Happy Friday!!!
 
Wishing everyone a very Happy Mother’s Day Weekend!!!!  Here is the Uncle Sean Update for 5/7/21:
 

• Although not completely unexpected, it certainly grabbed a ton of press this week - Chime forced to remove the term “Bank” from their name; and to clarify / distance themselves from the term “banking” and its derivatives as part of a settlement agreement with California DFPI.  TechCrunch has a good write-up on the Chime settlement.  I suspect we will see more of this type of enforcement going forward – both at a State and Federal level.

 

• Michael Hsu gets the nod from Janet Yellen to be the next interim acting head of the OCC effective May 10.  Michael Hsu is currently associate director of bank supervision at the Federal Reserve.  Blake Paulson, the current interim Acting Comptroller since January, will return to his previous role as Senior Deputy Comptroller and Chief Operating Officer of the OCC.  According to this BankingDive article, Hsu will be the third consecutive acting comptroller to lead the OCC since Joseph Otting left last year on May 29, 2020.

 

• Congratulations to Maun Federal Credit Union for being the first federal charter granted by the NCUA in 2021.  The NCUA granted a federal charter and National Credit Union Share Insurance Fund coverage to Maun Federal Credit Union, in Kendall Park, New Jersey to serve a local Islamic community.  The charter became effective April 26, and maunfcu.org expects to open in June.

 

• Five Star Bancorp announced pricing of IPO at $20 per share, opened trading (Nasdaq: FSBC) at $24, and raised about $100M.  Proceeds are to be used for cash dividend of $27M and the rest to be used for regulatory capital and general corporate purposes.  A quick look at the FedFis Bank database platform (yep – that’s a plug) shows Five Star Bank with a CET1 ratio of 10.69% and Leverage ratio of 7.66% as of 3/31/21 (very well capitalized), it sure smells to me like someone may be on the acquisition trail soon….

 

• PPP is out of money approximately 3 weeks before its planned end on May 31 according to this CNBC article.  Keep in mind that the SBA still has about $8B available through PPP but is restricted to new applications form Community Financial Institutions that typically serve minority borrowers.  The SBA also has a few weapons left under the CARES Act such as the Restaurant Revitalization Fund ($28.6B in funding available) and the Shuttered Venue Operators Grant ($16B in funding).

 

• NYDIG and FIS have partnered up to enable banks to offer bitcoin to their customers through the FIS Digital One Mobile technology.  NYDIG will provide the custodial and trading platform, and in this CNBC interview states that bitcoin is coming to hundreds of US banks this year.  According to Yan Zhao (President of NYDIG), “this is not just the banks thinking that their clients want bitcoin, they’re saying `We need to do this, because we see the data,’” Zhao said. “They’re seeing deposits going to the Coinbases and Galaxies and Krakens of the world.”

 

• Mastercard adds 6 new startups to their fintech accelerator program, Mastercard Start Path.  Check them out - Asante Financial Services, Cledara, Jifiti, Moeda Seeds, Spendebt, and Tippy.

 

• Early Warning Services, the network operator behind Zelle, announced a record 1Q2021 transactions including 392 million transactions worth $106B that resulted in 74% YOY growth spurred by a 180% increase YOY in small business transactions – DANG!!!  That’s going to add up to some real money pretty soon – LOL!!!

 

• PayPal also announced record 1Q2021 results that included $285B in payment volume that resulted in 50% YOY growth.  Do you think PayPal is looking over their shoulder yet at Zelle’s trajectory?

 

• Galaxy Digital announced an agreement to acquire BitGo in a mixed stock and cash transaction totaling approximately $1.2B.  This is reportedly the first merger in the crypto world in excess of $1B.  And of course you know that I can’t move past this without sharing their nicely done Investor Deck (I love investor presentation decks waaaayy too much – man, I sure need a hobby!!!).

 

• Bill.com (NYSE: BILL) announce that they are acquiring Divvy in a stock and cash transaction valued at approximately $2.5B.  This is another merger that makes perfect logical sense to me.  Per the press release, the combination will expand the market opportunity for both companies.  “Bill.com can offer expense management and budgeting software combined with smart corporate cards to its more-than 115,000 customer base and its network of 2.5 million members.  Divvy will be able to offer automated payable, receivables, and workflow capabilities to the more-than 7,500 monthly active SMBs that it serves.”
  • Yep – you guessed it….  Here is the Investor Deck – LOL!!!!!

 

• Marqeta will reportedly publish their IPO plans next Friday (5/14).  Recall a few months back where we talked about Marqeta’s proposed IPO and how they were originally eyeing a valuation of around $10B; but now it seems like they may be pushing a valuation of up to $15B.  Makes sense considering they moved into the credit card space shortly after the confidential filing back in Feb.  We will certainly be watching this closely.

 

• Remitly (international transfers) has reportedly hired investment banks to prepare for an IPO later this year.

 

• Identity infrastructure startup Persona raises $50M in Series B funding.

 

• Check this out – Green Dot is relocating to Austin, TX from Pasadena, CA and plans to have the Austin headquarters up and running by the end of the year.  Cool!!!!

 
 
Random Uncle Sean Stuff:

• Random thought…..  Does fractional ownership via investing apps mean that stock splits are a thing of the past?

• Happy Mother’s Day to all the Mom’s!!!!!  This TJ Maxx Mother’s Day commercial music video “Put it in Your Cart” made me laugh way too hard (spin on the 80’s hit “Listen to Your Heart” by Roxette)!!!

 
 
Have a GREAT weekend, a SUPER Mother’s Day, and please stay safe!!!
 
Uncle Sean
 
 
Sometimes known as Sean Mayo – contact me directly for scope and pricing of custom reports / analysis projects at smayo@fedfis.com | 214-604-6961 – or you can contact FedFis Sales Team at 512-960-0911 | info@fedfis.com #FedFisHasTheData FedFis
 
FedFis, LLC disclaimer – The views and opinions of Uncle Sean are of his own and may not necessarily represent the views, endorsements, and/or opinions of FedFis, LLC – we all know he’s a little bit different; but that’s why we love him.
 

Happy Friday!!!!
 
WOW – I can’t believe it is the last day of April already.  This month went by like a flash!  Here is the Uncle Sean Update for 4/30/21:
 

• It’s Fed Week!!!!!  As expected, the Federal Reserve voted unanimously to keep rates near zero, continue the $120B per month bond buying program, and gave no indication that things will change anytime soon.  Fed Chairman Jerome Powell said the recovery is accelerating, but is “uneven and far from complete.”  While he noted that inflation pressures could rise in the coming months, these “one-time increases in prices are likely to only have transitory effects on inflation.”  I like this new completely transparent Fed.  If you want to completely geek out (like me) even more – here is the link to the Federal Reserve press release; and CNBC has a good summary as always.

 

• Nymbus makes headlines again this week with the announcement that Nymbus CUSO raises $20M investment by VyStar Credit Union marking the “industry’s largest-ever fintech funding round made on behalf of a credit union.”  “Based on the overwhelming response that Nymbus CUSO has already received in the market, we clearly address an overlooked opportunity for helping credit unions play to their strengths and make serious growth gains without breaking their technology budgets,” said Jeffery Kendall, Chairman and CEO of Nymbus.

 

• The Big Boys are making news this week:
  • Fiserv announced their new relationship with PayPal for POS touch-free payments.  “Small and mid-sized businesses using Clover® and large enterprises leveraging the Carat omnichannel commerce ecosystem from Fiserv will be able to accept payment via PayPal and Venmo through QR codes presented at the point of sale. Consumers will be able to initiate payment by scanning the QR code with their PayPal or Venmo app, and will receive a digital receipt.”
  • FIS announced the launch of RealNet, a real-time payments (RTP) platform.  Using a “smart-routing decision engine," FIS RealNet “identifies the fastest, most cost-efficient payments option for a given transaction in real time — whether ACH, same-day ACH, wires or RTP — and automates the end-to-end process.”

