Happy Friday!!!
 
Here is the Uncle Sean Update for 6/11/21:

• Even though credit card loan balances are down (as well as CC utilization rates and percent usage of available balance), we are seeing the nations largest CC issuers placing bets that this was a temporary Covid trend; and are pushing out promo’s as the economy reopens and consumers return to travel, leisure, and hospitality industries.  Here are some of the leading headlines from just this week:
  • Wells Fargo announcing the launch of their Active Cash credit card with 2% cash rewards including $0 annual fee and 0% intro for 15 months.
  • Citigroup fired back with the launch of their Custom Cash credit card with up to 5% cash back on eligible top-spend categories up to the first $500 each month, and 1% on all other purchases.  Also includes a $0 annual fee and 0% intro for 15 months.
  • Amex and Synchrony are among the bidders attempting to replace JPMorgan as the issuer of Amazon's co-branded credit card with a portfolio that is just north of $15B in loans.

 

• CNBC had a great interview (7 min video) with SEC Chair, Gary Gensler where he states that rules need to be updated for 2021 technology.  Specifically:
  • Digging into Payment for Order Flow (Robinhood was mentioned) and the meme stock frenzy (Reddit, Gamestop, and Robinhood were all specifically mentioned)
  • Gamification of trading – specifically via mobile apps (hmmm – who comes to mind here???  Thinking it starts with a Robin and ends with a Hood - LOL)
    • Oh – and somewhat coincidentally (yeah right), Robinhood has reportedly delayed their IPO again this week until sometime in July.  No press is bad press???  Well….

 

• El Salvador becomes the first country to adopt bitcoin as legal tender through a partnership with Strike (digital wallet company) to build out the digital infrastructure.  Keep in mind that El Salvador is the smallest country in Central America (smaller in size than Massachusetts) and has an annual GDP of $27B in 2019.  in context to US States, Vermont has the lowest annual GDP in the US for 2020 of $32.8B and California has about $3.1T GDP (as provided per Statista).  Nonetheless, this will be interesting to watch as El Salvador also has an enormous 70% unbanked adult population.

 

• Here cometh the Taxman….  The IRS is seeking a $32M budget for crypto tax enforcement with specific allocations of $3.34 million for IT specialists, $6 million for hardware and software, and $23 million for contractual services.  As part of the new plan, they are seeking the services of external experts in the field of blockchain, cryptocurrencies, and cybercrime; and plans to build an internal dashboard for cryptocurrency and blockchain analytics called STRIKES.

 

• Check out the Mass Fintech Hub launched by the Massachusetts Fintech Working Group and operated by FinTech Sandbox.  Mass Fintech Hub is a public-private partnership “dedicated to making the Commonwealth a global leader in Fintech” -  Crowdfund Insider has a good writeup here.

 

• Dave is the latest fintech to go public via SPAC merger with VPC Impact Acquisition Holdings III, Inc. at a $4B valuation that includes approximately $375M in cash.  Check out the Investor Deck showing 2020 revenue of only $122M, but a forecasted 95% CAGR through 2023 – DANG that’s stout!!!!  Also reflected is incredible customer growth in the Dave Banking platform from 633K at Dec 2020 to 1.3M customers at May 2021.

 

• Marqeta (Nasdaq: MQ) began trading this week.  The IPO was priced at $27 late Tuesday (raising $1.2B), well above the $20 - $24 expected range per the S-1, before opening at $32.50 on Wednesday and closing at 30.52 creating a market cap in excess of $17B in their debut.  It’s nice to see an IPO finally priced correctly.  CNBC has a good video interview (5 min) with Marqeta CEO Jason Gardner on going public.

 

• Here is another cool fintech – take a look at newly launched Save and their Save Debit Invest Card (SIPC spin on debit rewards).  They match your spend dollar for dollar in a portfolio that aligns with your investment profile (stocks, bonds, or other assets).  Customers don't keep the investments, but they do keep all the returns (minus the Save investment advisory fee of 0.59%) in the form of debit rewards.  Returns are not guaranteed of course, but currently stating 2.99% average return (hypothetical back-tested returns from 2006) which beats any other debit or credit rewards platform.  They also announced this week that they have made the first matching investments on behalf of customers debit card spend. 

