Uncle Sean's Update - 9/17/21

Happy Friday!!!
 
Don’t forget to sign up here to have the Uncle Sean Update sent direct to your inbox each week.  While you are there, check out this fantastic interview with Steve Reich, Principal at Granite Creek Ventures.  Without further ado, here is the Uncle Sean Update for 9/17/21:

• I found this to be very interesting…  Square announced that Square Sellers will be able to accept payments through Cash App Pay.  I admit that I had to read through that a few times myself.  Another way to state this is consumers can use their Cash App account at participating Square Sellers for both online and in-person transactions.
  • Taking this a step further, this means that Square just completed a de facto closed-loop payment network outside of traditional payment rails (Visa, Mastercard, Discover, Amex) with money displaced from the traditional banking system (Cash App wallet)….  WOW, that made my head hurt!!!

 

• RiskScout announced they have partnered with Ncontracts to complement their BSA/AML “compliance products for financial institutions (FIs) seeking to bank emerging commercial markets while maintaining the required compliance.”

 

• MoneyLion adds crypto investing to their app just ahead of their 9/22 debut as a publicly traded company.

 

• Data Center Inc. (DCI) and Unifimoney partner together to offer DCI bank customers Unifimoney's wealth management platform through their online and mobile.  The platform includes “commission free trading of thousands of stocks and ETF’s, over 30 cryptocurrencies and precious metals including gold, silver and platinum.”  This is pretty cool if you are a community bank looking for a way to offer retail trading including cryptocurrencies to your customers.

                                                                                                                                                               

• Silicon Valley Bank partners with Plaid to offer clients ACH payment capability with Plaid’s instant authentication platform.  Basically, fintech companies can now easily authenticate with Plaid and pay with SVB in a simple one-stop solution.  The new solution links Plaid's instant account verification and SVB's ACH API capabilities; and also allows for “NACHA compliance fraud detection standards for WEB debits and data security, per the SVB press release. 

 

• SEC Chairman Gensler reiterates his stance on regulating the crypto asset market in testimony to Congress this week.  “Currently, we just don’t have enough investor protection in crypto finance, issuance, trading, or lending. Frankly, at this time, it’s more like the Wild West or the old world of “buyer beware” that existed before the securities laws were enacted. This asset class is rife with fraud, scams, and abuse in certain applications. We can do better.”  Here are a few more viewpoints that I found to be interesting:
  • The Block gives a little bit deeper dive in an interview with Gensler on custodial crypto lending and staking products 'take on all the indicia' of securities related to the congressional testimony.
  • Abra (crypto exchange platform) CEO, Bill Barhydt gives a really good interview on CNBC 'Power Lunch' (5 min video) promoting crypto and discusses SEC Chair Gary Gensler’s comments criticizing the crypto industry.  One key point is that Mr. Barhydt refers to Abra’s “high yield interest earning accounts” as being issued through a Trust Bank – but Kelly Evans (CNBC co-anchor of “Power Lunch”) mistakenly refers to this as “savings accounts” at 2:55.  To me, that’s where the increased regulation needs to start.  Too many ordinary consumers think these are FDIC insured savings accounts and they simply are not; and unfortunately, not all companies in the space are as transparent and forthcoming as Abra and Mr. Barhydt.

 

• Capital One is the latest big bank beta-testing a BNPL offering of their own.

 

• We saw some more interesting M&A activity this week:
  • Intuit announced an agreement to acquire Mailchimp for approximately $12B in cash and stock; and continues to build out their SMB focused platform (Credit Karma, Intuit Turbo Card, Money by QuickBooks, QuickBooks Cash, Mint, etc.).
  • Goldman Sachs agreed to buy Greensky (consumer finance loan platform) for $2.24B in stock to enhance their consumer offerings with Marcus.
    • Yes – I saw a ton of articles referring to the Greensky acquisition as a BNPL play.  Well that sure is a stretch….  I guess you could argue that ANY financing is a BNPL play by definition if it helps drive your SEO – sheesh!!!  Greensky is a merchant supported consumer loan origination and servicing platform for home improvement and healthcare (patient financing), not an online shopping cart BNPL checkout feature…..  C’mon man!!!
  • TransUnion acquires Neustar for $3.1B to increase their presence in the identity fraud marketplace.

