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Innovation, Technology


#373
Innovate Or Die

Published:

Feb 06, 2021


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Posted In:

Innovation, Technology

Published:

Feb 06, 2021


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A great American - Thomas Edison - said, “the value of an idea lies in the using of it.” That seems obvious, but it also highlights the importance of cultivating innovative practices. These often flourish in clusters and ecosystems, where talent congregates and grows symbiotically.

Given its history, it is concerning that the US dropped out of the list of top 10 most innovative countries in Bloomberg’s latest Innovation Index. South Korea ranked highest, with a cluster of European countries also leading the pack. The index analyzes criteria using seven equally weighted metrics, including R&D spending, manufacturing capability and concentration of high-tech public companies. Unsurprisingly, the US topped the latter, considering names like Zoom or Pfizer are among 2020’s emblems of innovation.

While the US has produced nearly half of fintech unicorns globally, it lags behind in some key financial innovations. It is still largely check-centric (42% of B2B payments are paper-based), while numerous countries have pulled ahead in implementing real-time payments systems. This might not be surprising, as it took the US eight years to adopt same-day ACH in 2016.

Considering that the US topped the first version of the index in 2013, dropping to 11th in less than a decade is far from ideal. Rankings should always be taken with a grain of salt, and are never all-encompassing, but they are useful comparison providers. President Biden announced this week that “America is back” as he announced major foreign policy shifts… is it really?

Portfolio News


City National Bank joins with Extend to launch virtual Visa commercial credit card solution - With this new virtual Visa card capability, City National commercial card clients can instantly send virtual credit cards to employees, contractors and vendors with enhanced digital capabilities, distinct spending limits and expiration dates, giving companies more oversight and control over how corporate cards are used. Read more

NYDIG expects to Hold $25b in Bitcoin for institutional clients by year end - Ross Stevens, CEO of portfolio company NYDIG, delivered the first bitcoin-focused talk of MicroStrategy's annual World.Now conference, commenting on how NYDIG's institutional order books are looking bullish for the year. In a conversation with Michael Saylor, the discussion focuses on Bitcoin as an investment grade, safe-haven treasury reserve asset and the solution to the store of value problem faced by all corporations and their customers. Listen to the replay here: Link. Read more

How venture capital sees fintech now - The fintech world is expanding at a sometimes breathtaking pace. Much of that growth is driven by venture capital, but how do VCs decide which companies to invest it in--or not? Join Greycroft partner Will Szczerbiak on February 23rd for a discussion with Olugbenga Agboola, the founder and CEO of portfolio company Flutterwave, the San Francisco-based startup building the largest payments infrastructure in Africa. Read more

Deutsche Bank says $31m blockchain investment could save capital markets 'billions' of dollars - Congratulations to portfolio company Axoni, which has raised an additional $31m from German Bank Deutsche Bank, Intel Capital, Swiss bank UBS and existing investors including Citi, Goldman Sachs, JPMorgan, Wells Fargo and others. The investment, a Series B add-on, from the round initially announced in August 2018, brings the total amount invested in the firm to $90m. Read more

The future of fintech: Trends & opportunities in lending - Please join Jason Guss, CEO of portfolio company Octane, and Matt Levinson, Principal at FinTech Collective, to discuss the future of fintech and upcoming opportunities in lending. Sam Hendel, co-founder of Dataminr, will lead an audience Q&A session at the end of the webinar. Please register here: Link. Read more

Emerging markets: An introduction to FTC’s emerging cities thesis - Supported by widespread technological adoption and shifting demographic trends, emerging market urban hubs are rapidly becoming relevant centers for entrepreneurial development and innovation. Come listen to Brooks Gibbins and Carlos Alonso Torras discuss outstanding trends in these geographies, some of FTC’s emerging markets portfolio companies and introduce FTC's emerging cities thesis. Listen here. Read more

Innovate Or Die


South Korea leads world in innovation as U.S. exits top ten - The 2021 rankings reflect a world where the fight against Covid-19 has brought innovation to the fore –- from government efforts to contain the pandemic, to the digital infrastructure that’s allowed economies to work through it, and the race to develop vaccines that can end it. Read more

Fed narrows timeframe for launch of real-time payments platform - The Federal reserve has cut the launch timetable for its new real-time payment system FedNow by a full year to 2023. The launch of the new payments plumbing will operate in a phased approach, beginning with core clearing and settlement functionality and key value-added features, such as a request-for-payment capability and tools to support participants in their handling of payment inquiries, reconcilements and certain exceptions. Read more