 

• And the funding keeps pouring in:
  • Reported as rumor two weeks ago, Klarna has officially raised $639M in equity funding from SoftBank giving them a “Holy $hit” valuation of $45.6B.  Whoo-Ahh!!!!  This makes them the largest fintech (by valuation) in all of Europe and the second in the entire World (behind Stripe).  Klarna posted record annual revenue of $1.2 billion (USD) in 2020. However, losses also climbed 50% to about $109.2 million (USD) due to increased costs associated with its international expansion.  Klarna’s 1Q21 Investor Deck states over 90 million global active users and 2 million transactions a day.  US customer growth has more than doubled YoY to 17M in April 2021.
    • (asking for a friend) So what kind of mythical creature is a 45X Unicorn valuation…????  Is it a Supercorn?  A Godzillacorn?  Maybe a Jurassicorn?  A Googleplexacornicus?  Okay – I’ll stop now…. 😊   
  • Bench (SMB bookkeeping service) raised $60M in Series C funding round and launches Bench Banking with LendingClub Bank.
  • Trulioo (global online identity verification) raised $394M in Series D funding round with a valuation of $1.75B.
  • Airbase (corporate spend mgmt platform) raised $60M in Series B funding with a valuation of $600M.  Airbase is an interesting fintech to me.  They have a corporate card, bill pay, and accounting integration platform that has real-time reporting.  When I hear the term “corporate card”, my brain always reverts to either a business credit card or a business charge card (either way, it is on the credit / lending side of banking).  However, the Airbase Visa is actually a prepaid debit GPR platform issued by Sutton Bank.  Slick!!!
  • Kafene (BNPL targeting subprime market) raised $14M in Series A funding.  In March 2021, Kafene was handling about $2M per month in merchandise volume.  The company plans to use the new funding to “scale its existing lease-to-own financing business nationally, as well as to launch a direct-to-consumer virtual lease card.”
  • Clair (EWA / instant pay platform for full-time employees and gig workers) raised $15M in Series A funding round.  Valuation was not disclosed, but this Series A brings their total funding to date to $19.5M ($4.5M seed round last October). 
  • Blooma (CRE digital underwriting platform) raised $15M in Series A funding round.  Per the press release, lenders on the Blooma platform “have reduced loan origination time by up to 75%, enabled 50% more transactions and achieved 4x reductions in origination and servicing costs. To date, the platform has analyzed over $12 billion in deals in the last 12 months and serves multiple commercial banks, private banks and brokers.”  Pretty cool!!!
  • Credit Sesame (PFM and credit builder app) raised $51M in growth capital as their Sesame Cash debit account surpasses 1M customers in less than a year from beta.

 
 
Random Uncle Sean Stuff:

• Holy Cow – It’s HOT here in the Texas Hill Country!!!  I see a San Marcos River tubing trip in the near future (with a subsequent obligatory visit to Herbert’s Taco Hut of course)!  Ahhhh, just thinking of it makes Uncle Sean happy.
• Due to popular demand - Dad Jokes are back:
  • The first 5 days after the weekend are always the hardest.
  • Why is it so difficult to eat a clock?  Because it’s time consuming….
  • Aunt Patty asked me why there was a pile of clothes in the floor next to the laundry basket….  Apparently, “I struck down a Jedi” was not a good answer.
  • I watched a documentary about hydroelectricity last night….  Best Dam movie I’ve seen in a while….  It was Shocking….  It’s a Current documentary….  It Generated a lot of interest…
  • When I was young I was poor, but after decades of hard work, I am no longer young.
  • It was a sad and disappointing day when I discovered my Universal Remote Control did not, in fact, control the universe….  Not even remotely.
  • I got laser eye surgery about a month ago but I still can’t shoot lasers out of my eyes.  Am I doing it wrong or should I ask for a refund?
  • And last but not least…..  What do attorneys wear to work?  Law suits!

 
 
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!!!!
 
It was a short but busy Holiday week; and we all had to cram a full work week into just a few days - LOL!!!!  Here is the Uncle Sean Update for 6/4/21:
 

• Overdraft fees have been taking center stage lately with many neo / challenger banks offering a “no fee” structure for overdrafts – not to mention the increased pressure from Capitol Hill (those hearings have been entertaining, if nothing else).  Many banks, in general, are taking notice and making changes in response to customer retention concerns – but the truth is that many of the largest banks have had no-overdraft programs for years (although several have a minimal monthly fee structure). 
  • Ally Bank  becomes the latest to cut all overdraft fees for their 3.6M accounts – which is impressive.  To their credit, Ally had waived overdraft fees between March and July last year during the peak of the pandemic unemployment impact.  They do not expect the fee waiver to be material to the income statement.
  • Huntington Bank is taking a slightly different approach by launching Standby Cash which is a line of credit giving eligible customers immediate access up to $1,000 with no interest or fees if customers sign up for automatic payments (otherwise, a 1% monthly interest charge, 12% APR, applies to outstanding balances).  Huntington estimates that this program may cost the bank up to $1M per month but will certainly create customer loyalty and potentially bring in new customers.
  • Back in April, PNC Bank announced “Low Cash Mode” which alerts customer through the mobile app and grants a 24 hour waiver for fees.  Initial pilot programs have shown a 60% discount on consumer overdraft fees.
  • Frost Bank also launched an overdraft grace feature up to $100 in April.
  • To be completely fair, many banks have had specific programs for years – Wells Fargo has Clear Access Banking, Fifth Third has Express Banking, Bank of America has Advantage SafeBalance Banking, Citi has Access Account Banking, and even JP Morgan Chase (Senator Elizabeth Warren’s favorite bank – LMAO) has Chase Secure.

