident is detected while driving, driver and trip information is provided to emergency services. “
TC + editor Alex Wilhelm Dig into some Q3 funding numbersand what he discovered when it comes to the fintech sector is not so good. “Looking at the Q3 2022 data from CB Insights, it is clear that the fintech funding boom is behind us; Even more, global fintech funding is now back to where it was before 2021, suggesting that last year was more deviant than the new normal for the startup category. “
Sarah Perez reports that Apple “Is taking a big step in providing more banking services to its customers. The company announced on October 13 that it is partnering with Goldman Sachs New Savings account feature coming soon for its Apple Card credit cardholders, which will allow them to save and growDaily Cash’ – cashback rewards earned on their Apple Card purchases. In the coming months, Apple says cardholders will be able to automatically save this cash into a new, high-yield Savings account from partner Goldman Sachs, which is accessible with Apple Wallet. Customers will also be able to transfer their own funds to this account. “
The Los Angeles Times reports that “credit cards and digital payment apps like PayPal offer a number of distinct advantages over cash, including the ability to recover money paid to scammers. But Zelle, a digital payment network owned by seven major banks, is not too protective of its users. If you use Zelle to pay someone who proves to be a scammer, you have only a slim chance of getting your money back from your bank. The same is true if you send money to the wrong person. If you hit Submit, the money will probably disappear – like if you lost a $20 bill on the street. “Meanwhile, yes talk on twitter that Zelle actually has significantly more transaction volume in 2021 than Venmo and CashApp. Huh! I’m still trying to find proof of that.
Finance and mergers and acquisitions
Seen on TechCrunch
Former VC brings smart financial advice to those who really need it, instead of just the rich: When announcing this $24.4 million funding round led by GGV Capital, Northstar CEO and co-founder, Will Peng, told me: “Time from first meeting to terms sheet about a month.”
With $67 million in new capital, NorthOne is doubling down on SMEs as some fintechs pull out
Oh, listen, TripActions has grown at a $9.2 billion valuation after a reported $12 billion IPO filing.
Getaway launches a way for you to enjoy and own vacation homes
Egyptian Consumer Money App Telda Raises $20 Million From GFC, Sequoia Capital and Block
Airwallex raises $100 million to power cross-border business banking, valuation remains at $5.5 billion
Charli D’Amelio, Fintech Step Endorsed $300 Million Loan to Bring Crypto to Teens
This company wants to improve your credit by assessing financial literacy
GoHenry, a banking service for under-18s, raises $55 million after surpassing 2 million users
And other places
VC firm QED acquires fintech executive search firm
Astra raises $10 million in Series A funding; 30 million dollar credit line
Corporate card startup Mercantile raises $22 million to target an unusual niche: professional associations
Financial Finesse launches venture arm supporting ‘fintech for the better’
Well, that’s it for this week! Once again, thank you for your continued support – and I really hope to see some of you IRL again at Disrupt! xoxo, Mary Ann