Contactless payments adoption to increase 6-8% globally compared to pre-COVID projections - Deloitte recently revealed that the issuance of contactless debit and/or credit cards, promotion of online or all-digital wallets, and the installation of POS devices with contactless capabilities have all gone up considerably since the COVID outbreak. Read more

Pix takes off in Brazil, bringing opportunity and competition - Brazilian banks and fintechs are taking advantage of the new instant payments system to integrate transactions frictionlessly into everyday operations. But Pix is also poised to shift the competitive dynamics among the country’s banks. Read more

Industry News


Wall Street firms paid almost $3b last year for retail brokers’ trades - Monthly regulatory filings collated by Bloomberg show “payment for order flow” earned US brokers $2.9b in 2020. TD Ameritrade generated fees of $1.1b between its broker-dealer and clearing divisions, while rival Robinhood grew fastest, earning fees of almost $700m. Read more

Ant reaches agreement with China regulators on overhaul - China only introduced its framework for financial holding companies in September and many of the specifics are still being ironed out. While the rules will eventually provide more regulatory clarity for Ant, they’ll almost certainly force the company to slow the torrid pace of expansion that has made it China’s dominant fintech player and one of the world’s most valuable startups. Read more

Reddit’s WallStreetBets founder sells life story to movie producer RatPac Entertainment - Jaime Rogozinski into the man every producer in Hollywood wanted to do business with. Earlier this week, the founder of Reddit’s WallStreetBets sold the rights to his life story to RatPac Entertainment. Rogozinski later said "‘Maybe I’ll get to go on the red carpet”. Read more

Fintech startups target younger audiences, investor interest in financial literacy - A growing group of fintech startups is developing child-friendly tools and resources geared at promoting financial literacy. Venture investors are increasingly getting on board, putting over $400m in the past couple years into companies offering savings platforms for children, young people and parents. Read more

FCA calls for full regulation of ‘buy now, pay later’ credit - The UK financial regulator has said “buy now, pay later” credit deals offered by online retailers via fintech companies such as PayPal and Klarna must be covered by its rules “as a matter of urgency”, because of a “significant potential for consumer harm”. Usage of BNPL products nearly quadrupled in Britain last year, taking total lending to £2.7b — with 5m people taking advantage of them since the beginning of the coronavirus pandemic. Read more

New joint venture between SWIFT, PBC fuels speculation over pursuit of globalizing China’s digital currency - The joint venture could serve as a conduit for broadening the use of the PBC's digital currency, officially called Digital Currency Electronic Payment (DCEP). Thus far, the use of DCEP has undergone trials in some cities, making China a forerunner in the launch of a state-backed digital currency. Read more

Visa to enable cryptocurrency trading - Visa’s plan is to divide digital assets into two categories: cryptocurrencies and digital currencies. For cryptocurrencies, Visa plans to work with wallets and exchanges to allow users to buy these currencies using their Visa credentials. With regard to digital currencies, these assets could find use cases in global commerce “much like any other fiat currency” and could run on public blockchains as additional networks much like RTP and ACH rails. Read more

Payoneer reaches $3.3b deal to go public with Betsy Cohen SPAC - Following its public debut, the firm plans to expand its offerings that allow businesses to transact with each other overseas, an area that’s long been dominated by pricey wire payments and paper checks. The firm also hopes to do more mergers and acquisitions of its own. Read more

Silver prices jump in GameStop-like frenzy - Futures prices for silver in New York on Monday settled at their highest level in eight years, the latest work by a loosely knit group of speculators who congregate on social-media platforms including Reddit’s WallStreetBets. Some participants have been contending aggressive buying could power GameStop-like, quadruple-digit percentage gains in other arenas, with some chatter over the weekend focusing on the roughly $50b market for silver investments. Read more

Goldman winds down Clarity Money to focus on Marcus Insights - Due to close on March 5th, the app and website wind down follows the bank’s gradual transition of Clarity Money’s “best” features to the Marcus app. This year, the plan is to launch a checking account with Marqeta, as well as an investing service, under the Marcus brand. These features would see Marcus take on both challenger banks and digital, fee-free investment platforms in one fell swoop. Read more