 

• I know you probably saw it, but here’s a short update on legal happenings related to the OCC Fintech Charter….  Nothing really happened – again - LOL….  All kidding aside, here are a few non-impressive updates in case you are having trouble falling asleep (punchline is that the fight continues):
  • The three judges in the 2nd U.S. Circuit Court of Appeals reversed the 2019 lower court victory where New York Department of Financial Services argued (successfully at that time) that the OCC lacked the authority to issue such a charter. 
    • It’s the same premise that we have heard several times on this topic.  Since no such “fintech charter” has been granted by the OCC, and the NYDFS failed to prove that any harm has come to NYDFS, then there is no basis for the original 2019 ruling in favor of NYDFS.  Here is the appellate court 43 page ruling if you really want to get weird.
  • Also, as expected, the CSBS issued a statement stating that specific ruling was disappointing, and they are confident that the CSBS litigation pending in the DC District Court will determine that Congress has not given the OCC the authority to issue a national fintech charter.  The CSBS also encouraged “the OCC to abandon its pursuit of the chartering of uninsured national banks.”

 

• SoFi began trading this week (Nasdaq: SOFI).  SoFi said in a statement that it raised about $2.4B from the transaction to fuel growth, expand its markets and develop new products.

 

• It’s a date!!!  Marqeta filed a second amended S-1 earlier this week and will commence trading on June 9 according to the Nasdaq IPO schedule under the symbol MQ.  Shares are to be priced in the $20 - $24 range and values MQ at approximately $12B+.

 

• Mission Lane (credit builder fintech) acquired Honeydue – terms were not disclosed.  This is pretty cool as Mission Lane (the old credit card division spinoff from LendUp) helps consumers rebuild credit with their Visa credit card offerings.  Now with the acquisition of Honeydue (PFM App for couples) that provides a Visa prepaid GPR debit card, Mission Lane becomes a full Neo / Challenger Bank and avoids the dreaded “single source revenue model”.

 

• The Venture Center and FIS announce the ten growth stage companies to take part in the 2021 FIS Fintech Accelerator program.  They include: Array, Atomic, Bankifi, BankLabs, Informed.IQ, Long Game, OakNorth, Railz, TaxStatus, and Vymo.

 

• Kraken (cryptocurrency exchange) announced the launch of their mobile app designed for beginners to get into the buying and selling of 50+ cryptocurrencies 24/7/365 for U.S. customers in preset denominations ($20, $50, $100) or any custom amount.  The press release also mentioned that Bitcoin can be purchased for as little as $10.  The service is not available to New York or Washington state residents because of the "cost of maintaining regulatory compliance."  PaymentsDive has a good write-up here.

 

• Sezzle (BNPL) inks a 3-year contract with Target.  Sezzle’s interest-free installment (BNPL) product “will be used in-store and across Target’s digital platforms, providing guests access to interest-free payment plans for purchases made at Target.”

 

• ENACOMM and REDi are partnering together - ENACOMM will provide communication channels for REDi's alerts to all of its customers’ users, and ENACOMM will integrate REDi’s fraud prevention technologies into ENACOMM’s ViA® and Fraud Control Module offerings.  REDi will also provide ENACOMM its APIs to enable ENACOMM to package and resell REDi’s debit, fraud and card control solutions as part of ENACOMM’s product suite spanning the voice, mobile, and digital channels.

