Welcome to The Interchange! If you receive this in your inbox, thank you for signing up and for your vote of confidence. If you’re reading this as a post on our site, sign up over here So you can receive it directly in the future. Each week, I’ll take a look at the most important fintech news of the past week. This will include everything from funding rounds to trends to analysis of a specific space to hot offers on a particular company or phenomenon. There is a lot of fintech news, and it’s my duty to stay informed – and understand – so you can stay informed. – Mary Ann
Welcome Welcome. By the time you read this, we’ll be two days away from TechCrunch Disrupt! so interesting!
But first, let’s talk about fintech.
The big news last week was the announcement by corporate spending management startup Brex that it would lay off 11% of its employees, or 136 people. It was also revealed that the startup’s chief financial officer, Adam Suishiki, is leaving to join Rippling as its chief financial officer. Notably, the workforce platform Unicorn Rippling has recently entered the company’s management sphere, making it a direct competitor to BRICS.
First, it’s rare — and refreshing — for a company to actually proactively share news of layoffs, so it’s interesting that Brex has trumped any gossip and informed me about its plans firsthand. As Alex Wilhelm pointed out on Friday’s Equity podcast, the layoffs appear to be mostly related to Brex’s move earlier this year to stop working with unprofessionally funded SMEs and startups. In other words, the company said it is primarily abandoning people who focus on serving that group. However, this must suck for these employees – especially considering those groups you no longer work with initially were Brex’s bread and butter.
From a larger perspective, the news of Brexit layoffs shows that even the decade of the century was not immune to this downturn. The company earlier this year confirmed a $300 million Series D extension at a staggering $12.3 billion valuation. And while the company claims to be “in a strong financial position after many years off the runway,” it adds that its shift away from SMEs to focus more on enterprise customers — and, by default, any relevant layoffs — will put the company “on the run” a path to sustainable profitability over the next few years.”
Side note: Regardless of Brexit, it still amazes me that companies in general can raise hundreds of millions of dollars in funding but don’t make a profit. I doubt I could ever be a sponsored startup founder. The stress of having to offer returns to the investors who put that kind of money into my company and the pressure of not wanting to lay off employees is probably making me lose sleep at night! Guess that’s why I’m a journalist, not a startup founder!
Anyway… Speaking of Disrupt and Brex, I’ll be interviewing co-founder and co-CEO Henrique Dubugras and Anu Hariharan, Managing Director of YC Growth Fund, YC Continuity, live at Fireside Chat on October 19! I will also be speaking to Ramp CEO and Co-founder Eric Jaliman, CEO and Founder of Airbase Thejo Kote and Anthemis Partner Ruth Foxe Blader in a session titled “How to Compete Without Losing Your Mind and Track When Cash Is Expensive” on the same day. And finally, I’ll talk to Rippling CEO and co-founder Parker Conrad about his company’s plans to “go global.” Come see us! (Get 15% off here).
Oh, and if you want to hear me talk about everything from “the good and the ugly sides of fintech, what great journalism really means, and why startups are hope,” check out this episode of the Fintech Leaders podcast I recently recorded with VC Miguel Armazah.
Venture investors demand financing for start-up real estate investment companies
Image credits: Edwin Remsberg (Opens in a new window) / Getty Images
Welcome! It’s Anita Ramaswamy reporting from the Office of Financial Technology here at TechCrunch along with Mary Ann. We’ve seen a lot of interest – and finance news – in the real estate and proptech spaces lately. Specifically, there have been a number of start-ups that have been collecting rounds of real estate investment applications that aim to help expand the reach of the asset class for retail investors by giving them tools to bypass hurdles such as the large capital requirements offered that are usually necessary to invest in their home.
Venture is one example. The startup recently closed a $6.2 million funding round with an $80 million valuation of its platform offering split-shares in residential real estate to investors for just $5. We’ve also covered similar platforms like Landa, Nada, and Arrived Homes, all of which raised new funding in 2022.
The growing interest among retail investors to access real estate may seem counterintuitive as higher interest rates make real estate look less attractive than it has been in the past few years. But these startups are likely to focus more on growing secular long-term demand for real estate as part of a diversified portfolio rather than indulging in concerns about short-term volatility.
Here is what Fintor founder and CEO Farshad Yousefi had to say about the current market environment in an email to TechCrunch:
While recent media headlines have focused primarily on market volatility, there are still current opportunities for investors to engage in real estate investing with the right kind of strategic approach. For example, Atlanta has seen a staggering 12% annual growth in rental rates, which has directly boosted investors’ cash flow. Additionally, when looking across the board to the top of the MSA, large institutional investors have seen a nearly 50% jump in renewal rent growth. This sharp upward trend in tenant retention clearly shows where the demand for rentals is headed.