 

• SoFi announced an “industry first” option to redeem SoFi Credit Card reward points directly into cryptocurrency via SoFi Invest platform.

 

• Barclays US to offer BNPL solution by partnering with Amount.

 

• Stripe announced an agreement to acquire TaxJar (a provider of sales tax software for online businesses) in response to users requesting assistance in navigating sales tax issues.

 

• Gemini announced that they have selected Mastercard for their summer launch of their crypto rewards credit card (issued by WebBank).

 

• There was a lot of funding in the rapidly growing teen banking app space this week:
  • Current raised $220M in Series D funding round with a $2.2B valuation just 5 months from their previous round in November that valued the company at $750M – yes, that’s a 3x valuation increase in only 5 months!!!  To be fair, Current has grown to 3M users after hitting 1M just last summer.  While Current began as a teen banking app, they have evolved into serving more Gen Z and younger millennials (average customer age is 27).  CNBC Closing Bell has a good interview with Current CEO, Stuart Sopp.
  • Step, a teen credit builder app, raised $100M in Series C funding round after growing to 1.5M users just 6 months after official launch. 
  • Greenlight raised $260M in Series D funding round and increases the company's valuation from $1.2 billion to $2.3 billion in a six-month period.  Greenlight says it has "more than tripled" YOY revenue and serves more than 3M parents and kids.

 

• Brex raises $425M in Series D funding round led by Tiger Global.  The article states “In Q1 2021 alone, Brex grew total customers by 80% with total monthly customer additions increasing by 5x. SMBs now account for 45% of customers on the Brex platform.”  This latest round brings total funding to $1.2B at a $7.4B valuation.

 

• ZenGo (a non-custodial mobile app / wallet to manage your cryptocurrency holdings) raised $20M in Series A and is planning to launch a Visa credit card.

 

• Paxos raises $300M in Series D with a valuation of $2.4B.

 

• Rho Technologies (business banking fintech) raises $100M debt financing.

 
 
Random Uncle Sean Stuff:

• Is it odd that I have reading glasses AND a magnifying glass at my desk; and that I sometimes have to use both at the same time?
• Two favorite things I read this week (I couldn’t narrow it down to just one):
  • Years from now when young kids ask me how we survived the Great Toilet Paper Shortage of 2020, I’m gonna tell them that we had to drag our butts across the lawn…  barefoot…  in the snow…  uphill…  both ways…  LOL!!!!!
  • Spring-time allergies in the Texas Hill Country are so bad, local drug dealers are busy converting Meth back into Sudafed!!!

 
 
Have a GREAT weekend and please stay safe!!!
 
Uncle Sean
 
 
Sometimes known as Sean Mayo – contact me directly for scope and pricing of custom reports / analysis projects at smayo@fedfis.com | 214-604-6961 – or you can contact FedFis Sales Team at 512-960-0911 | info@fedfis.com #FedFisHasTheData FedFis
 
FedFis, LLC disclaimer – The views and opinions of Uncle Sean are of his own and may not necessarily represent the views, endorsements, and/or opinions of FedFis, LLC – we all know he’s a little bit different; but that’s why we love him.
​

Happy Friday – we made it!!!!
 
There is quite a bit to go over this week, so let’s get right to it - here is the Uncle Sean Update for 4/23/21:
 

• Nymbus receives a $15M investment from Financial Services Capital to continue broadening their offerings.  This is fresh off the launch of Nymbus Labs in March that enables banks and credit unions to leverage a Direct Bank offering (i.e. digital brand); and their last funding round of $53M Series C back in February.

 

• Nymbus gets another nod from Uncle Sean this week as Locality Bank (digital Florida de novo in organization) selects Nymbus to provide the new banks cloud-native technology platform, in conjunction with a full suite of banking-as-a-service solutions for handling the essential back-end, middle, and front-end elements the bank requires.  According to Keith Costello, CEO of Locality Bank: “Nymbus provides an ideal solution with the go-to-market timeline that has met our needs exactly.”

 

• Unifimoney is making headlines this week by announcing the launch of their Unifi Premier Credit Card backed by Railsbank with a very unique and intriguing rewards platform offering bitcoin, gold, or equities (very cool and beats the heck out of airline miles – yawn) beginning 3Q21.  If I am not mistaken, I believe this is Railsbank first entrance into the US market with their Credit Card as a Service (CCaaS) product. 

 

• Venmo is the latest to join the crypto craze allowing it’s 70M US customers to buy, hold, and sell bitcoin, ether, litecoin, and bitcoin cash.  Not unexpected as Venmo is a PayPal subsidiary and this is an expansion of their parent’s operations allowing users to buy sell and hold crypto as well as spend virtual coins through PayPal's Checkout with Crypto feature.  

 

• Apple announced Apple Card Family upgrade that allows people to share the Apple Card (issued by Goldman Sachs) and, more importantly, build credit together. Also enables parents to share Apple Card with their children (13 years of age +), while offering optional spending limits and controls to help teach smart and safe financial habits.  “Children” participants over the age of 18 can also opt in to credit reporting.

 

• Crypto exchange firm Binance.US hires former OCC chief Brian Brooks as US CEO. 

 

• Paxos is granted OCC approval to convert from a New York State-chartered Trust to a National Trust.

 

• Check this out – Amazon One (a biometric payment solution and contactless way for people to use their palm to enter, identify, and pay) is rolling out to select Whole Foods Market stores in the Seattle area.

 

• Mastercard announced an agreement to acquire Ekata for $850M in response to the rapid increase in online commerce.  Ekata is in the red hot online identity verification space that provides a score in real time to verify the authenticity of the person making the transaction.

 

• We are definitely starting to see Bank M&A deals pick up, but the one that broke my heart was HPS Investment Partners acquires Marlin Business Services Corp. where Marlin Business Bank will effectively “de-bank” and cease operations as a bank.  Now don’t get me wrong – I know that Marlin is an equipment leasing and business capital lender; and maybe not your “traditional” bank……  And they did get a nice 65% premium on closing share price, but the truth is that the transaction equates to 1.48X P/TBV as of Dec 31, 2020 – another bank going away at traditional community bank performance multiples.  With all of the fintech / challenger FI’s out there trying to obtain a charter, it just seems wrong to see another one go away (especially one that does not have an antiquated branch network; and has a successful business lending platform already in place).

 

• MANTL raises $40M series B funding as their revenue grew 210% (dang!) in 2020 while providing digital new account opening solutions for banks and credit unions.

 

• Welcome Tech raises $35M in Series B bringing total funding to $50M.  Welcome Tech serves the Hispanic immigrant community through their Saber es Poder (Knowledge is Power) platform with the PODERcard Visa Debit Card issued by Green Dot.

 

• Deluxe to acquire First American Payment Systems for $960M in cash and is expected to accelerate Deluxe’s transformation into a leading payments technology company as part of its One Deluxe strategy.

 

• BNPL fintech Affirm announced an agreement to acquire Returnly, an online product return platform, for approximately $300M.  This deal looks good as Returnly allows eligible consumers to receive an instant merchant credit upon initiating a return, allowing them to order a new or replacement item immediately (and queue up another BNPL transaction for Affirm) versus waiting until their return is fully processed. Thus making returns and exchanges seamless and helping merchants drive higher return-to-repurchase rates, increased revenue from returns and higher customer satisfaction – oh yeah, and even more money for Affirm!  LOL

 

• In the banking world, Florida and Boston have been very active as of late:
  • A quick look at the FedFis Bank M&A database (yep, that’s a plug) shows that the Greater Boston area has been the focus of significant M&A announcements.  4/22 - Independent Bancorp to acquire Meridian Bancorp in Peabody, MA for $1.2B (1.5x P/TBV);  4/7 - Eastern Bankshares to acquire Century Bancorp for $643M (1.75x P/TBV);  2/22 - M&T Bank to acquire Peoples United Financial which has significant branch presence in Boston for $7.6B (1.64x P/TBV); and earlier this year on 1/4 – SVB Financial to acquire Boston Private Financial Holdings for $900M (1.15x P/TBV).
  • Conversely, a review of the FedFis De Novo Report (yep, that’s another shameless plug) points to Florida seeing an expansion wave of De Novo activity.  Locality Bank (pending De Novo application submitted 3/19), Climate First Bank (FDIC conditional approval 3/26), OUR Community Bank (FDIC conditional approval 3/5), and Payservices (existing FL money transfer company).