 

• And the FinTech funding continues:
  • Circle (crypto-services firm) raised a massive $440M in financing.  Valuation was not disclosed, but Circle said the funds will be used to drive market expansion and growth.  The stablecoin has become the world's fastest growing dollar digital currency, now standing at $22 billion in circulation. USDC has grown by 436% in 2021 alone, and over 28,000% over the past 12 months.
  • Truebill raised $45M in Series D funding round bringing the total valuation to $500M.  This Crunchbase article states that since November, Truebill has grown at a rate of 3.5X YoY Revenue; and their “active user base grew from 1 million to 2 million and is now analyzing more than 200 million monthly transactions for more than $40 billion in monthly transaction volume.”  Their last $17M Series C was just six months ago; and brings their total funding to $85M.
  • MotoRefi (auto loan refinancing platform) raised $45M in Series B funding round.  Valuation was not disclosed, but the company states 7x revenue and 5x volume growth YoY for 1Q21 and is on track to issue $1B in loans by the end of the year. 
  • Yieldstreet (alt investment platform) raised $100M in Series C and is on track to hit $100M in revenue for 2021.
  • Synctera raised $33M in Series A funding round and plans to use the funds to accelerate their Banking-as-a-Service platform.
  • Pinwheel (payroll API for direct deposit and VOE) raised $20M in Series A.

 
 
Random Uncle Sean Stuff:

• It is starting to feel a little more like “normal” again as we begin to evaluate our post-pandemic world.  Folks are traveling, going to conferences, and meeting in person with friends and family after a long, long 15 months of social distancing and isolation.  Me and Aunt Patty got to spend a few days with her family this past weekend; and were able to spend time, laugh, and hug friends and relatives that we haven’t seen in over a year.  It was nice.
• Ahhhh – here are some “clothes dryer diaries” for you….  So our dryer died (of course with wet clothes in it)….  Me and Aunt Patty did some quick internet research and decided to bite the bullet and get a new one.  We went to a large home improvement retailer that shall remain anonymous (but I can tell you that their colors are orange and white, and their initials are H.D.).  We settled on our new dryer and with that old familiar feeling of being proud parents of a major shiny new appliance, went to see the associate to complete our purchase.  To our complete dismay, we were informed that they do not stock appliances (except for a few “really cheap ones” – that is literally what she said) and it would take 4 – 6 weeks to get one delivered to us.  What???  We called two other locations of the same retailer and they all three told me the same thing – they don’t stock major appliances.  HOLY CRAP!!!!  What are you supposed to do when the dryer goes out???  Wait 4 – 6 weeks???  Does anyone really forecast 4 – 6 weeks in advance of a dryer failure???  LORDY LORD!!!!  Nice supply chain / product management (sarcasm)…  Maybe this is just a temporary thing due to Covid (I still really like that store by the way)???  So I did what any other prudent adult would do (not that I am prudent per se, but I do pretend to be sometimes)…  We went to another large home improvement retailer that shall remain anonymous (but I will tell you that their colors are blue and white, and their initials are L.o.w.e.’s) and found the exact same dryer (they had several in stock), purchased immediately, and they are delivering for free in three days.  Shocking that local product availability still matters in a digital world (yes – more sarcasm) – 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 Friday!!!!
 
Happy Memorial Day Weekend and congratulations to all the graduates as we also celebrate Graduation Weekend!!!  Here is the Uncle Sean Update for 5/28/21:
 

• Yep, I’m sure you heard about it…..  Although originated by Bloomberg, pretty much every major news outlet covered the “007’ish clandestine” rumors related to hidden code within Square’s app detailing plans for checking and savings accounts (this is Uncle Sean yawning)……..  Hey – did everyone forget that SQUARE FINANCIAL SERVICES IS A CHARTERED BANK now????  Of course they will offer banking products and services - C’MON MAN!!!!!!  LOL!   My only question is why in the heck has it taken a year since the charter was granted?

 

• HSBC (the 15th largest bank in the US per asset size of $195B as of 3/31/21) is exiting US retail banking to focus on international banking and wealth management.  The press release stated that they will sell 90 branches out of 148 retail focused branches, HSBUS will retain about 20-25 and repurpose into international wealth centers, 35-40 will be closed.  As part of the retail branch divestiture (pending regulatory approval; financial data as of 3/31/21):
  • Citizens Bank is purchasing East Coast retail and online bank portfolio including 80 branches, 800,000 customer relationships, $9.2B in deposits, and $2.2B in loans.
  • Cathay Bank is purchasing West Coast retail business including 10 branches, 50,000 customer relationships, $1B in deposits, and $800K in loans.

 

• It certainly took long enough, but Joan Brown (80) was sentenced to three years and eight months in prison, five years of supervised release, and ordered to pay $1,016,900 in restitution by United States District Judge Joshua Wolson for her scheme to embezzle credit union funds for which she provided management services through a company which she co-founded (Service Center for Credit Unions).  Joan had previously pled guilty in Sept 2020 to 6 counts of embezzlement of credit union funds and 11 counts of making false entries in credit union records arising from her embezzlement of more than $1 million over several years from six small credit unions that resulted in these CUs failure and liquidation by the NCUA – all of which were liquidated on 4/5/2016.  If you want to geek out even more, you can read up on the NCUA OIG Material Loss Review report issued 2/23/17 that specifically details the fraud.

