Competition in the point-of-sale lending market is heating up! Fintech companies like Affirm (~$3b valuation as of last week), Klarna (~$3.6b valuation), Greensky (~$2.8b market cap), and Bread (~$70m+ raised) have led the way – especially for big-ticket purchases like mattresses, furniture, electronics, or home improvement products.
However incumbent payments and credit companies are quickly entering the space. This week, MasterCard acquired fintech startup Vyze – marking the credit card behemoth’s initial foray into POS lending. Moreover, Chase and American Express are competing for these customers with new, low-cost options that allow people to finance select credit card purchases over a longer period.
The competition may continue to increase given the size of the prize – with an estimated $1.8 trillion POS lending opportunity in the U.S. alone (according to Accenture). Lenders relish distribution at the point-of-sale, where there are no variable customer acquisition costs. Merchants are attracted to financing options that can improve checkout conversion, while offering consumers flexibility on how and when they pay.
Despite the incredible growth of this market, let’s all remember that it is easy to give money out but far more difficult to collect it back profitably. Don’t get over your skis!
How Embroker makes it easier to insure businesses - Portfolio company Embroker had a banner year in 2019, with more than $1b in a liability coverage provided to technology companies. The company's revenue tripled across its customer base of more than 2,500 companies. Read more
Dharma Markets Report #6 - Trading Strategies in #DeFi - Trading is integral to any well functioning capital market. Dharma explores the projects and players who are helping bring liquidity and price discovery to an immature and inefficient market in cyrptocurrency - and getting paid handsomely for it! Read more
Vestwell to add multi-manager target date model portfolios from Morningstar investment management - Portfolio company Vestwell is expanding the asset management options on its platform with exclusive target data model portfolios from Morningstar. Vestwell's proprietary recordkeeping and model management technology form a flexible and open architecture. Read more
Point Of Success
JPMorgan Chase enters a hot fintech space: point-of-sale (POS) financing - The new 'My Chase Plan' financing option allows card customers to select from past purchases of more than $500 and finance them over a longer period with monthly fees, rather than interest-based repayments. Read more
Mastercard redefines choice at checkout with acquisition of Vyze - With the acquisition, Mastercard will now offer new installment loans as it competes in the now crowded $1.8t opportunity in point-of-sale financing in the US. Read more
SoFi announces partnerships to expand insurance offering - SoFi has been expanding its financial services and product offerings to surround its customers - it now will be providing homeowners and renters insurance through Lemonade and auto insurance through Root. Read more
Binance Chain launches, firm expects to execute mainnet swap on April 23 - The Asia based cryptocurrency exchange has announced its own blockchain, building a basis for issuing new cryptocurrencies and initial coin offerings. Binance Chain Explorer and Web Wallet is now available to selected partners in beta testing mode. Read more
New study: Challenger banks overtake traditional banks in customer satisfaction - In four telling charts, TearSheet shows how digital-first banks have leapfrogged the top 50 global banks in terms of overall customer satisfaction. With 63% of challenger banks customers "extremely satisfied" and 73% of all consumer interactions with banks in the US done digitally, the secular trend has been solidified. Read more
Real estate startup Reali acquires online lender Lenda, launches Reali loans - The vertical integration of the home buying transaction continues as startups look to reimagine the buying experience with a full stack experience. The Reali acquisition of Lenda follows on the back of Zillow's acquisition of Mortgage Lenders of America (now Zillow Home Loans). Read more
LendIt Fintech USA 2019 slide presentations now live - Did you miss this year's LendIt in SF? If so, we have you covered as the slide presentations are now live on the LendIt blog. Read more
Swedish tech unicorn Klarna could explore IPO sooner than later- After securing a Swedish banking license and announcing its plans to expand into new countries in 2019, Klarna's CEO now sees a quicker path to potential public listing for the ecommerce lender who was valued at more than $2bn in its last funding round. Read more
Cytora - UK based AI-driven insurance automation platform has raised a £25 million Series B led by EQT Ventures. Read more
Pilot - San Francisco based bookkeeping service has raised a $40m Series B led by Index Ventures with participation from Stripe. The round values Pilot at $355m. Read more
Returnly - San Francisco based ecommerce payment creditor has raised $19m Series B funding led by Craft Ventures with participation form Max Levchin. Read more
Unqork - NYC based platform to help financial institutions digitize customer workflows has raised a $22m Series A led by Goldman Sachs. Read more
FinTech Collective Newsletter
“If you're in fintech and you don't get the @fintech_io newsletter, you're not really in fintech. Pure Gold.” — Jase Wilson, CEO, Neighborly (@jase)
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.