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🌊The Fintech Wave #57

Nino Pavicic

and

Hrvoje Pavisic

Dec 12, 2022

TLDR: Circle is not going public. More layoffs for fintech companies. Lending startup Stilt is acquired. $1B credit facility for a fintech app.

Notable mention

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European News and Funding

$1 Billion credit facility for Curve💰

Huge debt round for a company that wants to be the only fintech app that customers need. A pretty ambitious goal considering the competition. Credit Suisse provided the money. Curve offers debit and credit cards, a mobile app + a buy now pay later option.

With this money, Curve will be able to offer loans in the UK, EU, and the USA. In the UK, Curve renames BNPL (buy now pay later) into SNPL (swipe now pay later) - enabling customers to split any transaction they make on the Curve card into three, six, nine, or 12 monthly installments.

They offer one cool feature that I have never seen before. It is called the Anti-embarrassment mode 😂 If your main card is for some reason declined at the time of purchase, the app is automatically switching to another card you have in the app.

Lending fintech challenger raises £100M

Allica Bank secured the money for the Series C round of funding. The bank is focused on providing lending services to small businesses in the UK. They are offering savings accounts, mortgage, and assets financing up to £500,000.

Allica Bank is the “real bank” because it has its own banking license and although it is a private company they publish a yearly report with detailed financials (which other fintech are trying to keep a secret as long as possible). The bank had £7.8M of revenue in 2021 and £18.3M of loss, but in June 2022 the bank announced it is profitable. Also, the customer number increased from 2,666 to 58,749 (a 2,105% increase). You can find the report here.

Americas News and Funding

Stash and Plaid layoffs😔

Investing app Stash, lay off 8% of its workforce (which is around 30 people). Of course, the reason is a change in the market conditions.

With Plaid the situation is a bit more serious since the company announced that 20% (260 people) of its workforce will be without jobs. Plaid is an infrastructure solution that allows anybody to build financial products on top of it. Fintech is really hit hard by the recession. Every week few companies announce layoffs.

Stilt acquired🤝by JG Wentworth

Last week we write about how lending startup Stilt could be in problems, and this week they announced they are being acquired by JG Wentworth. Stilt website is down and it is already redirecting to JG Wentworth.

JG Wentworth is a consumer financial services company that offers structured settlement payment purchasing, annuity payment purchasing, lottery and casino payment purchasing, and debt resolution services. They are entering into lending service, so they bought Stilt to get a customer database. Terms of the deal are not disclosed, probably because Stilt was sold for a very amount (in total Stilt raised $322M, but they are acquired for a much lower).

Crypto ₿ites

Circle is not going public any time soon

Circle is one of the most essential crypto companies in the world and the issuer of the stablecoin USDC. CEO just announced that the company is not going public. They planned to go public via SPAC more than a year ago, but it was never the right time and now it is postponed indefinitely. A couple of reasons for that:

After FTX collapse, it is just not the right time for the crypto company to go public
SEC (The U.S. Securities and Exchange Commission) did not give all approvals (probably due to FTX problems)
Looking at the stocks of the companies that went public via SPAC in the last few years, the performances are not good. Most of them turned into penny stocks.

Jeremy Allaire @jerallaire

1/ Some big @circle news. This morning, we announced the termination of our proposed deSPAC transaction. While disappointing that we did not complete SEC qualification in time, we remain focused on building a long-term public company.

circle.comCircle and Concord Acquisition Corp Mutually Agree to Terminate Proposed Business CombinationCircle and Concord Acquisition Corp announced the mutual termination of their proposed business combination.

Taylor Swift had better due diligence than most Crypto VCs

Apparently, FTX was offering $100M to Taylor Swift if she endorse them on social media, but she didn’t accept the offer. Probably she (or her team) did some due diligence and saw a lot of red flags around FTX.