 
 
Random Uncle Sean Stuff:

• Funniest thing I read this week was from the infamous El Arroyo sign – “It’s 4/20!  Don’t forget to leave milk and cookies out for Willie Nelson!”
• Headed over to see Tanner Mayo this weekend.  Hopefully it’s not too muddy at his ranch after today’s rainfall – but if it is, that’ll just make it even more fun!!!

 
 
Have a GREAT weekend and please stay safe!!!
 
Uncle Sean
 
 
Sometimes known as Sean Mayo – contact me directly for scope and pricing of custom reports / analysis projects at smayo@fedfis.com | 214-604-6961 – or you can contact FedFis Sales Team at 512-960-0911 | info@fedfis.com #FedFisHasTheData FedFis
 
FedFis, LLC disclaimer – The views and opinions of Uncle Sean are of his own and may not necessarily represent the views, endorsements, and/or opinions of FedFis, LLC – we all know he’s a little bit different; but that’s why we love him.
​

Happy Friday!!!!
 
No surprise that Big Bank earnings and Crypto dominated the news this week - Here is the Uncle Sean Update for 4/16/21:

• The Big 4 banks (JPMorgan Chase, Wells Fargo, Citigroup, and Bank of America) all reported 1Q2021 earnings this week.  Spoiler alert - they all beat Revenue and EPS estimates.  Two Key Financial Takeaways:  1) As expected, continued credit provision release is the theme, for an aggregate total of $13.3B for the quarter (Uncle Sean is well-known as a “credit risk superfreak”), but still holding on to substantial credit reserves totaling almost $80B as opposed to $44B pre-pandemic (Dec 2019).  As a result, I expect even more significant release of credit provision going forward as overall credit quality continues to remain stable (fingers-crossed); and 2) Net Interest Margin (NIM) for the Big 4 are all at record lows of 1.9% - 2.0% range – not totally surprising with Fed Rates at zero, but extremely relevant nonetheless (check out this Historical NIM Report from The St. Louis Fed showing industry averages at a 40 year low).  Based on these two points, future bank earnings could prove to be very impressive as additional credit reserves are released (hopefully), loan growth comes back, and interest rates inevitably rise (moderately and over time, of course - LOL) giving reprieve to Net Interest Margins.  You can check out their specific investor decks here - JPM, WF, Citi, BOA.  I really love investor decks WAAAYYY too much!!!!

 

• Coinbase (NASDAQ: COIN) began their highly anticipated Nasdaq debut this week with a reference price of $250 per share, opening at $381 per share, and hit an initial intraday high of $429 before ending their first trading day at $328 per share.  As a cool note, Coinbase granted 100 shares prior to trading (about a $33K value based on first day closing price alone) to each of their approximately 1,700 full time employees as a "thank you".  WOW!!!!

 

• Gary Gensler gets the nod as SEC chairman with a 53-45 Senate vote.  This Politico article labels Gensler as “a battle-tested Wall Street watchdog”.  Look for Gensler to tackle ESG disclosures, digital currencies (one of his specializations as a professor at MIT), SPACs, and payment for order flow.

 

• Credit card issuer, Synchrony Financial, and Gap, Inc. are mutually parting ways after a 22 year credit card relationship once the current contract expires in April 2022.  The portfolio covers approximately 11 million card accounts and represents about $3.8B (5%) of Synchrony’s loan receivables.  Gap is replacing Synchrony with Barclays for their private label and co-branded cards; and will also be switching networks for the co-branded cards from Visa to Mastercard.

 

• Now this gets interesting….  And of course it’s Robinhood – again LOL….  Just before Christmas we talked about Robinhood being sued by Massachusetts state regulator for “gamification of investing” and not focusing on their customers best interest by exposing them to “unnecessary trading risks” by “falling far short of the fiduciary standard.”  Well, this story is back and gets even more entertaining – oops I mean interesting…  The State of Massachusetts Securities Division has now sued Robinhood again and is seeking to revoke Robinhood's broker-dealer license.  On their blog, Robinhood responds by filing a preliminary injunction to prevent the case from proceeding.  Robinhood goes on to mention how much they “love Massachusetts and our Massachusetts customers” – but I bet you that Vlad Tenev isn’t going to rush out and buy a house there anytime soon – LOL!!!!

 

• Another intriguing development in the crypto CBDC space is China’s new digital yuan as referenced in this Newsweek article.  China’s central bank digital currency (CBDC) plans may push the US to some form of response (possibly a USD CBDC sooner rather than later, but who knows).  The Newsweek article lists one of the many concerns is that China could potentially use their CBDC to conduct financial transactions outside of the SWIFT network with countries currently under international sanctions (such as Iran and North Korea).

 

• ConsenSys raised $65M formation round aimed at further developing decentralized finance and other applications on the Ethereum blockchain network.

 

• Hatch launched their business debit card (Mastercard issued by LendingClub Bank) and announced that they have raised $20M in funding.

 

• Routable (business payments platform) raised $30M in Series B funding.

 
 
Random Uncle Sean Stuff:

• In remembrance of Prince Phillip, check out a few of these really nice collections of his life in pictures:  BBC, BuzzFeed, The Washington Post
  • Hey – a dapper & dashing mid-1940’s Duke of Edinburgh looks very similar to our very own FedFis FinTech Strategist and Head of Sales, Mr. Bobby Button!!!
• Gonna fire up the big smoker (Ole Nelly) this weekend and smoke some Salmon and maybe even some beef tri-tip….  Y’all come on over!!!!!

 
 
Have a GREAT weekend and please stay safe!!!
 
Uncle Sean
 
 
Sometimes known as Sean Mayo – contact me directly for scope and pricing of custom reports / analysis projects at smayo@fedfis.com | 214-604-6961 – or you can contact FedFis Sales Team at 512-960-0911 | info@fedfis.com #FedFisHasTheData FedFis
 
FedFis, LLC disclaimer – The views and opinions of Uncle Sean are of his own and may not necessarily represent the views, endorsements, and/or opinions of FedFis, LLC – we all know he’s a little bit different; but that’s why we love him.
​

Happy Friday!!!
 
Here is the Uncle Sean Update for 4/9/21:
 

• This has been WIDELY circulated all week, but is worth mentioning again…..  Jamie Dimon (arguably the World’s most powerful banking leader as Chairman and CEO of JPMorgan Chase) released his annual letter to shareholders this week.  It’s a good read if you have the time (66 pages), but If you don’t’ have the time – I’ll break it down for you in 2 Key Takeaways: 1) A very bullish stance on the economy – “…with excess savings, new stimulus savings, huge deficit spending, more QE, a new potential infrastructure bill, a successful vaccine and euphoria around the end of the pandemic, the U.S. economy will likely boom,” Dimon said. “This boom could easily run into 2023 because all the spending could extend well into 2023.”; and 2) A resounding alarm that incumbent banks are facing enormous competitive threats from virtually every angle -  “Banks are playing an increasingly smaller role in the financial system” citing the rapid growth of payment and fintech companies as well as Big Tech (specifically naming Amazon, Apple, Facebook, Google, and Walmart as JPM competitors).