 

• CNBC published their 2021 Top 50 Disrupter List.  No surprise that FinTech dominates 5 of the top 10 with the likes of Robinhood, Stripe, Brex, Marqeta, and Chime.

 

• Another CU acquisition of a bank (err – 2 banks actually, bringing the total YTD to 4).  GreenState CU (charter 60269; $7.5B in Total Assets as of 3/31/21) in North Liberty, IA announced two bank acquisitions this week – Premier Bank (FDIC 12493; $383M in Total Assets as of 3/31/21) in Omaha, NE and Oxford Bank & Trust (FDIC 9260; $759M in Total Assets as of 3/31/21) in Oak Brook, IL.  GreenState CU is no stranger to bank acquisitions as they acquired 7 branch locations from First American Bank in Iowa back in 2019 which drew the ire of the Iowa Division of Banking, but was ultimately settled.

 

• Blue Ridge Bank, NA (NYSE: BRBS) sure grabbed my attention a lot this week!!!  First as the Sponsor Bank for Aeldra (neo immigrant bank);  Second - I learned that they recently became the new sponsor bank for Bridge (PFM Mobile App) as Bridge also moved from Mastercard to Visa Debit Card; and Third – in less than 4 months after completing the acquisition of Virginia Commonwealth Bank, the systems were consolidated and the new Blue Ridge Bank signs went up (congrats). 
  • Recall back in Feb. where we mentioned that Blue Ridge Bank was the first commercial bank to service both cash and Bitcoin through 19 of their ATM’s via partnerships with  BluePoint ATM Solutions and LibertyX.
  • Cutting edge tech, sponsor bank to fintech companies, AND an acquisitive bank….  You bet that Uncle Sean will be following Blue Ridge Bank!!!

 

• Atomic (payroll API for direct deposit acquisition) partners with Welcome Tech to “enable direct deposits for the nearly 3 million account holders and 9 million community members of Welcome Tech, many of whom will gain access to bank accounts for the first time.”  Recall about a month ago, we talked about Welcome Tech raising $35M in Series B and serving the Hispanic immigrant community through their PODERcard and Saber es Poder (knowledge is power) platform.   Atomic is another great fintech with a single API to enable direct deposit that covers “over 165 unique payroll connections” and  “approximately 65% of the U.S. workforce with a combined reach of 95 million workers.”  It’s nice to see these firms partner together.

 

• Acorns (wealth mgmt investing app) is going public via SPAC merger with Pioneer Merger Corp.  The transaction values Acorns at approximately $2.2B and will trade on the Nasdaq under the symbol OAKS once the deal closes (expected later this year).  Check out the Investor Deck where Acorns discloses 4M US subscribers and plans to grow to 10M by 2025, but is only expecting $126M top line revenue estimate for 2021 while 2019 and 2020 actual revenue was $44M and $71M respectively (yep - that’s another stratosphere multiple).

 

• In case you are keeping score, Robinhood lost their bid to block the Massachusetts state regulators' case against them.

 

• And more FinTech funding updates:
  • Stavvy (digital closing platform in the mortgage and loan servicing space) raised $40M+ in Series A funding round.  Valuation was not disclosed.  Funding to be used to fund the company’s aggressive hiring initiative (headcount grew over 400% last year).
  • Snapdocs (another digital closing platform in the mortgage space – seeing a trend yet?) raised $150M in Series D funding round bringing total funding to $260M and a valuation in excess of $1.5B.
  • Resolve (spinoff from Affirm) raises $60M.  The article refers to Resolve as a B2B Buy Now Pay Later (BNPL) platform.  Not to belittle Resolve or their capital raise (which is very cool and impressive) – but isn’t “B2B BNPL” just a Factored Supply Chain Finance solution where the invoicing business gets paid quickly (i.e. factoring – for a fee of course) and the purchasing business is granted extended payment terms (i.e. supply chain finance)?  I guess “B2B BNPL” just sounds a little more hip!!!   
  • Tilled (start-up payments facilitator “PayFac-as-a-Service”) raised $11M in Series A funding round.  Valuation was not disclosed, but Tilled plans to use the funding to grow from 15 employees to 50 by the end of the year.
  • SpotOn (SMB cloud-based integrated platform for POS, payments, brand building, data analytics, etc.) raised $125M in Series D funding launching them to a$1.875B valuation.   
  • Zeta raised $250M in Series C with a valuation of $1.45B.
  • Forter (e-commerce fraud prevention) raises $300M in Series F funding for a $3B valuation.