Robinhood raises another $2.4b from shareholders - The huge infusion—the $3.4b raised since last Thursday is more than the company has raised in total up until that point—gives Robinhood a war chest to cover a surge in collateral requirements stemming from the trading boom. It should also allow the company to support the hundreds of thousands of new accounts users opened since last week and to remove many of the trading restrictions that angered customers of the popular brokerage. Read more

The Winklevoss’ bitcoin exchange is pushing into banking with a new savings product - Gemini is adding a new service called “Earn” that lets clients move their holdings in bitcoin and other cryptocurrencies into interest-bearing accounts, offering rates of up to 7.4% APY, more than 100 times the U.S. national average. The news signals a larger move into banking from Gemini and other crypto firms, which are looking to develop more ways to lure in the uninitiated. Read more

Revenue climbs at Carta, a VC favorite now valued at $6.9b after private stock sales - According to The Information the company’s annual recurring revenue, or customer commitments to buy its software over the next 12 months, is currently around $150m, up from $50m two years ago, according to a person close to the company, noting that Carta isn’t profitable. Read more

GameStop day traders are moving into SPACs - Before 2020, trading in SPACs was muted when they made their debut on public markets. Now, shares of blank-check companies almost always go up - the last 140 SPACs to go public have either logged gains or ended flat on their opening day of trading. The gains in companies that don’t yet have any underlying business underscore the wave of speculation in today’s markets. Read more

Open Banking kicks off in Brazil - The phased implementation started this week and the model will be introduced throughout 2021. Read more

No, Bitcoin ownership is not highly concentrated – but whales are
accumulating -
Are you a "shrimp", "dolphin", or "humpback"? Galssnode analyzes the distribution of Bitcoin across network participants and shows that BTC ownership disperses over time and is much less concentrated than often reported. Meanwhile, BTC supply held by whales has recently increased, suggesting institutional investors are entering. Read more

Covid-19 pandemic motivates younger people to buy life insurance - Consumers’ pandemic shopping lists went beyond baking flour and exercise equipment in 2020. They also bought more life insurance. Applications for life-insurance policies jumped 4% in 2020 in the U.S., the highest year-over-year annual growth rate since 2001. Read more

Select Financings


Balance - San Francisco based B2B payments startup raised $5.5m in Seed funding from Lightspeed Venture Partners, Stripe and SciFi VC. Read more

CapBay - Malaysia based P2P supply chain financing platform raised $20m in Series A funding led by KK Find. Read more

Divvy Homes - San Francisco based real estate startup expanding the rent-to-own concept for prospective homebuyers raised $110m in Series C funding led by Tiger Global Management. Read more

Flink - Mexico City based consumer stock-trading platform raised $12m in Series A funding led by Accel. Read more

LeaseLock - California based insurtech platform for real estate raised $52m in Series B funding led by Westerly Winds and Wildcat Venture Partners. Read more

Lockstep - Seattle based accounting solution raised $10m in Series A funding led by Point72 Ventures. Read more

Milo - Miami based digital banking and lending startup serving global consumers raised $6m in Seed funding led by QED Investors. Read more

Monkey - Brazil based financial marketplace for receivables raised $6m in Series A funding led by Quona Capital and Kinea Ventures. Read more

Narmi - New York based digital banking tech maker raised $20m in Series A funding led by New Enterprise Associates. Read more

Quantifind - Menlo Park based provider of financial crime investigation automation software raised $22m in strategic growth funding from S&P Global, In-Q-Tel and Snowflake Ventures. Read more

Rightfoot - San Francisco based startup helping employers lift employees out of student debt raised $5m in Seed funding led by Bain Capital Ventures. Read more

Routefusion - Austin based cross-border payments company raised $3.6m in Seed funding led by Silverton Partners. Read more

Stash - New York based personal finance app raised $125m in Series G funding led by Eldridge. Read more

TrustLayer - San Francisco based startup automating the insurance verification process raised $6.6m in Seed funding led by Abstract Ventures. Read more

Valon (f.k.a. Peach Street) - New York based tech-enabled residential mortgage servicer raised $50m in Series A funding led by Andreessen Horowitz. Read more

Vested Finance - San Francisco based online investment platform that gives Indian investors access to the U.S. stock market raised $3.6m in Seed funding from investors including Moving Capital, Ovo Fund, TenOneTen Ventures, Inflection Point Ventures and Venture Catalysts. Read more


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