 

• In case you missed it, Walmart may have given us a sneak peek of what their Ribbit backed fintech offering may look like through a trademark filing with the U.S. Patent and Trademark Office.  Say hello to Hazel by Walmart….  The trademark references a multitude of services that might be offered including (but not limited to): banking and financial services including issuing and processing of credit card, debit card and prepaid card services (including mobile payments), lending, electronic funds transfer, bill payment services, financial counseling, credit repair, foreign exchange payment processing, and virtual currency transaction processing amongst other services…..  Sounds like a bank to me, but I’m still a little confused as to why Arvest Bank (owned by the Walton family) isn’t leading the charge for Walmart financial services….

 

• Dwolla announced real-time payments (RTP) option through an integration with Cross River Bank (those folks at Cross River Bank are serious FI innovators).  So what???  It’s yet another “bank only feature” (i.e. protective industry moat) that has been breached by the US fintech / Neo bank space.

 

• SoFi is dipping their toes into the auto loan refinancing market through partnership with MotoRefi by connecting borrowers with auto loan refinancing options through Lantern by SoFi.  To me this feels like a basic referral model since Lantern is a product comparison site where consumers can shop for and compare financial offers from hundreds of lenders and funding sources.  I suspect some of this will change if / when SoFi obtains approval to acquire Golden Pacific Bank and obtains their own bank charter.

 

• And our Credit Union friends are making news again this week!  Check out this new VC fund called Curql.  For the love of everything that is Holy, please do not ask me how to pronounce that – LOL (just kidding – it’s actually pronounced “circle”).  They operate as a VC “gateway for FinTech access to credit unions” launched by leading credit unions of Members Development Company and managed by Next Level Ventures.  The flagship Curql Fund I announced its first funding close of $70M this week.

 

• But wait!!!!  Not to be outdone by CUs, take a look at JAM FINTOP Banktech who just announced a $150M investment fund (of which all 66 of the funds limited partners are community banks) designed to help accelerate technology adoption at community banks across the United States.  The JAM FINTOP Banktech investment team is “currently evaluating investments in B2B banktech (aka FI Fintech) companies with active deployments in banks and annual recurring revenue approaching or exceeding $1 million”.  Check them out at jamfintop.com.

 

• While widely reported as rumor over the last few weeks, Plaid confirmed this week that they raised $425M in Series D funding round at an estimated $13.4B valuation.  This comes just a few months after Visa and Plaid terminated their $5.3B merger after a year citing Department of Justice lawsuit on antitrust grounds.  Now to be fair, that $5.3B purchase price was set before the pandemic began (which greatly accelerated digital adoption and Plaid’s growth too).  Take a look at this Forbes article that claims Plaid grew by 60% last year and “annualized” revenue reached about $170M by Dec 2020 (citing anonymous source).  Considering a $225M 2021 total revenue model, that equates to 59x forward revenue multiple.  Yes, top line revenue multiple – not earnings…..  WOWZA!!!

 

• Another rumor was confirmed this week – Ramp (provides a Visa business charge card issued by Sutton Bank along with an expense management platform) announced that they raised $115M Series B round in two tranches.  The first of which, a $65 million investment led by D1 Capital Partners, valued the startup at $1.1 billion.  An additional $50 million investment led by Stripe (yes, the online payments giant) pushed the valuation to $1.6 billion.

 

• Online mortgage lender Better scores a $500M investment from SoftBank at a valuation of approximately $6B.

 

• Avant (fintech alt lender) has acquired Zero dba Level which now gives Avant full Neo / Challenger Bank status as they will be able to complement their existing consumer lending platform (Mastercard CC and Personal Loans sponsored by WebBank) with Level’s established interest bearing DDA with Visa debit card (issued by Evolve Bank & Trust) and cash back rewards in a mobile app.

 

• Fidelity, Square, and Coinbase launch a new bitcoin Lobbyist / Trade Group called Crypto Council for Innovation.

 

• Coinbase announced 1Q2021 "estimated" earnings ahead of next week’s highly anticipated direct listing.  Revenues increased about 9x (driven by the rally in the price of bitcoin) to $1.8B from $191M in the same quarter last year; and net income grew to about $800M from $32M a year ago.  You can check out their full S-1 Registration Statement if you really want to get into the nitty-gritty.

 
 
Random Uncle Sean Stuff:

• So I finally passed my 2 week incubation period from my 2nd Covid vaccination.  First thing I did was go see Davey and Tanner as its been about a year!!!!  WFH is cool and convenient, but there is a special refreshing energy that you can certainly feel when you are around others that are passionate and enjoying what they do.  I even got to spend an hour or so fishing with Dave (I caught more than he did – don’t let him lie to you about that – LOL)!!!!!
• Back by popular demand- here are a few quick Dad Jokes:
  • I feel a lot happier since I switched from coffee in the morning to orange juice.  Doc says it’s probably the vitamin C and naturally occurring sugars – but I’m pretty sure it’s the vodka.
  • Why didn’t they name the iPhone charger an Apple Juicer?
  • I ate a Kids Meal at McDonalds…..  His Mom was not impressed.
  • What’s the difference between empathy and apathy?  I don’t know and I don’t care…
  • And another instant family classic……..  Aunt Patty asked me to stop singing “I’m a Believer” by The Monkees because she found it annoying.  At first I thought she was just kidding………….  But then I saw her face!  LOL!!!!!

 
 
Have a GREAT weekend and please stay safe!!!
 
Uncle Sean
 
 
Sometimes known as Sean Mayo – contact me directly for scope and pricing of custom reports / analysis projects at smayo@fedfis.com | 214-604-6961 – or you can contact FedFis Sales Team at 512-960-0911 | info@fedfis.com #FedFisHasTheData FedFis
 
FedFis, LLC disclaimer – The views and opinions of Uncle Sean are of his own and may not necessarily represent the views, endorsements, and/or opinions of FedFis, LLC – we all know he’s a little bit different; but that’s why we love him.
​

Happy Good Friday!!!
 
It was a short Holliday Week for many folks, but jam packed with some really cool market events – Here is the Uncle Sean Update for 4/2/21:
 

• Visa announced the ability to settle USDC stablecoin in a pilot program over Ethereum blockchain.  “Working with Anchorage, the first federally chartered digital asset bank and an exclusive Visa digital currency settlement partner, Visa has launched a pilot that allows Crypto.com to send USDC to Visa to settle a portion of its obligations for the Crypto.com Visa card program.”  While initially only available on the Crypto.com platform via Anchorage API’s, Visa will offer the service to more partners later this year.

 

• Paypal launches Checkout with Crypto – a crypto payment platform that allows customers to convert cryptocurrencies into fiat currencies when they place their order (presumably cutting any cryptocurrency volatility risk for the merchant).  This expands on their partnership with Paxos as well as their recent acquisition of Curv (cryptocurrency security firm).

 

• Unifimoney partners with Gemini for cryptocurrency trading of more than 30 cryptocurrencies to Unifimoney customers.  “Unifimoney users will now have access to Gemini’s platform through their Unifimoney account and can access the full suite of Gemini’s crypto assets to seamlessly buy, sell, and store their crypto. This partnership makes Unifimoney the only investing app that allows users four different ways to invest including passive investing with robo portfolios and auto invest, active trading commission free, access to trading Gold, Silver, Platinum, and Palladium, and now the ability to trade cryptocurrencies.”

 

• Q2 announces agreement to acquire ClickSWITCH.  This is definitely a strategic acquisition to supplement their Q2 GRO digital new account opening app as ClickSWITCH is an “automated financial account switching solution” that allows account holders to switch to another financial institution in minutes.