 

• And lastly – Uncle Sean almost always refrains from commenting on rumors until they become fact…..  But…..  CNBC is reporting that Klarna is close to finalizing another funding round valuing the BNPL firm just north of $40B led by SoftBank - CHA-CHING!!!!  The exact amount of the funding round was not disclosed, but estimated to be less than the $1B that was raised just two months ago in March (that round valued Klarna at $31B). 

 
 
Random Uncle Sean Stuff:

• Phil Mickelson becomes the oldest major champion ever, at the age of 50, after winning the 2021 PGA Championship in spite of the 200-1 odds against him.  I’m not really a golf fanatic, but this is a very cool story.  CBS Sports has a good write-up here.

• Only 92 more days until college football!!!!  WOOHOOO!!!!!!
• Congratulations to our son Parker as he graduates high school this weekend.  Mom and Dad are proud of you young man!!!!  There is a slight chance of rain (outdoor venue), but a 100% chance of some Momma tears from Aunt Patty.

 
 
Have a GREAT Memorial Day 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!!!!
 
What a crazy week it was - here is the Uncle Sean Update for 5/21/21:
 

• It was a rough week in the cryptocurrency markets.  Extreme volatility was enough to make a seasoned merchant marine seasick – LOL!!  Many crypto supporters have stated that a correction was overdue and that the subsequent rebound from the lows (BTC-USD was down 31% and ETH-USD was down 43% intraday at one point) was proof of the staying power of crypto.  Federal Reserve Chairman Powell wasn’t impressed and noted that the volatility tied to cryptocurrencies has prevented them, to date, “as a convenient way to make payments” (not to be confused with a US CBDC stablecoin which the Fed will be releasing a report on later this summer).  The selloff did not appear to be linked to a single cause, but rather a culmination of events (yep – a rough week indeed):
  • Tesla no longer accepts bitcoin as payment citing ESG / cost of mining concerns from Elon Musk.
  • China bans financial institutions and payment companies from providing services related to cryptocurrency transactions, and warned investors against speculative crypto trading.
  • SEC Chair Gary Gensler recommending more regulation surrounding crypto currency marketing, issuance of crypto tokens, and cryptocurrency exchanges.
  • U.S. Treasury calls for stricter cryptocurrency compliance with IRS and will require any transfer worth $10,000 or more to be reported to the IRS citing tax evasion risk.
  • Not to mention the DarkSide $4.4M ransomware attack on Colonial Pipeline that was paid in bitcoin rehashing old fears of cryptocurrencies being a “pirate exchange” (via anonymity).

 

• As expected, Marqeta filed their S-1 Registration Statement late last Friday.  Private market valuation reported by CNBC tops $16B.  Key points from the S-1 include $350M annualized run rate in 4Q20; actual was $290M net revenue for 2020 with 41% gross margins and a net loss of $47.7M.  One item specifically caught my eye – on page 24 of the S-1 under Risk Factors, Marqeta states that Square accounted for 60% of 2019 net revenue, 70% for 2020, and 73% for 1Q2021 revenue…  WOWZA!!!!!  They better keep Square happy as that is some serious concentration risk and one hell of a valuation multiple on revenue (46x)!

 

• Now this should make the Zelle fans happy - LOL…..  BuzzFeed announced that they found Joe Biden's secret Venmo account after less than 10 minutes of looking for it, along with nearly a dozen Biden family members (including grandchildren), senior White House officials, and all of their contacts.  BuzzFeed did contact the White House and all of the accounts were removed without identifying any usernames (thankfully).  The article went on to state that “privacy advocates and journalists have warned about Venmo’s privacy problems for years, yet the PayPal-owned app has persisted with features that can place people — including the president of the United States — at risk.”  Now THAT is a PR nightmare!!!!

 

• PNC gained regulatory approval for their acquisition of BBVA and expects the $11.6B merger to close on June 1.

 

• Serial acquirer, Glacier Bancorp, Inc. (Nasdaq: GBCI) to acquire Altabancorp (Nasdaq: ALTA) in an all stock transaction valued at $933M.  At first glance this deal looks to be very expensive at 290% P/TBV, but a deeper look into the Investor Deck shows that this was only a 15% premium to ALTA share price; the deal is immediately accretive to GBCI (no TBV payback period); and enhances the Glacier footprint in rapidly growing Utah.  Additionally, both banks are running Jack Henry Core (a look into the FedFis Fintegration Ecosystem© confirms they are both on JH Silverlake for Core and JH NetTeller for Online) so tech integration costs will be minimal. 

