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Retirement, Equity


#341
33%

Published:

Jun 20, 2020


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Posted In:

Retirement, Equity

Published:

Jun 20, 2020


Author:


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The US personal savings rate (as a percentage of disposable personal income) has historically been between 6-8%. In the era of Corona, like many other economic trends, this metric has seen a massive paradigm shift.

In February, the personal savings rate in the US was at the standard 8.2%, and as businesses shut down and consumers understandably became nervous, the savings rate jumped to 13.1% in March. At that point, consumers had put $2.17t into savings, marking the highest rate since 1981. Then April came, and the rate spiked to a historic 33%, which was by far the highest level reported since the U.S. Bureau of Economic Analysis started tracking this metric in the 1960s.

As the economy begins to reopen, the data in the months ahead will be closely scrutinized to see how lasting this trend might be. Early indicators point to a rebound in consumer spending, and any meaningful recovery will depend on money flowing through the system (and it can’t just be from the Fed). This situation isn't unique to the U.S. - plenty of other countries, especially in the U.K. and Europe, are dealing with a similar phenomenon.

With the transparency of choice, consumers are in the driver’s seat of where to park their hard-earned money. This may be fintech’s time to shine and persuade people away from stashing money in their walls like in the Ozarks ...

Portfolio News


World Economic Forum Technology Pioneers 2020 - Portfolio company IMMO was named in the The Technology Pioneers of 2020, an invitation-only group of the world’s most promising start-ups and scale-ups that are at the forefront of technological and business model innovation. Read more

MoneyLion featured in Aite Group's 2020 Digital Wealth Management Impact Innovation Awards - Portfolio company MoneyLion receives award in Digital Multiproduct Offering category, being recognized as one of the industry’s best and brightest financial services firms. Read more

The pandemic could be a turning point for online shopping in Africa - Portfolio company Flutterwave, which began as a digital payments company, also launched an online marketplace in April, where businesses can set up a storefront on the platform and list and sell their goods. The service is now available in 15 African countries. Read more

33%


Investors approaching retirement face painful decisions - Tens of millions of retirement-ready individuals have decided to exit the market and hold cash rather than equities. More than 35% of investors ages 65 and up have sold all their holdings compared to 18% for buyers of all age groups. Read more

A scramble for gold is redrawing the map of the market - New York faces a gold rush after the pandemic threw precious-metal markets into disarray, setting off a scramble by traders to cut their losses.. More than 20m troy ounces of gold have landed in New York vaults over the past three months. Read more

Coronavirus has turned Britain into a nation of savers - By removing the cost of commuting, eating out and leisure from normal spending UK households are saving £162 a week on average during the lockdown. Read more

Industry News


In a digital age, cash still has its attractions - This week the European head of payments company Visa told the FT that the pandemic would lead to a “permanent” shift away from cash but as more technology companies move into the payments business, cash is a means for consumers to keep data on their spending to themselves. Read more

TransferWise receives authorization from Brazil's Central Bank to act as foreign exchange broker - It has been operating in the country since April 2016 as an exchange correspondent for local banks. The approval will greatly reduce costs for sending and receiving funds from abroad. Read more

WhatsApp launches payments, starting in Brazil - After months of talks and trials, WhatsApp has finally pulled the trigger on payments in its app. Users in Brazil will be the first to be able to send and receive money through the messaging app, using Facebook Pay. Read more

ByteDance bids for Singapore banking license - Chinese tech group behind TikTok seeks to expand reach with a move into financial services by joining forces with Singapore’s influential Lee business family. The MAS is set to issue five virtual banking licenses by the end of the year. Read more

TPG, L Catterton, PIF become latest Jio backers - In recent months, the Indian telecom upstart has attracted a slew of significant investments from corporates, VCs and private equity firms. The list keeps growing. Read more

EU opens antitrust investigation into Apple Pay - European Commission opened antitrust investigation into Apple's terms and conditions and its steadfast refusal to open up its NFC functionality on iOS devices to proprietary bank payment apps. Read more

UK's top court rules against Visa and Mastercard in interchange fee battle - The UK's Supreme Court has come down in favor of the UK's biggest supermarket chains in a long-running legal battle over the level of interchange fees charged by Visa and Mastercard. Read more

Cambridge, World Bank and World Economic Forum launch survey to assess COVID impact on fintech - Cambridge Centre for Alternative Finance, alongside the World Bank and World Economic Forum, launches survey to assess impact of COVID-19 on the global fintech industry. Read more

Wirecard’s missing $2.1b forces out CEO, panics lenders - Markus Braun’s almost two decades as Wirecard AG’s CEO ended after accusations about the company’s accounting culminated in a shock disclosure that it was was unable to locate $2.1b. Read more

Square acquires European peer-to-peer payment app Verse - Square has attracted a ton of users with Cash App, its P2P payment app that lets you easily send and receive money from your phone, but Cash App has only been available in the U.S. and the U.K. Acquiring Verse seems like a good fit to expand Square’s presence in Europe. Read more

Coalition including Ripple, GoPay launches universal PayID - More than 40 different fintech firms, digital currency companies, and nonprofits are teaming up to launch a universal payment ID in a bid to make transferring money akin to sending an email. Read more

Why GS is delaying its robo advisor until 2021 - Goldman has decided to delay the launch of its robo advisor, COO John Waldron said. The firm is also slowing its hiring of financial advisors. Read more

Having stolen the spotlight, now Robinhood has to dance - Robinhood has captured the zeitgeist, but the online finance industry is evolving rapidly around it forcing it will to continue to figure out how to keep more than its fair share. While the current $8.3b valuation may sound like a lot, it implies a value of roughly $600 per account which is less than half of what Morgan Stanley is paying for E*Trade. Read more

Select Financings


BizCapital - Brazil based online lender BizCapital raised $12m in Series B funding led by DEG , the German development finance institution. Read more

Botkeeper - Boston based accounting automation startup raised $25m in Series B funding led by Point72 Ventures. Read more

MayStreet - New York based market data infrastructure platform raised $21m in Series A funding led by Credit Suisse Asset Management's NEXT Investors. Read more

Monzo - London based challenger bank raised £60m in additional funding at a down-valuation of £1.24b from existing investors Reference Capital and Vanderbilt University. Read more

La Haus - Mexico and Colombia based real estate tech company raised $16m in Series A funding led by Kaszek Ventures. Read more

Pagaya - New York and Tel Aviv based AI-driven asset management firm raised $102m in Series D funding led by GIC. Read more

Remessa Online - Brazil based money transfer service raised $20m in Series A funding led by Kaszek Ventures. Read more

River Financial - San Francisco based River Financial raised $5.7m in Seed funding led by Polychain Capital to help build out a suite of financial services around Bitcoin. Read more

Tonik - Philippines based digital bank raised $21m in Series A led by Sequoia Capital and Point72 Ventures. Read more

UNest - Los Angeles provider of financial planning and savings tools for parents raised $9m in Series A funding led Anthos Capital. Read more

Upgrade - San Francisco based challenger banks raised $40m in Series D funding led by Santander InnoVentures at a $1b valuation. Read more


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