🌊The Fintech Wave #50

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Oct 10, 2022

TLDR: Paypal is changing terms of service. Another view on winners from Figma’s acquisition. Debt payoff platform raises money. Fintech lender files for bankruptcy. $720M for a bitcoin company. If you are looking for a remote job, we found a Twitter thread with the best job boards.

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Another look at winners from Adobe’s acquisitions of Figma

This is a great example of how venture capital investments work - you can be wrong most of the time, but you just have to hit one great investment. For the VC funds that were invested, Figma probably returned 1-5X of each of their entire funds.

Jeff Weiner, a co-founder of LinkedIn, invested a couple of hundred thousand in Figma's seed round (total round was $3.9M). His stake was worth $440M 😲 One of the best angel investment ever.

PayPal can freeze your funds if they don’t agree with your post on social media😲

Last few days, Twitter (and other social media) has been on fire because of the changes in Paypal’s terms of service. Apparently, Paypal changed its ToS to deduct $2500 (per offense) from your account if they disagree with content you post elsewhere.

This is the comment of the ex-Paypal president👇

People started deleting Paypal accounts and posting screenshots around social media. After a few days, Paypal said they “never intended” for this to be part of their policy, but nobody can believe them anymore. If you are holding your money on Paypal be careful.

European News and Funding

Insurance☂️marketplace for professionals and small businesses

French insurtech startup Olino raised €2.2M, to modernize the insurance marketplace offering.

They are targeting freelancers and small businesses with a simple concept - the customer fills in a few pieces of information and Olino analyzes their business/activity in 2 minutes and finds the best coverage/price ratio possible. They are partnering with 30 insurance companies. There is nothing super innovative in this idea, but it’s always good to have more marketplaces where you can shop around for insurance.

Also, Olino has a separate platform called Cockpit that helps businesses to manage and understand their insurance contracts with some very nice dashboards and visualizations.

Americas News and Funding

Total credit card debt in the USA is around $1 Trillion. It is not unusual for people to own tens of credit cards and use one card to pay off another. And they get overwhelmed by that. Tally raised $80M Series D to help with this problem.

Tally helps its users to pay off their credit card debt with some clever automation. This is how it works:

Users download the app and connect existing credit cards so Tally can run some credit score checks (users should have at least a 580 FICO score to apply)
If approved, Tally will offer a lower-interest line of credit that will pay off the existing credit card debt.
Users can continue to use all the existing credit cards but they will just get one monthly bill from Tally to pay off.

This is pretty good for someone who has debt on a few cards - Tally makes it a bit easier, but in the end, the user still needs to pay off the debt, and the app won’t magically do it. But it can help a little bit.

With this funding announcement, the company also mention that it nearly tripled its Annualized Recurring Revenue (ARR) in the past year (although we don’t know the numbers).

Fintech lender went bankrupt📉

Kabbage, a loan provider for small businesses, filed for bankruptcy after numerous federal investigations about their PPP lending practices. PPP or Paycheck Protection Program was rolled out due to Covid-19 to help small business owners to keep their workforce employed during the pandemic.

Turns out, Kabbage was approving these loans too easily, sometimes to businesses that are not qualified for that. The money for the PPP program came from the federal government, but banks (and other lenders) were tasked to check the application and distribute cash and were paid a small percentage of each loan as a fee.

The more loans they approve, the more fees they collect. Apparently, 48.000 loans worth $1.3B was approved.

Interestingly, American Express is the owner of Kabbage, which they bought 2 years ago for $750M. Prior to the acquisition, Softbank invested $250M into Kabbage.

Crypto ₿ites

NYDIG raises $720M🚀

Despite Bitcoin being around $20K, NYDIG didn't have problems raising money. NYDIG is offering bitcoin products for large financial institutions such as banks, credit unions, and investment funds.

This comes only a few days after NYDIG announced excellent business results - bitcoin balances hit all-time highs in Q3, up almost 100% year-over-year, and revenue is up 130% through Q2. There is no winter for NYDIG.

Blockchain project that wants to bring zero-fee payments

VF Protocol raised $750K from Scout Ventures to try to build a zero-fee payments network powered by decentralized finance. I’m super happy to announce this because I personally know Cameron (founder) and we talk about the VF Protocol idea months ago.