 

• Bank of America will raise their US minimum hourly wage to $25 by 2025 and requires all its US vendors to pay $15 per hour or more.  This move comes after BOA raised their minimum wage to $20 just last March.
  • CFO Dive has a really good article regarding labor shortages and wage inflation.

 

• Meanwhile, there is no shortage of FinTech funding (particularly BNPL as of late); and no signs of it slowing down:
  • Sunbit becomes the latest unicorn in the BNPL pace with their $130M Series D funding round with a valuation of $1.1B.
  • Amount (BNPL) is back in the news with a $99M Series D funding round with a 50% valuation increase since their Series C launching them to the coveted Unicorn valuation status of $1B.  Recall about three weeks ago where we talked about Barclays US partners with Amount to offer BNPL feature.
  • Figure Technologies raises $200M in Series D with a valuation of $3.2B. 
  • DailyPay (on demand EWA platform) raises $500M in new capital including a $175M Series D round plus $375M in credit capital. 
  • Privacy.com (physical and virtual card issuing platform) rebrands to Lithic and raised $43B in Series B funding round.

 

• And more BNPL - Ally Lending moves into BNPL / point-of-sale financing with Sezzle.  The first integration of its type for Sezzle - select shoppers can now choose to pay over time using Ally's longer-term, fixed-rate installment loans or Sezzle's BNPL offering.  Ally's financing extends to purchases up to $40,000 with 3-60-month terms.

 

• Wise (fka TransferWise) joins Temenos MarketPlace to enable Temenos customers to use Wise international transfer platform.

 
 
Random Uncle Sean Stuff:

• Tim Tebow signed a one-year $920,000 contract with the Jacksonville Jaguars this week to try to make the NFL roster as a tight end instead of a quarterback…..  I’m still waiting on the Minnesota Vikings to contact me about replacing Brett Favre due to his retirement back in 2010.  I pretty much have all of my eggs in that basket – LOL!!!!!
• And a few quick Dad Jokes due to popular demand:
  • It rained so much in Texas this week – I was going to flag Noah down for a ride but he had already left town!!!
  • If April showers bring May flowers, then what do May flowers bring…???  Pilgrims, of course!
  • Aunt Patty and I wanted to cook some alligator tail this weekend, but we don’t have a “croc” pot….  LOL!!!!!!
  • If the Terminator retires, is he then known as The Exterminator?
  • There’s an email going around about processed pork, gelatin, and salt in a can.  If you get it, don’t open it – it’s spam…….
  • Studies have shown that humans eat more bananas than monkeys…  Must be true because I’ve never eaten a monkey in my entire life!
  • And here is one more for our very own FedFis VP of Relationship Management, Mr. Dan Heilveil -  Do they allow loud laughing in Hawaii, or just “a low ha”????

 
 
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!!!!
 
Our MO is simple - Fintech, Banking, Data…  Oh and surveys are B.S. - LOL!!!  Here is the Uncle Sean Update for 5/14/21:
 

• Brex is the latest to add a crypto rewards program (Bitcoin and Ethereum), but claims to be the first for small business credit cards via TravelBank through their partnership with Coinbase.  This is pretty cool if you are a small business and looking to “dip a toe into crypto” (which is fun to say out loud - sorry, I just couldn’t help myself - LOL).  This comes just a few weeks after we covered the SoFi consumer credit card with crypto rewards; Unifimoney Premier consumer credit card with rewards in Bitcoin, Gold, and Equity; and the Gemini consumer credit card through Mastercard and WebBank with real-time rewards in over 30 cryptocurrencies on the Gemini platform.  Yep – I would say it is starting to catch on….

 

• Google Pay enables international transfers by partnering with Western Union and Wise (fka TransferWise). 

 

• ENACOMM is making headlines over the last few weeks.  First they announce an agreement with Data Center Inc. (DCI) to provide API connectivity between Data Center Inc.’s (DCI’s) iCoreGO online and mobile solutions and any other core processor to allow FI’s to adopt a wider range of applications; and this week they are at it again announcing the ENACOMM Financial Suite (EFS) with intelligent IVR application (including fraud and analytics tools) is available for purchase through Finastra's FusionStore.

 

• Atmos is looking to add Florida de novo Climate First Bank as a second sponsor bank (currently using Evolve Bank & Trust) to more closely align with their green mission.  Pretty cool that Climate First Bank is already a Sponsor Bank and they haven’t even opened their doors yet (charter was approved in March and they are set to open next month).  

