Posted In:

Real Estate, Mortgage


#348
House On The Prairie

Published:

Aug 08, 2020


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Posted In:

Real Estate, Mortgage

Published:

Aug 08, 2020


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Despite the current market conditions, U.S. home ownership is skyrocketing. At 68%, it is at the highest level since the third quarter of 2008, and almost 4% higher than a year ago. New home sales are trending up YoY, and June home prices saw the largest monthly gain in 7 years. With mortgage rates remaining low, Americans are reconsidering how (and where) they live and work.

These secular trends are being reflected in the capital markets, with companies that facilitate residential real estate transactions as the beneficiaries. Intercontinental Exchange (ICE) recently acquired Ellie Mae (enterprise software for the mortgage finance industry) for $11b. Rocket Mortgage gained over 20% in its first day of trading, while Porch announced its plans to combine with PropTech Acquisition Corp (yes, another SPAC) for $523m.

Zillow and Redfin reported their quarterly earnings as well, revealing surprising resiliency in residential real estate. Both saw significant year over year growth late in Q2, after the real estate market had frozen up in April - with Zillow’s CEO synthesizing the secular trends as a “Great Reshuffling” in America.

Clearly, the pandemic is accelerating innovation to help people safely and digitally shop, purchase, sell, finance, rent, or invest in real estate. Who knows - by the end of the year we might be writing this newsletter from a prairie in Minnesota. With the right Zoom background, only we will know the truth!

Portfolio News


Galileo powers MoneyLion's RoarMoney(SM) - The new digital banking solution drives greater financial inclusion. RoarMoney is designed to meet consumers' financial needs now and as they evolve – from faster access to their funds to safe and secure contactless payment options. Read more

Future of wealth management and investment panel: Wharton Fintech podcast series - Portfolio company MoneyLion's Ryan Finneran featured in Wharton Fintech podcast alongside Ed Robinson - president & co-founder of Stash - and Joe Percoco - co-CEO & co-founder of Titan. Read more

Women are leading Latin America’s fintech transformation - Portfolio company Runa's CEO - Courtney McColgan - featured among the top female leaders disrupting gender inequality in a traditionally male-dominated sector and region. Read more

Little House On The Prairie


ICE buys Ellie Mae for $11b allowing ICE to expand its own mortgage-servicing business - More than 40% of annual U.S. mortgage originations are processed using Ellie Mae software. That gives Ellie Mae insight into trends such as borrowers’ credit profiles and changing underwriting standards. Read more

Quicken Loans parent’s stock rises as company looks to build ‘the Amazon for financial services’ - Quicken Loans rose to become the country’s largest mortgage lender in recent years following the debut of Rocket Mortgage, its digital mortgage application process. Rocket Mortgage proved especially popular among millennials, Walters said, who now form the largest generation of home buyers in the market. Read more

Zillow stock spikes after crushing Q2 expectations; CEO says ‘people’s desire for home is resilient’ - Fellow Seattle real estate giant Redfin also beat estimates for its quarterly earnings last week as the U.S. housing market rebounds. Redfin and Zillow are riding a trend of increased home ownership driven in part by record-low mortgage rates. The U.S. Census reported last week that home ownership rates increased year-over-year from 64% to 68%, the highest level since 2008, and one of the largest increases in history. Read more

US 30-year mortgage rate falls to 2.88%, hitting a record low for the 8th time this year - The housing market has been one of the few areas to show continued strength in the recovery from the coronavirus pandemic recession. Where the labor market recovery has slowed and consumer sentiment is waning as new COVID-19 cases tick up, the housing market has had a strong rebound. Read more

Industry News


Alipay and WeChat Pay could face antitrust investigation - China's antitrust agency is pondering an investigation into Alipay and WeChat Pay after the country's central bank raised concerns about the mobile payment behemoths, according to Reuters. Read more

Online lender Kabbage considers a sale, reportedly seeking up to $1b - Possible bidders include financial institutions and technology companies; no private-equity investors have emerged among the interested parties, one person said. A winning bid is expected within a month. Read more

Goldman names new head of digital assets, betting on blockchain's relevance in the future of financial markets - The bank made Mathew McDermott, a managing director who ran the investment bank’s internal funding operations, its new global head of digital assets last month. Read more

Google signs up six more partners for its digital banking platform coming to Google Pay - News of Google's big move into banking and personal finance through an effort known internally as “Project Cache” was first reported in November. Much like the mobile banking services offered today by a number of startups, Google will provide the consumer-facing front-end to the digital banking services it makes available, while the accounts themselves will be held by the FDIC-backed partner institutions. Read more