 

• Walgreens is making news this week related to their upcoming launch of a bank account and mobile app consisting of a Mastercard debit card (MetaBank).  This comes after they announced a Mastercard credit card offering (Synchrony Bank) earlier this year.  Did you know that Walgreens has over 9,000 locations (who said the branch model is dead – LOL)?  While we are on the topic of retail embedded banking, did you know that 7-Eleven has a mobile banking app?  Seriously – check it out at Transact by 7-Eleven.  They have a prepaid GPR Mastercard debit card (MetaBank) with a mobile app, rewards, bill pay, and mobile check deposit (Ingo Money / First Century Bank).

 

• Yep – I am reading the same articles as you are regarding H&R Block planning to enter the digital banking space….  And I am confused too…  H&R Block already has Wave Money (business) app with a Visa business debit card issued by Community Federal Savings Bank; as well as the Emerald Card (consumer) including mobile app, personal loans, and prepaid GPR Mastercard debit card issued by MetaBank with direct deposit, mobile check deposit (Ingo Money / Sunrise Banks), and bill pay….  See page 38 of the Dec 2020 Investor Day Presentation where H&R Block mentions that “67% of Block customers likely to open a bank account with Block if offered”…..  Maybe someone should let them know that they already have multiple bank account offerings?  Nah - LOL!!!!!

 

• Beam Financial and owner, Yinan “Aaron” Du, get a permanent ban by the FTC (and as well they should) as part of a settlement – OUCH!!!! 

 

• Dapper Labs, a non-fungible token (NFT) company behind CryptoKitties and NBA Top Shot, has raised $305M at a valuation of $2.6B.  If you haven’t seen it, you MUST watch this hilarious SNL YouTube video on NFT’s – it’s an instant classic!

 

• Coinbase set to commence trading on April 14 after receiving SEC approval for their direct listing; and selects Brett Redfearn (former director of the SEC) to run their capital markets division.

 

• Vystar Credit Union announced an agreement to acquire Heritage Southeast Bank in Georgia.  A quick cursory review of the FedFis M&A database (yes, that was a plug) tells me that this is the largest Credit Union acquisition of a Bank EVER as HSB has $1.57B in total assets as of 12/31/2020.  This is also VyStar’s second acquisition of a bank in 2 years.

 

• The NCUA liquidated Indianapolis’ Newspaper Federal Credit Union (INFCU) this week.  Although there have been three CUs conserved this year, this is the first liquidation since May 2020.  Special shout out to the FedFis Analyst Team (yes, another plug) - they are freakin’ Rock Stars!!!  The FedFis Rating © for INFCU was 4.56 at 9/30/20 call report and 4.63 at 12/31/20 call report placing them in the lowest possible percentile for the last six months.  The FedFis Rating © is consistent with regulator scoring on a 1.00 (best) to 5.00 (worst) scale.

 

• I believe it was the 2/26 Uncle Sean Update where we talked about TransferWise changing their name to Wise (wise.com/us), but not to be confused with the original Wise (wise.us)….  Well, now the original Wise (wise.us) has changed their name to Solid…..  You know I just can’t help myself, so here it comes - Wise got wise to TransferWise’s change to Wise and so Wise became wiser and converted to Solid - but who is the wisest with the wisecracks???  LOL!!!!!

 
 
Random Uncle Sean Stuff:

• Me and Aunt Patty daringly ventured out of the house last Saturday and went to Creekside Cookers BBQ and Bar in Wimberley, TX for lunch.  It’s a nice setting under huge Live Oak trees with outdoor picnic table seating and a full outdoor bar.  Aunt Patty had Loaded Rodeo Nachos (with chopped brisket) and I had catfish and some ice cold beer.  The food was fantastic and the outdoor venue was everything I had hoped for.  Springtime in the Texas Hill Country is nothing short of amazing. 
• And the Final Four is set!  Women: South Carolina vs Stanford and UConn vs Arizona, Men: Houston vs Baylor and UCLA vs Gonzaga!!!!!
• Does surfing the internet count as exercise (asking for a friend)?

 
 
Have a GREAT weekend and please stay safe!!!
 
Uncle Sean
 
 
Sometimes known as Sean Mayo – contact me directly for scope and pricing of custom reports / analysis projects at smayo@fedfis.com | 214-604-6961 – or you can contact FedFis Sales Team at 512-960-0911 | info@fedfis.com #FedFisHasTheData FedFis
 
FedFis, LLC disclaimer – The views and opinions of Uncle Sean are of his own and may not necessarily represent the views, endorsements, and/or opinions of FedFis, LLC – we all know he’s a little bit different; but that’s why we love him.
​

Happy Friday!!!!
 
There is some cool stuff going on this week – Here is the Uncle Sean Update for 3/26/21:
 

• Is mobile app based ordinary investor IPO access the new rage?  It certainly looks that way….  Robinhood is reportedly building a platform to “democratize” IPOs according to this Reuters article – basically allowing ordinary investors to buy shares in IPO listings prior to trading (the article cites an average first-day trading pop on U.S. listings of businesses in 2020 was 36%, according to data provider Dealogic).  They are also planning on reserving some of their own shares for their upcoming IPO for their users to acquire prior to the commencement of trading.  Interestingly enough, SoFi also announced a platform for its members to invest in IPOs through their SoFi Invest app.  SoFi said the offering will be available to anyone who opens or has an investment account with the company and has at least $3,000 in their account.

 

• Funniest thing I read all week – “do you think Robinhood will have to halt trading on their own IPO?”  LMAO!!!!

 

• Check these guys out - Greenwood (fintech startup designed to support Black and Latinx consumers and businesses) gets a double boost from Uncle Sean this week.  First, they announced $40M in Series A funding round from an impressive set of investors led by Truist Ventures, JPMorgan Chase, Bank of America, Wells Fargo, PNC, Citigroup, Mastercard, Visa, FIS, Banco Popular, and several other VC firms including SoftBank’s Opportunity Fund…  WOW - how’s that for some name dropping?!?!?!  Greenwood plans to officially launch this summer (recall about two months ago where we talked about Greenwood already reaching 500K users in the first 100 days of beta) with a debit card, savings, P2P, and mobile deposit capture.  They plan on providing credit and investment products in 2022.  Secondly, Greenwood also announced its Minority Deposit Institution (MDI) program where they will share interchange fees with MDI partners, create co-marketing campaigns, and also drive new customers to MDI partners for consumer loan products.  NOW we are getting somewhere – a minority / underserved focused challenger platform that also harnesses the power of MDI / CDFI programs…..  Nicely done, Greenwood!!!!

 

• Coinbase to delay direct listing to April.

 

• Revolut applies for US Bank Charter.  This (somewhat ironically) comes just days after Revolut announced an exit from Canada (and unable to obtain a Canadian banking license) which was still in beta and hadn’t even launched yet.

 

• During a virtual panel discussion on digital banking hosted by the Bank for International Settlements, Federal Reserve Chairman Jerome Powell stated that the central bank is still exploring the potential for a central bank digital currency (CBDC), but is in no hurry; and cryptocurrencies like bitcoin can't replace the US dollar as they are “highly volatile and therefore not really useful stores of value and they’re not backed by anything”.  The Boston Fed last year entered into a partnership with the Massachusetts Institute of Technology on a multiyear study into developing a central bank digital currency.  According to this CNBC article, the work “is expected to take two to three years and even then is focused more on the hypotheticals of a central bank-sponsored cryptocurrency rather than imminent implementation.”

 

• Jumio raises $150M equity investment from Great Hill Partners, but did not disclose what size ownership stake Great Hill will now have.  Jumio currently focuses on eKYC / eKYB and AML in the global B2B market (with plans to expand into B2C).  You can check them out at Jumio.

