#388
Recovery Mode

Published:

May 22, 2021


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Published:

May 22, 2021


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With governments stepping in across the world with stimulus bills over the last year - some are finally taking a step back as some economic indicators recover (but at different rates across markets).

Meeting minutes released by the Fed this week reignited the tapering conversation of its bond purchases. The Fed's balance sheet is just shy of $7.9t, twice the pre-pandemic size. Though no timetable was presented, it seems like a reduction in purchases is feasibly ahead. Across the world, New Zealand just announced that its post-Covid recovery has exceeded expectations, enabling it to spend considerably on its low-income population.

Meanwhile, some two dozen African heads of state gathered in Paris this week to discuss the pandemic's immense economic burden on the continent. This brings to light the stark contrast in the pace of recovery across economies worldwide, when comparing developed and emerging markets. Thailand just became the fourth of six major Southeast Asian economies to declare a yearly economic contraction in Q1 2021. Not to mention Covid-ravaged India, whose GDP forecasts have been recently trimmed by at least four leading rating agencies.

Despite - or perhaps because - of these realities, the potential for fintech in emerging markets has continued to become clear in 2021. This week saw Gojek and Tokopedia - Indonesia's two biggest startups - announce merger plans. The combined entity will leverage partnerships with 20+ banks and financial institutions. Reports have also indicated that India's fintech industry could grow to $150b over the next five years.

The sprawling urban hubs in emerging markets draw a fine line between chaotic and exciting. Prosperity is the aspiration of millions, and tech has made it more accessible, which makes it attractive. So is crypto, but maybe too exciting for some after this week...

Portfolio News


Is MoneyLion building the first open U.S. bank? - Portfolio company MoneyLion's CEO - Dee Choubey - was featured in an interview by American Banker, where he shared his views on MoneyLion's future, and that of finance at a broader level. Read more

Silicon Valley Bank and FinTech Collective host webinar on fintech in Latin America - FTC investor Carlos Alonso Torras was featured in the session, alongside portfolio company minu's co-founder and CEO - Nima Pourshasb - and SVB's Annie DeStefano and Julia Figueiredo. Read more

Basketball Africa League and Flutterwave announce multiyear partnership - The BAL announced a multi-year partnership with Flutterwave that makes the payments technology company its associate partner. The inaugural BAL season tipped off this week in Kigali, Rwanda, with 12 teams from across the continent. Read more

Recovery Mode


The Fed hinted it could reconsider easy policies if economy continues rapid improvement - Fed officials at their April meeting said “it might be appropriate at some point” to consider tapering asset purchases if the economy shows “rapid progress,” according to the meeting minutes. Read more

The second wave of Covid-19 has dampened economic optimism for India - At least four leading rating agencies have trimmed their GDP growth forecasts for India for the financial year ending March 2022. Read more

Macron hosts Africa summit on post-COVID-19 economic recovery - With some two dozen African heads of state and financial institutions attending, the agenda of the gathering is to provide assistance for the continent. Read more

Industry News


CaixaBank taps into European Innovation Council network of startups - The European Commission's main agency for supporting innovation, the EIC, funds or subsidies more than 5000 firms. Caixa Bank's Payments & Consumer unit has handpicked several of these to work with on pilots for useful projects at the bank. Read more

Bank of America will raise its minimum wage to $25 by 2025 - Last month, Biden also signed an executive order lifting the minimum wage for federal contract workers to $15 in early 2022 from the current level of $10.95. Read more

Chile’s fintech hub goal hindered by regulatory delays - The rapid growth of Chile’s fintech ecosystem has driven interest in promoting the country as a Latin American hub for financial technology. But industry players say the country needs to improve the regulatory framework to reach that goal. Read more

China reiterates crypto bans from 2013 and 2017 - The three entities published a note Tuesday confirming bans originally implemented in 2013 and 2017 that bar financial and payment institutions from providing any services related to cryptocurrency transactions. Read more

Klarna eyes U.K. finance rules as factor in blockbuster IPO - Europe’s most valuable startup, Klarna Bank AB, said its decision on whether to move ahead with a blockbuster listing in London hinges on the U.K. government’s post-Brexit financial services regulation. Read more

OCC chief signals new direction on bank supervision, fintech policy - The new head of the Office of the Comptroller of the Currency warned that some banks are taking undue risks and signaled a more conservative approach than his predecessors toward fintech firms seeking national bank charters. Read more

SIA CloudNet connects hosted applications to major payment networks - Italy's SIA has launched a dedicated connection channel to major payments networks for banks running applications hosted by top cloud providers, such as AWS and Microsoft Azure. Read more

The US Treasury wants every crypto transfer larger than $10,000 to be reported to the IRS - "As with cash transactions, businesses that receive crypto assets with a fair-market value of more than $10,000 would also be reported on," The Treasury Department said. Read more

European Central Bank castigates banks over instant payment fees - The European Central Bank has warned that the charges levied by banks for instant payments are proving a barrier to uptake and "must change". Read more

Select Financings


&Open - Ireland based corporate gifting platform raised $7.2m co-led by First Round Capital and LocalGlobe. Read more

Copper - UK based cryptocurrency custody firm raised $50m in Series B funding co-led by Dawn Capital and Target Global. Read more

DailyPay - New York employees and contractors wage access platform raised $175m led by Carrick Capital. Read more

Extend - San Francisco based provider of extended warranty plans raised $260m in Series C funding on a $1.6b valuation led by Softbank Vision Fund 2. Read more

Figure - San Francisco based consumer lending and blockchain platform raised $200m at a $3.2b post-money valuation co-led by 10T Holdings and Morgan Creek Digital. Read more

Found - San Francisco based banking and tax platform for the self-employed raised $12.8m in Series A funding led by Sequoia Capital. Read more

Jerry - California based online car insurance brokerage raised $28m in Series B funding led by Goodwater Capital. Read more

Merge - San Francisco based B2B API integrations platform raised $4.5m in Seed funding led by NEA. Read more

Lithic (fka Privacy.com) - New York based developer of virtual debit cards raised $43m in Series B funding led by Bessemer Venture Partners. Read more

Pento - London based payroll automation startup raised $15.6m in Series A funding led by General Catalyst. Read more

Pine Labs - India based merchant payment and commerce platform for Southeast Asia raised $285m in venture funding Baron Capital Group, Duro Capital, Marshall Wace, Moore Strategic Ventures, and Ward Ferry Management  Read more

Pipe - Miami based B2B financing platform for SaaS companies raised $100m in venture funding at a $2b valuation led by Greenspring Associates. Read more

Rally - New York based alternative assets platform for retail investors raised $30m in Series B funding led by Accel. Read more

Settle - San Francisco based provider of cashflow management solutions raised $15m in Series A funding led by Kleiner Perkins. Read more

Thunes - Singapore based cross-border payments network for emerging markets raised $60m in Series B funding led by Insight Partners. Read more

Telda - Egypt based consumer digital bank raised $5m in pre-Seed financing led by Sequoia. Read more

Trade Republic - Germany based trading app raised $900m in Series C funding at a $5b valuation led by Sequoia Capital. Read more

Vise - New York based investment portfolio management platform raised $65m in Series C funding led by Ribbit Capital. Read more


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