 

• Congratulations to Excite Credit Union for achieving their long-awaited CDFI certification with assistance from CU Strategic Planning.

 

• Shout out to Digital Onboarding for receiving their SOC 2 Type 2 Certification – great job!!!!

 

• It was a very busy week for FinTech funding updates (follow the money):
  • Rumored for a few weeks now, Melio (business payments platform) announced that they raised $250M in Series D at a whopping $4B valuation – more than 3X increase in valuation from January.
  • BitSight (cybersecurity risk platform) raised $250M from Moody's.
  • Papaya Global (international payroll platform) raised $250M in Series D funding at a $3.7B valuation which is 10X increase over Sept 2020.
  • MaxReward raised $3M in Seed funding.
  • SpotOn (payments and software) raised $300M in Series E funding round and acquires Appetize (mobile commerce payments) for $415M.  This new round gives SpotOn a valuation of $3.15B – a 5X increase in valuation from their Series C this time last year; and almost 75% increase from their Series D in May (4 months ago). 
  • Ribbon (digital RE platform enabling cash offers) raised  $150M in capital consisting of $75M in Series C plus $75M in additional working capital.  Valuation was not disclosed, but the company referenced 15X growth rate this year.
  • Peach Finance (loan management, servicing, and compliance SaaS platform) raised $20M in Series A financing round.
  • VC firm, QED Investors raised $1.05B investment fund that includes $550M in QED’s Fund VII for early-stage fintech investing and an initial $500M for their new growth stage fund.
  • SellersFunding (SMB marketplace lender and payments platform) raised $166.5M capital in a combination of Series A and a credit facility (mix was not disclosed).
  • Persona (identity verification infrastructure) raised $150M in Series C funding with a valuation of $1.5B.  The SOC 2 Type 2 certified platform touts customers such as Square, Brex, BlockFI, Branch, Empower and many more.
  • Abra (crypto wealth management platform) raised $55M n Series C funding round.
  • And check out the funding emphasis on credit building platforms this week:
    • Sequin (credit builder) raised $5M in Seed funding to further market their credit builder platform designed for women.
    • Grow Credit (credit builder) raised $6.3M in equity financing plus another $100M debt facility for a total of $106.3M capital raise.
    • SelfFinancial (credit builder) raised $50M in Series E funding round.
    • TomoCredit (credit builder CC) raised $10M in Series A round.  TomoCredit (short for Tomorrow’s Credit) issues a Mastercard credit card issued by Community Federal Savings Bank (technically a charge card as balances cannot be carried over) with 7-day automatic pay schedule with zero fees and 0% APR.  With no credit pull and no fees, TomoCredit makes their money off of interchange.  The sustained on-time payments and low credit utilization builds your credit score over time with TomoCredit reporting to all 3 major credit bureaus.  Boasting 10X growth for 2021, TomoCredit has approved more than 300,000 customers and expects to issue a total of 500,000 cards by year end.

 
 
Random Uncle Sean Stuff:

• It was a crazy week of Birthdays here at FedFis - Patrick Rivenbark, Krissa Coffin, and Tanner Mayo all celebrated birthdays this week!!!  Pretty sure all are over 21 now….  😊  HAPPY BIRTHDAY!!!!!
• I have a 7’ cedar picnic table that I am going to try to sand and refinish this weekend.  I have all the supplies - new orbital sander, coarse and fine sanding disks, 2 gallons of spar urethane, mask, gloves, top of the line brushes, drop cloth, etc.  Which means I will probably end up tossing it all into the burn pile out of frustration and buying a new table Sunday evening…  That’s how a lot of Uncle Sean’s projects turn out – LOL!!!!  I sure hope Aunt Patty loves her new table!!!  
• Many people have asked me how I capture these Dad jokes every week.  The answer is simple, I keep a “dad-a-base” (LOL)….  And here are a few more to get your weekend started right:
  • The boss came by today and said “have a great day” – so I went home…
  • What is Forrest Gump’s password?  “1forrest1”…
  • What generation does Forrest Gump belong to?  “Gen A”…
    • ADMIT IT – you said that out loud didn’t you!!!!  HAHAHA – I did too!!!
  • And lastly, an entire generation will only know Billy Ray Cyrus for “Old Town Road.”  And that breaks my heart…. My achy breaky heart… 😀

 
 
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.