 

• And even more funding in the super-hot on-line ID verification, Fraud, and AML space – Feedazi raises $200M in Series D funding at the coveted $1B Unicorn valuation status (is that even a thing anymore???).  Feedzai states that its “customers include four of the five largest banks in North America, 80% of the world’s Fortune 500 companies, 154 million individual and business taxpayers in the U.S., and has processed $9 billion in online transactions for two of the world’s most valuable athletic brands. In total its reach covers some 800 million customers of businesses that use its services. In addition to Citibank, its customers include Fiserv, Santander, SoFi and Standard Chartered’s Mox.”

 

• Plaid announced their inaugural FinRise class of 2021 consisting of Global Data Consortium, Guidefi, OfColor, Walnut, and Zeta.  Plaid’s FinRise is an incubator program for early-stage founders who are Black, Indigenous, or People of Color (BIPOC) designed to “promote a more diverse and inclusive fintech ecosystem.”

 

• AI lending platform Upstart is in the news again (last week we talked about the announcement to acquire Prodigy Software).  Now they have announced the launch of a new offering to connect borrowers with banks and credit unions called Upstart Referral Network.  Who Cares???  Well, if you think about it, this is pretty cool as their original model was all-digital AI enabled consumer credit decisioning (using 1,600 + data points) to help banks and credit unions make better and more cost effective loan decisions – now they are helping to find and connect qualified borrowers to qualifying banks and CUs (based on the FI’s specific risk tolerances) for more tailored and affordable digital loan process for all parties.  Not to mention that the digital New Account Opening integration (DDA) that Upstart now provides for the FI’s during the loan application process is a nice hook.

 

• The State of Illinois may soon become the second State to issue a "special purpose trust" bank charter that lets special trusts hold digital assets, including cryptocurrencies.  Per the article, “other states, including New York, California and Texas, have taken different approaches, including creating a business license, oversight office and providing guidance, respectively.”  Wyoming is the other State with their Special Purpose Depository Institution (SPDI) charter.

 
 
Random Uncle Sean Stuff:

• SOAPBOX MOMENT - Sometimes I crack up and literally shake my head while reading many of the fintech “pontificators” in the industry (Tanner calls them “talking heads” – LOL) trying to predict the future of literally everything financial….  It is exhausting.  Now don’t get Uncle Sean wrong, yes – I know that things are changing; and for the good; and it’s exciting!  But I’m also old enough to know that mass societal adoption of anything takes time – especially if it is disruptive (even if you CAN predict the future).  I vividly recall the gasoline crisis in the early 70’s where we would sit in line for hours and put the car in neutral to push it forward (because starting the engine would waste too much gas, provided you even had any).  That was 50 years ago and we are just now seeing electric vehicles on a regular basis (those Tesla’s are cool).  We had the technology back then (hell, we had just sent men to the moon for cryin’ out loud).  But you simply cannot succeed in disrupting a petroleum based society overnight with an alternate energy solution – even if it is for the greater good; and even if it is available.  Some things just take time….  Damn that was deep wasn’t it?  WHEW!!!!

• Just in case you were wondering…  Yes, me and Aunt Patty are still rocking that air fryer!  My favorites so far are garlic parmesan chicken wings, coconut shrimp, and homemade sweet potato fries!!!!

 
 
Have a GREAT weekend and please stay safe!!!
 
Uncle Sean
 
 
Sometimes known as Sean Mayo – contact me directly for scope and pricing of custom reports / analysis projects at smayo@fedfis.com | 214-604-6961 – or you can contact FedFis Sales Team at 512-960-0911 | info@fedfis.com #FedFisHasTheData FedFis
 
FedFis, LLC disclaimer – The views and opinions of Uncle Sean are of his own and may not necessarily represent the views, endorsements, and/or opinions of FedFis, LLC – we all know he’s a little bit different; but that’s why we love him.

Happy Friday!!!
 
Here is the long awaited Uncle Sean Update for 3/19/21:
 

• It’s Fed Week (yes, I dig it a little too much - LOL)!!!  On Wednesday, the Fed issued their FOMC statement.  In summary, the economy is getting better & stronger, but there is still a ways to go; and unemployment still a concern.  As completely expected (again), the Fed plans to remain accommodative and keep interest rates at zero until the cows come home (probably 2023); and continue the sizeable QE era bond buying program at the consistent rate of at least $120B per month ($80B+ in Treasury securities and $40B+ in MBS) as long as is needed.  Additionally, the long-term inflation target remains at 2% (on average for an “extended period of time”, not just in a transitory basis); and will be striving for maximum employment.  If you want to geek out even more, you can refer to the Fed’s Summary of Economic Projections in detail.

 

• Hey, here’s some good news – the IRS announced that the federal tax deadline for individuals has been extended from April 15 to May 17, 2021 for the 2020 tax year.  I love procrastinating, especially when it comes to my taxes – LOL!!!!

 

• Take a look at LendingClub Bank 4Q2020 Investor Presentation for yet another example of the value of a bank charter to a fintech.  On page 12, LendingClub estimates a 90% reduction in funding costs that equates to $30M in cost savings per year for every $1B in deposit funding.  Their acquisition of Radius Bank added $2B in deposits which means that they have already achieved $60M in cost savings per year going forward – just in cost of funds alone.  CHA-CHING!!!!!

 

• Now this is pretty cool and could become a new innovative trend in a digital friendly world…  In advance of Coinbase's Direct Listing, as opposed to the traditional investor “Road Show”, Coinbase is releasing their Investor Education Resources series through videos and launching a Reddit “Ask Us Anything” venue.  Here is their amended S-1 if you really want to get weird and dig into the numbers.

 

• Stripe reaches $95B valuation amongst $600M Series H capital raise.  That’s quite a valuation jump considering Stripe’s previous capital raise last April was $600M at a $36B valuation.  Stripe said they will “use the capital to invest in its European operations, and its Dublin headquarters in particular, support surging demand from enterprise heavyweights across Europe, and expand its Global Payments and Treasury Network.  Enterprise revenue is now both Stripe’s largest and its fastest growing segment, more than doubling year over year.”  It’s worth noting that Stripe has 50 merchant customers that process $1B+ annually; and Stripe signed up over 200,000 customers in Europe in 2020 alone – That’s impressive!!!!

 

• Visa and Mastercard have both agreed to delay fee hike (primarily in online credit card fees – i.e. card not present interchange) until April 2022 while the economy continues to recover.  Now hang on a minute - before we start shooting arrows at these behemoth processors for trying to increase fees on merchants during a pandemic (because that’s what politicians want you to believe), it is only fair to mention that this is nothing new as Visa and Mastercard regularly adjust interchange rate schedules each year.  In fact, these fees were already supposed to take effect last April (yes, 2020), but were voluntarily delayed until this April, and now are being voluntarily delayed again until April 2022 - all while facing increased costs as the world launched ahead to a digital-first economy.  And now you know the rest of the story (yep – that’s an intentional nod to the late Paul Harvey).

 

• The Senate confirmed on Tuesday, Isabel Guzman to lead the Small Business Administration and oversee Covid-19 initiatives including the PPP.

 

• Here is a quick heads-up in case you missed it – Nacha announced that they are expanding same day ACH availability by 2 hours every business day effective March 19, 2021.  “Currently, the latest that an ODFI can submit files of Same Day ACH transactions to an ACH Operator is 2:45 p.m. ET (11:45 a.m. PT).  The new window will allow Same Day ACH files to be submitted until 4:45 p.m. ET (1:45 p.m. PT), providing greater access for all ODFIs and their customers.”  This means that interbank settlement for these entries in the third same day ACH window will occur at 6:00 pm ET.

 

• Online lender Upstart (UPST) announced that they have agreed to acquire Prodigy Software, an end-to-end digital platform for car dealerships that works with existing lenders.  “With the acquisition of Prodigy, Upstart will accelerate its efforts to offer AI-enabled auto loans through the tens of thousands of auto dealers nationwide where the majority of auto loans are originated.”