 

• BNPL for air travel appears to be the new rage as we exit the pandemic.  Earlier this month we saw Southwest Airlines get into it with their “Fly Now Pay Later” BNPL solution provided by Uplift.  Now, American Express has expanded their existing “Plan It” BNPL feature for flights booked on the American Express Travel Website as a POS solution.  However, AMEX customers that book flights on other travel sites will still need to log onto AMEX to switch to an installment plan after their purchase.  

 

• And more BNPL - PayPal announced an agreement to acquire Happy Returns.  This is another merger that makes good logical sense as BNPL play (PayPal pay in 4) acquiring a reverse logistics platform for enhanced integration in the supply chain (whew – that was a ton of “word salad” right there).  TechCrunch has a good writeup here.  Recall a few weeks ago where we discussed Affirm to acquire Returnly under a similar model (i.e. make the returns of online purchases easy so the consumer will buy more and more often) – I suspect we will see more of these deals in the near future….  All the cool kids are doing it - LOL!!!

 

• JP Morgan, Wells Fargo, US Bank, and about 7 other banks have signed up for a government-backed pilot program to potentially issue credit cards to adults without credit scores using data like checking and savings account balances.  I admit it - at first I wasn’t all that impressed until I read that “approximately 53 million U.S. adults don’t have credit scores, according to Fair Isaac Corp.  These underserved adults usually have to turn to expensive payday loans or other alternative measures.” 

 

• Better (online home ownership platform) to go public via SPAC merger with Aurora Acquisition Corp (Nasdaq: AURC) in a transaction valued at $7.7B.  Check out the very well done Better Investor Deck for more detail related to growth, proprietary platform (Tinman), holistic approach (realtor, mortgage, title, insurance, services, etc.), and incredible efficient operations and closing speed.

 

• Repay to acquire BillingTree for $503M.

 

• Green Dot to acquire Republic Bank & Trust's Tax Refund Solutions Business for $165M.

 

• BaaS provider Treasury Prime raises $20M in Series B funding round.  Valuation was not disclosed, but the company said they have experienced dramatic growth over the last twelve months; and the new capital will be used to “accelerate go-to-market programs and to expand the company’s sales, marketing, and engineering teams.”

 

• Lili (a Neo / Challenger Bank for the freelance market) raised $55M in Series B funding round.  Valuation was not disclosed, but Lili has now raised $80M and customer count exceeds 200,000 since their launch in January 2020.

 

• Relay (Small Business Neo / Challenger Bank) raises $15M in Series A funding round.

 

• FDIC appoints Ms. Zunera Mazhar as Deputy Director of the FDIC’s Office of Innovation, FDiTech.  Ms. Mazhar will guide the agency’s work to promote the adoption of innovative technologies within the FDIC and across the financial services sector.

 

• The US Senate has voted to overturn the OCC "true lender" law in a 52-47 vote; and now heads to the House where it is expected to pass as well.  There are strong arguments on both sides of this topic.  I am guessing that we haven’t heard the last of this and that some level of national regulation will need to be clarified.

 

• The FDIC released the 2021 Risk Review Report that covers the full effect of the pandemic on US banking.  This is a long read (88 pages took me about 2 hours to fully read), but it is very good.  I am also happy that is covers up through Jan 2021 as opposed to other FDIC reports that come out about a year or two after the fact when the event is no longer relevant (SMH)…..  Thankfully, each section has summary points at the beginning so you can peruse through quickly if you need to; and the graphs are very well done too.

 

• If y’all are at the AFT 2021 Spring Summit in Florida, keep an eye out for Tanner Mayo and Dave Mayo – the original FinTech Cowboys!!!  And if they are wearing shorts and cowboy hats in public, please post pics all over the internet – LOL!!!!!

 
 
Random Uncle Sean Stuff:

• In case you missed it, here is the Elon Musk SNL Intro with his Mom (5 minutes) as well as the infamous WTH is Dogecoin skit (2 minutes).  I was surprised at how funny this actually turned out to be.
• The Go-Go's were FINALLY inducted into the Rock & Roll Hall of Fame this week!!!!  This Rolling Stone interview is a good read and the LA Times has a good write-up as well.  Congrats to the OG all-girl punk band out of LA!!!!
• If you are ever in Dripping Springs, TX – do yourself a favor and stop by Flores Mexican Restaurant and try the Sangria Margarita and the appetizer sampler plate.  Uncle Sean and Aunt Patty give it two thumbs up as a winning combination (especially if you have more than one of those sangria margaritas – WhoooAhhhh)!

 
 
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!!!
 
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.
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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.
​