Published:
Oct 10, 2020
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Imagine if you were Eddie Van Halen’s understudy for years and finally became a guitar-shredding rock god in your own right. You would be likely to use the same headbanging moves that he did and even hammer the neck of your custom “Frankenstrat” guitar, but would those “moves” be copyrighted in the same way that his music is?
You are gonna have to roll with us a little bit here but APIs (application programming interfaces) are to some degree the moves, rather than the actual music. Companies access APIs to communicate with other software: AWS, Plaid, Stripe, etc. Thus, APIs are inherently designed with interoperability at their core - otherwise, they’d be unable to communicate with a plethora of programming languages.
Sitting on the desk of the Supreme Court is a lawsuit that may determine whether APIs are copyrightable. Oracle, which acquired Java - a popular programming language with a robust developer community - is suing Google for infringing on their "Java IP”. This decision’s ramifications can be huge for the fintech world, with more than 700 startups and $12.5b invested in API-led fintech startups since the beginning of 2019.
With the decision likely leaning in Oracle’s favor, and to celebrate the incredible life of Holland’s best export, outside of cheese, Eddie Van Halen’s lyrics from Jump will resonate with software developers everywhere: “You got to roll with the punches and get to what's real” as they look to build their own applications - or move their APIs to another friendly open-source programming language…
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Jump
Today’s Supreme Court hearing on a $9b case involving Oracle and Google could reshape the software industry - Oracle claims Google infringed copyright when it used elements of the Oracle-owned Java programming language to build its Android operating system, which now powers billions of smartphones and other devices. Google denies the claim, which involves about 11,500 lines of code out of millions of new lines that it wrote to create Android. Read more
Investors, founders report hot market for API startups - Speaking with founders and investors this year, it has become clear that the API model of delivering a product is more than an occasional hit-maker for companies like Twilio or Plaid. Instead, it appears that there is ample room for lots of API-powered startups to build and prosper. Read more
Industry News
Affirm files confidentially to go public - The company was valued at $2.9b at the time of its $300m Series F last year according to PitchBook data. The company’s most recent valuation is not known. How much of a step-up a $10b public valuation would be, therefore, from its final private valuation is not clear. Read more
Square buys $50m in bitcoin, says cryptocurrency ‘aligns with company’s purpose’ - Square said Thursday it bought 4,709 bitcoins, worth approximately $50m. This represents about 1% of Square’s total assets as of the end of the second quarter of 2020. Read more
Visa connects with Stripe for B2B payments - Visa has struck a deal with Stripe to enable buyers on Visa Payables Automation to pay suppliers who are unable to accept digital payments through the use of a virtual Visa card. Read more
LendingClub closing down their platform for retail investors - While LendingClub began in 2007 as 100% focused on individual investors over the years it has moved to a much more institutional investor-focused approach. This was understandable as it is difficult to originate huge loan volumes on the back of just retail investors. Read more
With $20b in deals this year, Morgan Stanley pivots further away from risky Wall Street - Now, after $20b worth of recent deals, Morgan Stanley, will get well over half its revenue from fees related to wealth and investment management – owning a mutual fund factory with $1.2t in assets and one of the world’s biggest. Read more
U.S. explores curbs on Ant Group, Tencent payment systems - U.S. officials are concerned that Ant Group and other Chinese fintech platforms will come to dominate global digital payments, the people said. That in turn could give China access to banking and personal data of hundreds of millions of people. Read more
Regulators fine Citigroup $400m over ‘serious ongoing deficiencies’ - In a consent order agreed to by the New York bank’s board, the Federal Reserve faulted Citigroup for falling short in “various areas of risk management and internal controls” including data management, regulatory reporting and capital planning. Read more
UK regulator bans sale of crypto derivatives and exchange-traded notes to retail users - The FCA said these products are “ill-suited” for retail consumers due to various reasons, including “extreme volatility” of cryptocurrencies. Read more
Macy’s takes stake in Klarna as part of payment partnership - The US department store chain has struggled to cope with the rise of online shopping and in particular the might of e-commerce giant Amazon. It is hoping for a boost from its partnership with Klarna, which is popular with younger shoppers because it allows them to receive goods and return them before paying for them. Read more
Venmo launches its first credit card, offering up to 3% cash back, personalized rewards - Cardholders will be able to track their spending in real time, organized by category, plus split or share purchases, view their cash back status, make payments and manage their card directly in the Venmo mobile app. Read more
Colombian fintechs fill Latin American banking gaps - Investors pour $1b into an industry spurred by financial inclusion and undeterred by money laundering curbs. Read more
LSE to sell Borsa Italiana to Euronext in €4.3b deal - The London Stock Exchange has agreed to sell Borsa Italiana to rival Euronext for €4.3b, clearing the way for its purchase of financial data provider Refinitiv. Read more
JPMorgan commits $30b to fight the racial wealth gap - JPMorgan Chase announced Thursday a $30b investment over the next five years that the company says will address some of the largest drivers of the massive wealth gap between black and white Americans. Read more
China’s Lufax files for US IPO against backdrop of rising tensions - Lufax, one of China’s biggest online lending platforms, has announced plans for a US IPO even as the Trump administration pushes ahead with plans to delist companies from the country. The business was valued at $39.4b in a funding round in early 2019. Read more
State of AI Report 2020 - Fascinating 177 page report on the state of Artificial Intelligence. The report considers the following key dimensions: Research, Talent, Industry, Politics, and some predictions for 2021. Read more
CME sounding out crypto traders to gauge market demand for Ether futures, options - The Chicago Mercantile Exchange (CME), the largest U.S. regulated market for bitcoin futures, has been sounding out crypto traders to gauge their interest in a listing of futures and options for the Ethereum blockchain’s native currency. Read more
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