 

• Blend (a BaaS cloud-based consumer lending platform) announced a definitive agreement to acquire Title365 (title, escrow, and settlement company) for approximately $422M.  This comes just a couple of months after Blend raised $300M in Series Gfunding round.  PYMNTS has a really good Interview with Blend Head of Finance, Marc Greenberg where he discusses the need and Blend’s solution to the vertical digital integration of the entire home buying process into a single unified platform delivering both speed and efficiency.  Uncle Sean agrees!  Having bought and sold about half a dozen homes in my life (so far), I have always felt that the process was way more complicated than it needed to be – not to mention SLOWER THAN MOLASSES IN THE WINTER!

 

• Socure raised $100M in Series D funding round launching them into Unicorn status at $1.3B valuation.  Socure is a leader in the Identity Verification, KYC/AML and Document Verification space.  This Series D round comes less than six months after they raised $35M for a total funding to date of $196M.

 

• Immediate announced $15.5M capital raise split between growth equity and a working capital facility.  Immediate is in the red hot Earned Wage Access (EWA) space.  With their HR/payroll integration they can advance up to 50% of eligible wages either to an employee’s linked bank account or to a prepaid Visa debit card via Visa Direct in real-time.

 

• Crypto custody firm Fireblocks raised $133M in Series C funding bringing their total funding to date to $179M.

 

• Check out my ole buddies over at Samsung in South Korea getting it done with Mastercard as they announce an upcoming launch of a biometric payment card that allows users to authenticate transactions using their fingerprint.

 
It is a SUPER nice day outside today so Uncle Sean is gonna try to sneak out a little early and fire up the BBQ grill.  P.S. Don’t tell my boss – he thinks I’m hard at work!!!!!
 
Random Uncle Sean Stuff:

• Tomorrow is the first day of SPRING!  Wow – what a difference a month makes!  About 30 days ago we were dealing with single digit temps, freezing rain, rolling blackouts, busted water lines, and ultimately about 5 inches of snow here in the Texas Hill Country.  Now I’m mowing the dang yard already, but I’m not complaining!
• Aunt Patty and I rented the movie Coming 2 America (the new sequel to the 1988 hit) the other evening and I cracked up the entire time – Uncle Sean gives it two thumbs up!
• Okay, okay – one quick Dad Joke……..  Getting your stimulus payment on St. Patrick’s Day must be the luck of the IRS….  LOL!!!! 

  
Have a GREAT weekend and please stay safe!!!
 
Uncle Sean
 
Sometimes known as Sean Mayo – contact me directly for scope and pricing of custom reports / analysis projects at smayo@fedfis.com | 214-604-6961 – or you can contact FedFis Sales Team at 512-960-0911 | info@fedfis.com #FedFisHasTheData FedFis - The Home of Fintech Banking Data
 
FedFis, LLC disclaimer – The views and opinions of Uncle Sean are of his own and may not necessarily represent the views, endorsements, and/or opinions of FedFis, LLC – we all know he’s a little bit different; but that’s why we love him.

Happy Friday once again!!!!!

Here is the Uncle Sean Update for 3/12/21 (one year after the pandemic started):

• SoFi makes the headline of the week by announcing the acquisition of Golden Pacific Bancorp, Inc.. and its wholly owned subsidiary Golden Pacific Bank, N.A. ($150M in total assets and $17M tangible common equity).  For my non-banking brethren, think of this as a reverse merger where SoFi is buying a Bank Holding Company (BHC) and the Bank as a wholly owned subsidiary, but maintaining the Holding Company Federal Reserve number as well as the Bank Charter number and just renaming the BHC and the Bank.  They also plan on injecting $750M (that is a heck-of-a-lot of capital) into the national bank to expand their digital banking operations. 

• GEEK WARNING (LOL) – Uncle Sean geeks out a little here related to SoFi and Bank Charters:  For a “relatively” small sum of only $22.3M (basically the cost of a Series A round), SoFi just bought a national bank charter.  Evidently, this is the path of least resistance as well as the cheapest solution for SoFi (the OCC granted SoFi conditional approval for a national bank charter last October, but they still needed Federal Reserve and FDIC blessings).  Taking a page from the Jiko playbook, all SoFi has to do now is apply to become a Bank Holding Company.  This is the culmination of a long and expensive process as SoFi has been trying to obtain a charter since 2016.  To my Bank friends, THIS PART IS FOR YOU – there is a new breed of acquirer now and traditional M&A performance metrics really don’t apply.  The value of a bank charter can be way more than you think in this new environment.  Instead of selling your bank at essentially 1.3x P/TBV (Golden Pacific Bank), look at what your buyer is willing to pay (i.e. opportunity cost of not having a charter) – as well as WHAT the acquirer is actually buying…..  Recall just two months ago where we talked about SoFi going public via SPAC acquisition - see page 35 in the SoFi Investor Deck where SoFi discloses the value of a bank charter (reiterate – ANY charter, not a specific bank) to their operations to be $200M - $300M in incremental EBITDA per year for the next 4 years.  HOLY COW!!!  Now, I know this can be a stretch and I don’t mean to presume that GPB could have received 10x – 20x more purchase price, but if you STILL want to focus on bank financial performance metrics and acquisition pricing in the traditional bank M&A sense, then SoFi just bought a national bank with a 1 month pay-back period (that’ll make your stock jump!)……  Summary – it’s the Charter that is being sold, NOT your bank performance…  So what’s next for SoFi?  Uncle Sean is very interested to see how quickly SoFi Bank becomes a Sponsor Bank offering BaaS solutions while leveraging the Galileo platform (April 2020 acquisition for $1.2B) to assist with third-party fintech card issuance as Program Manager and Processor.  VERY cool stuff (whew - I need a nap now)!!!

• And another interesting industry group launched this week – the Financial Technology Association founding members include Afterpay, Betterment, Brex, Carta, Figure, Marqeta, Quadpay, Plaid, Ribbit Capital, Wise, and Zest AI (pretty dang impressive).  The group strives to be an advocate for consumer-centric fintech development and “will educate stakeholders and support the modernization of financial regulation to drive greater financial inclusion, equity and opportunity.”

• It’s official - PayPal is again taking on more crypto technology strategy.  Widely rumored last week, but actually confirmed this week as they announced the acquisition of Curv to “accelerate and expand its initiatives to support cryptocurrencies and digital assets.”  Financial terms of the deal were not disclosed (but several sources are reporting approximately $200M).  Curv is a leading provider of cloud-based infrastructure for digital asset security.

• Check out Paymynt Financial Group – they announced the upcoming launch of the MYNT PayCard (coming 2Q2021) described as a “next-gen bankless smart card” targeting the U.S. underbanked population.  It is both a cryptocurrency wallet and a payment card that allows members to reload, send, and receive multiple cryptocurrencies through non-bank blockchain technology that they refer to as “chip-to-chain”.

• BlockFI raises $350M in Series D funding with a valuation of approximately $3B in anticipation of doubling their 500 person team by the end of 2021 and launching the BlockFI Bitcoin Rewards Credit Card in early 2021.

• M1 Finance raises $75M in Series D funding round citing rapid growth in assets-under-management in excess of 350% since February 2020. 

• NYDIG raises $200M in new growth funding from strategic investors to help fund its business initiatives related to bitcoin.  NYDIG started to gain serious media attention in December when it helped Massachusetts Mutual Life Insurance Co. purchase $100 million in bitcoin.  MassMutual took a $5 million stake in NYDIG at the time and has returned with an additional investment in the company with this round.

• Autobooks raises $25M in Series B round following a strong 2020 with “232% revenue growth and the addition of 46 financial institutions to Autobook’s rapidly growing customer base of banks and credit unions with assets ranging from $50 million to $350 billion.”