For a more in-depth look at real estate technology and how it has changed the investment landscape, check out my article at TC+ this week:
Weekly news
manoushe It announced last week that it has added two new features to its identity verification product. Via email, Alain Meier, president of Plaid Identity and Fraud (and former CEO of Cognito), told me: “With the new Autofill feature, users can be verified in less than 10 seconds. At the back end, we’re building more intelligence for our risk and fraud models. Through behavioral analytics to stay ahead of fraudsters.”
The behavioral analytics piece is particularly interesting because assuming you know your SSN/phone number by heart, your typing behavior will be very different than if you were to copy and paste it from a document. Plaid acknowledges that this type of technology is not new but claims that it is not usually combined with other fraud detection features that Plaid offers.
Going behind the arena? TechRadar reported: “After its acquisition of Now Zettle in 2018, PayPal Announced a brand new POS device designed to meet the needs of small and medium businesses. The newly launched Zettle Station connects to the internet via free Wi-Fi or a pre-loaded SIM on 3G and 4G networks to enable business owners to work on the go. This “completely mobile” approach should appeal to multi-site vendors, as it does not require additional setup or manual connectivity at each new location. “
As stated by Kristen Hall: “Green Light Financial Technology, a venture-backed financial technology company focused on providing a debit card, banking app, and financial education to children, has added another layer to its subscription plan with the introduction of family safety features. Greenlight Infinity, at $14.98 per month for the whole family, includes location sharing to see where anyone in the family is and check-ins; SOS alerts to emergency and/or 911 contacts with a single click; and fault detection through 911 automatic transmission where if an accident is detected while driving, driver and flight information is provided to emergency services.”
TC+ editor Alex Wilhelm delved into some of the third-quarter funding numbers, and what he discovered when it came to the fintech sector wasn’t looking good. He wrote: “Looking at Q3 2022 data from CB Insights, it is clear that the fintech funding boom is behind us; what’s more, global fintech finance activity is now back to where it was before 2021, indicating that last year It was more of a deviation from the new normal for the startup category.”
Sarah Perez reports that apple It is taking a big step towards offering more banking services to its customers. On October 13, the company announced its partnership with Goldman Sachs to launch a new savings account feature soon for Apple Card credit card holders, which will allow them to save and increase their “Cash Every Day” – cashback rewards earned on their Apple Card. Purchases. In the coming months, Apple says cardholders will be able to automatically save that money into a new high-yield savings account from partner Goldman Sachs that can be accessed using Apple Wallet. Customers will be able to transfer their own money to this account as well.”
The Los Angeles Times reports that “credit cards and digital payment apps like PayPal offer some distinct advantages over cash, including the ability to refund money paid to fraudsters. But zill, a digital payment network owned by seven major banks, does not provide protection to its users. If you use Zelle to pay someone who proves to be a fraudulent artist, you have little chance of getting the money back from your bank. The same is true if you send money to the wrong person. If you hit Send, the money might be gone – just like you’ve lost a $20 bill on the street.” Meanwhile, there was chatter on twitter That Zelle actually had a much larger transaction volume in 2021 than Venmo and CashApp. Hmmm. I’m still trying to find proof of that.
Finance, Mergers and Acquisitions
Seen on TechCrunch
The former VC gives smart financial advice to people who really need it, rather than just the rich: When announcing this $24.4 million increase led by GGV Capital, Northstar CEO and co-founder Will Peng told me: “The time from the first meeting to the term sheet was about Month “.
With new capital of $67 million, NorthOne is doubling down on SMEs as some fintech firms fall back
See, TripActions has been raised at a valuation of $9.2 billion after reporting a $12 billion deposit for its IPO
Getaway launches a way for you to enjoy owning a vacation home
Egyptian consumer money app Telda raises $20 million from GFC, Sequoia Capital and Block
Airwallex raised $100 million to support cross-border banking, valuation remains steady at $5.5 billion
Charli D’Amelio-certified Fintech Step borrows $300 million to bring crypto to teens
This company wants to improve your credit by manipulating your financial literacy
GoHenry, the under-18 banking service, has raised $55 million after exceeding 2 million users
and in other places
Venture capital firm QED acquires fintech executive search firm
Astra raised $10 million in Series A funding; $30 million credit limit
Corporate card startup Mercantile raises $22 million to target an unusual niche: professional associations
Financial Finesse launches investment arm supporting ‘FinTech for the Common Good’
Well, that’s it for this week! Once again, we thank you for your continued support – and I really hope to see some of you IRL at Disrupt! xoxo, mary ann
Originally published at San Jose News Bulletin
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