Casa pivots to provide self-custody services to secure bitcoin - Colorado based Bitcoin security service provider now allows customers to hold their own bitcoin following a popular trend of self-custody in the ecosystem. Read more

Grab launches micro-investment, third-party loan and BNPL offerings - Grab, the Singapore-founded car share turned super app, is further reinforcing its position in the financial services sector with a string of new offerings. Read more

Square surges, more customers using Cash App - Shares of Square soared on Tuesday evening after posting better-than-expected quarterly results (64% jump in revenue) and strong growth in its consumer payments app. Read more

Intuit agrees to buy Singapore inventory software maker - The Mountain View, California based company will integrate TradeGecko’s system into its QuickBooks accounting suite to help sellers manage their orders and inventory. The transaction is expected to close in September. Read more

Metro Bank is acquiring peer-to-peer lender RateSetter for up to £12m (initial price of £2.5m) - RateSetter, founded in 2010, has originated £4b of lending over 750k people have invested or borrowed through the platform. For FY 2019, revenue was £33m, a pre-tax loss of £8m and gross assets of £42m. Read more

RBC seeks to pump up Its AI models with a new platform - The Toronto-based bank, which serves more than 17m customers in over 30 countries, has 1,000-plus AI models for jobs like fraud detection, risk analysis and marketing. This new AI private cloud can analyze more than 13m client records in under 20 minutes. Read more

Bankers rush to Darien library with power down in NYC’s suburbs - When the power is out, Wall Street heads to the local library. One enterprising trader set up his desk with two monitors at a picnic table, capitalizing on the free wireless Internet access outside the library building. Read more

Bond market gets new entrant in race to automate debt sales - The market for new-issue debt still relies on phone calls, instant messaging and emails to handle billions of dollars in orders and is one of the last corners of finance to experience a digital makeover. But with corporate bond issuance hitting records above $2t in the first half of the year, traditional methods are proving increasingly unwieldy, prompting calls for more automation. Read more

Short on money, cities around the world try making their own - Fans of “complementary currency” are betting that this Depression-era idea for keeping towns alive by printing local money can prove its worth as pandemic relief. Read more

Goldman Sachs is building an M&A dealmaking app called Gemini - It works like this; the app breaks down how different divisions of companies perform relative to peers, showing how they can grow through mergers and partnerships. It also details which ones look ripe for disposal. Read more

Apple buys startup Mobeewave to turn iPhones into payment terminals - Mobeewave’s technology lets shoppers tap their credit card or smartphone on another phone to process a payment. The system works with an app and doesn’t require hardware beyond a Near Field Communications, or NFC, chip, which iPhones have included since 2014. Read more

Select Financings


Ayoconnect - Indonesia based bill payment startup raised $5m in pre-Series B funding from BRI Ventures, Kakaku, and Brama One Ventures. Read more

Bnext - Madrid, Spain based challenger bank raised $13m in additional Series A funding led by DN Capital, Redalpine Venture Partners, and Speedinvest. Read more

Buckle - Jersey City, N.J. based insurer for ride-hail drivers and other gig economy workers raised $31m in Series A funding co-led by Eos Venture Partners and HSCM Bermuda. Read more

CloudPay - U.K. based payroll provider raised $35m in growth funding led by Runway Growth Capital. Read more

Kompany - Vienna, Austria based RegTech platform for anti-money laundering and business know-your-customer raised €6m in new funding led by Fairway Global Investment. Read more

Orum - New York based platform to help financial institutions move money and predict funds availability raised $5.2m in Seed funding led by Homebrew. Read more

Proper - San Francisco based AI-powered accounting and bookkeeping service for property managers raised $4.8m in Seed funding led by MetaProp. Read more

REDD Intelligence - New York based online market intelligence platform focused on fixed income and emerging markets news raised $5.8m in funding led by Nassau Point Investors. Read more

Splitit - New York based global payment platform that enables shoppers to pay installments via their credit cards raised $71.5m in a private placement and share purchase plan (“SPP”) from Woodson Capital Management and other undisclosed investors. Read more

sync. - London based account aggregation and personal financial management service raised £5.5m in Seed funding. Read more

TaxScouts - U.K. based tax preparation startup raised £5m in Series A funding led by Octopus Ventures. Read more

Volante Technologies - Jersey City, N.J. based cloud-based payments and financial messaging provider raised $35m in growth funding led by Wavecrest Growth Partners. Read more

Zibo - Redwood City, California based platform for independent landlords to manage finances raised $10.5m in Seed funding led by Canaan Partners. Read more


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FinTech Collective Newsletter

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Delivered every Saturday, the weekly newsletter, produced by our team, provides a tightly edited rundown of global fintech news, along with a bit of our original analysis.