• This article in CU Insight about Konstantina Baker made me happy - ProFed promotes Konstantina G. Baker to President / CEO.  This is super cool as she began her career at ProFed Credit Union in 1985 as a teller handling member deposits and loan payments. She worked her way through the ranks and served as assistant vice president of data processing, vice president and controller, chief operating officer, and is now President / CEO of the $570M Indiana CU.  WOW – Congratulations on an amazing career!!!!

Random Uncle Sean Stuff:

• Aunt Patty and I are celebrating 27 years of marriage today!!!!
• Don’t forget to set your clocks forward an hour this Sunday at 2:00 AM for Daylight Savings Time (where observed). 
• Looking back at one year of Covid-19 this month, here are a few notable terms / phrases that I was pleasantly ignorant of before the pandemic began:  Virtual Happy Hour, Anti-Masker, Social Distancing, Quarantini (I actually like that one), Covidiots, Amazon Spendemic, Coronacut (when your wife shaves your head), and TP Hoarders.  Remember when Corona was just a beer?  Wearing a mask in the bank lobby is now normal and required…  And my personal favorite – Covid-19 gave me 20 (as in pounds gained)!!!!

Have a GREAT weekend and please stay safe!!!
Uncle Sean

Sometimes known as Sean Mayo – contact me directly for scope and pricing of custom reports / analysis projects at smayo@fedfis.com | 214-604-6961 – or you can contact FedFis Sales Team at 512-960-0911 | info@fedfis.com #FedFisHasTheData FedFis​

FedFis, LLC disclaimer – The views and opinions of Uncle Sean are of his own and may not necessarily represent the views, endorsements, and/or opinions of FedFis, LLC – we all know he’s a little bit different; but that’s why we love him.

Happy Friday!!!!!

March is Women’s History Month and March 8th is International Women’s Day!!!!  May we all harness the amazing strength, wisdom, and compassion of the late and Honorable Ruth Bader Ginsburg (the “Notorious RBG”) and continue to make the world a better place!
Here is the rest of the Uncle Sean Update for 3/5/21:

• The Federal Reserve appointed Sunayna Tuteja as Chief Innovation Officer.  Tuteja’s most recent experience involves more than a decade at TD Ameritrade included being head of strategic partnerships and emerging technology; and eventually as Head of Digital Assets and Digital Ledger Technology.  Undoubtedly a strategic hire as the central bank continues to research Stablecoins and Central Bank Digital Currencies (CBDCs).  This follows a similar announcement (Chief Innovation Officer) at the FDIC just a few weeks ago.

 

• Square Financial Services announced that they have officially begun banking operations under their Utah ILC bank charter.  Approval with Utah DFI and the FDIC was achieved back in March of 2020, but they just now began operating under the charter.  The primary purpose of the bank will be to offer business loans and deposit products.  Initially targeting the underwriting and origination of business loans for Square Capital’s existing lending product; and eventually being the loan provider for Square sellers across the U.S.

 

• Square also dropped $297M in cash and stock to acquire a majority stake in Tidal, a music streaming service.  Yep – it seemed a little weird to me too, but TechCrunch has a very interesting article that speculates into the possibility of Square moving into music-based non-fungible tokens (NFTs).  All the cool kids are doing it (and “non-fungible” is fun to say)!

 

• Well, the pending Walmart fintech startup (that has been frustratingly vague in detail) just got a little bit more interesting….  In what appears to be a nod to the success of Marcus, Walmart has recruited Omer Ismail (the former head of Goldman Sachs’ consumer banking unit) and David Stark to lead the new fintech venture.

 

• Check out this financial literacy app called [Zogo]Zogo.  It is designed for the younger Gen Z crowd and provides financial education in a gaming type format.  You earn “pineapple points” as you successfully complete fun and intuitive quizzes and learning objectives.  You eventually redeem the reward points for actual $5 gift cards (or you can even donate to charity).  Amex announced this week that they are joining up with Zogo as well.  Pretty cool concept and definitely a worthy cause that Uncle Sean supports!!!  Side note - If you are “seasoned” like me and have a tendency to still think that all Millennials are 18 to 20 year old kids in college, here is a good “generational refresher” from our friends at Kasasa.  

 

• SEC chair nominee, Gary Gensler spoke towards promoting cryptocurrency technology while ensuring investor protections during his confirmation hearing this week before the Senate Banking Committee.  “It’s important for the SEC to provide guidance and clarity,” Gensler said. “Sometimes that’s a clarity that will be a thumbs up, but even if it’s thumbs down, it’s important to provide that.”  Yep – I’m pretty sure Ripple would agree with you! LOL

 

• CFPB nominee, Rohit Chopra took a firm stance during his Senate Banking Committee confirmation hearing pledging a strong hand on fair lending and mortgage servicing, stiffer penalties for fraud and misconduct, and a watchful eye on big tech.  Just in case you thought they were kidding, check out the CFPB’s ad seeking attorneys - WHEW!!!

 

• An exciting new industry group called the American Fintech Council (AFC) was formed this week per a merger between Marketplace Lending Association (MLA) and Online Lending Policy Institute (OLPI).  Phil Goldfelder (SVP, Public Affairs for Cross River and founding member of OLPI and friend of FedFis) explained as part of this [American%20Fin]press release, "responsible innovation and putting the interests of customers first are not mutually exclusive—you can do both, while ensuring an inclusive marketplace that benefits everyone. AFC will continue and expand on the mission of OLPI by working with policymakers, industry groups, consumer advocates, and civil rights organizations to foster dialogue that will curtail abusive lending practices and find avenues that help consumers continue to gain access to responsible credit. "  Attaboy Phil!!!!

 

• MoneyLion expands their digital platform “where Americans can easily bank, borrow, save and invest – all in one place” by acquiring Wealth Technologies, Inc. (WTI), an algorithmic financial planning technology firm.  MoneyLion will integrate WTI’s proprietary “fGPS® Financial Goals Positioning System” and provide advice via predictive analytics encompassing the members full picture of spending, credit, and investing by analyzing personal assets, liabilities, income, and expense.  Sounds cool!

 

• Plaid is launching Plaid Income, an income verification tool that is currently in beta, that allows lenders to “quickly and reliably retrieve a consumer’s permissioned income data straight from the source.”

 

• Mobility Capital Finance (MoCaFi) raised $12M Series A funding round.  [MoCaFI]MoCaFi is an African-American owned fintech company with a mobile banking app that also provides credit building / reporting (specifically rent payments through their Bill Pay feature) and financial coaching.

Sneak Peak - Stay tuned next week when FedFis is expected to release the long awaited Bank Core Processor Market Share report!!!!

Random Uncle Sean Stuff:

• The Law of Unintended Consequences…???  Over the last few years, Aunt Patty hasn’t been very happy about Uncle Sean getting on top of an 8’ ladder with a chainsaw, which I tend to do from time to time in order to prune random tree limbs.  Out of safety and concern for my well-being (as well as a few years of chewing me out and reminding me that I am no spring chicken), she finally convinced me to get a pole saw that can reach 12’.  WOW – you should see how high I can get now on top of that 8’ ladder with a 12’ pole saw!!!!.....  And that, my friends, is just another reason why women typically have a longer life expectancy than men.  LOL!!!!

 
Have a GREAT weekend and please stay safe!!!

Uncle Sean

Sometimes known as Sean Mayo – contact me directly for scope and pricing of custom reports / analysis projects at smayo@fedfis.com | 214-604-6961 – or you can contact FedFis Sales Team at 512-960-0911 | info@fedfis.com #FedFisHasTheData FedFis
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FedFis, LLC disclaimer – The views and opinions of Uncle Sean are of his own and may not necessarily represent the views, endorsements, and/or opinions of FedFis, LLC – we all know he’s a little bit different; but that’s why we love him.