Uncle Sean's Update - 3/26/21

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.