Uncle Sean's Update - January 29, 2021

Happy Friday!!!!
 
WOW, what an exciting week this was! So let’s get to it!
 

• Reddit creates “Woodstock moment” as a new breed of retail investors armed with stimulus checks and connected through social media via wallstreetbets seek to “stick it to the man” – and have largely succeeded in crippling some of the biggest Wall Street hedge funds by targeting heavily shorted stocks.  Peace, Love, and Investing – yeah baby (channeling my inner Austin Powers).
• Robinhood once again finds itself in the middle of controversy when they decided to suspend trading activity on GameStop (and others) from retail investors (see Reddit wallstreetbets platform mentioned above) initiating a short-squeeze, but allowing hedge funds to continue to make trades.  This gets really messy when you see how Robinhood makes money running a free trading platform (by charging market makers for order flow on the back-end).  Citadel is one of the biggest market makers in the US and is already distancing themselves from Broker’s decision to stop retail trading.  But wait – this train wreck gets even better!!!  The SEC issued a public statement saying they were “closely monitoring” (not really what you want to hear) the extreme trading events of the last several days; and working with other regulatory agencies to “protect investors and to identify potential wrongdoing”.  And of course, here come the customer lawsuits.  So much for Robinhood's Mission Statement, “to democratize finance for all” – OUCH!!!!  Someone needs to get them a new PR & Communications Team!!!
• It’s Fed Week!  I geek out a little too much each time the Federal Reserve meets to discuss monetary policy.  Nothing new - keeping interest rates at zero until after the cows come home; and continue purchasing bonds (Treasury securities and MBS) to the tune of $120B per month.  Pretty soon that will add up to some real money.  Here is the full FOMC Statement and includes a link to the implementation notice.  CNBC has a pretty good write-up as well.
• Although Finn was short lived in the US, JP Morgan Chase is at it again – this time rolling out a digital retail bank in the UK.  Hopefully they will not make the same Finn mistakes – here’s a little bit of history…   Finn was built on top of the same back-end infrastructure as Chase’s conventional mobile app (error #1), so it even looked the same with no real differentiating factors between Finn and Chase’s mobile banking app (error #2).  Chase also rolled out an online only account opening process (NAO) that was very similar to Finn's onboarding process (error #3), making Finn irrelevant for customers who couldn't visit branches to open an account.  Undoubtedly resulting in cannibalization of existing accounts from Chase to Finn as opposed to net new accounts.  Do you think Chase will name the new UK direct bank “Finnless”???  LOL!!!
• Speaking of Direct Bank  / Digital Brands….  I was doing some research and reading up on Goldman Sachs earnings and when I stumbled upon some Marcus data – check out page 8 of the GS strategic update.  Marcus now has almost $100 Billion (yes, Billion with a B) in deposits at the end of 2020 – WHOA!!!
• New fintech startup Greenwood announced they signed up 500K users in the first 100 days since opening their wait list in October.  Greenwood expects to officially launch in May or June of this year and is aiming to serve the Black and Latinx communities.  Greenwood’s Give Back Program allows customers to donate to organizations such as the NAACP, the United Negro College Fund (UNCF), or Goodr (a food bank) every time they use their debit card.
• Check out Paid Deposit Switch API launch making it easier for users to establish or change the destination of their direct deposit.
• Coinbase to become publicly traded via direct listing of its Class A common stock as opposed to IPO.
• Branch announces the launch of their Employer Payments Platform.
• Mambu announced another year of approximately 100% YoY growth for 2020 and a market valuation of $2.1B.

 
And the capital keeps pouring in with no signs of slowing down….  Here are a few honorable mentions for this week:
 

• Fast raises $102M in Series B round led by Stripe and Addition, with participation from Index Ventures and other existing investors.  Fast allows you to log into websites and check out without having to enter information more than once creating a one-click checkout process. 
• Albert raises $100M in Series C round bringing their total funding to date to $173M since 2016.  Albert is a mobile banking, savings, and investing platform and has signed up more than 5 million users.
• Stilt raises $100M debt facility with Silicon Valley Bank bringing their total debt facility to $225M.  Stilt provides financial services and credit building products for immigrants in the US.
• Fintech B2B payment firm, Melio raised $110M in Series C2 round for a $1.3B valuation.
• Fintech mobile app, Dave secured a $100m Credit Facility from Victory Park Capital.

 
Random Uncle Sean Stuff:

• One good thing about quarantine lock down – I don’t remember the last time I bought gas for my truck!
• Still loving our new air fryer!!!  We made homemade chicken wings the other night and they were glorious.
• January is over???  How did that happen so fast? 

 
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.