#277
Separation Anxiety

Published:

Mar 02, 2019


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Published:

Mar 02, 2019


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As merchants bring their businesses online, they need to accept consumer payments, extend loans to potential purchasers, and even provide insurance. As a result, in many emerging markets regions such as Latin America and Southeast Asia, the development of the fintech scene has occurred in tandem with the rise of e-commerce platforms.

But when does it make sense for these fintech payments plays to break apart from their ecommerce counterparts?

Investors in LatAm ecommerce giant, MercadoLibre, are asking just that.

MercadoLibre’s payments businesses, MercadoPago, is driving a tremendous amount of growth with payments transactions up 72% year over year, to a total payment volume (TPV) of $5.3bn. And off-line payments are now overtaking the on-platform business, as e-commerce sites and brick-and-mortar retailers adopt MercadoPago as the preferred payment method.

The path for the payments darling to split from the e-commerce anchor was paved long ago when investors and analysts initiated PayPal’s split from Ebay in 2015. While hitched to Ebay, PayPal fell behind in smartphone-based payments. But following the split, PayPal flourished, adding nearly $65b of enterprise value to the standalone company.

While a break up is never easy, sometimes it’s just the right thing for everyone….

PORTFOLIO NEWS


MoneyLion is bringing attention to America's gender pay gap - Portfolio company MoneyLion's "PaveTheWage" pledge of $3m will see the company adding 17% to the first paycheck deposited into a MoneyLion Checking Account. The pledge is in advance of International Women's Day on March 8. Read more

The retirement market offers a $28 trillion opportunity - Josh Brown, CEO of Ritholtz Wealth, sat down with Vestwell's Aaron Schumm to discuss how advisors can leverage the right tools to take advantage of market opportunities. Read more

Payroll doesn't have to be a pain point for your retirement plan - Portfolio company Vestwell has partnered with OnPay, a payroll software company, to give plan sponsors access to a seamless data flow between their payroll and retirement plan providers. Read more

SEPARATION ANXIETY


Ebay is dumping Paypal for its Dutch rival - Ebay, one of the world's biggest online marketplace, dropped PayPal as its main partner for processing payments in favor of Dutch company Adyen. Read more

Is MercadoLibre the new PayPal? Analysts wonder as payments jump - MercadoLibre, the leading ecommerce provider in Brazil, is quickly evolving as a payments and fintech company. Their payments product MercadoPago is following in the footsteps of PayPal and Alipay - with more payments now "off platform" than on MercadoLibre itself. Read more

INDUSTRY NEWS


Ping An plans IPO of fintech unit at $8b valuation - Ping An's OneConnect provides cloud computing and other technology services to small- and medium-sized financial institutions. It’s partnered with more than 460 banks as well as over 1,800 other financial services firms. Read more

SoFi to roll out crypto trading via partnership with Coinbase - SoFi Invest will now allow for buying, selling, and price monitoring of cryptocurrencies. This is in addition to its recent announcement of two exchange traded funds and a credit card. Read more

Walmart teams with Affirm to offer point-of-sale loans - Walmart's partnership with Affirm will allow it to offer POS loans at its nearly 4k US stores and on its website. The instant loans will be 6 to 12 months and will finance purchases that range from $150 to $2000. Read more

Millennials are facing $1 trillion in debt - With 19 to 29 year-olds now saddled with more than $1 trillion in debt, and the majority comprised of student loans, policymakers are struggling to find answers on how to ensure the generation continues to drive economic growth. Read more

Pangea Blockchain fund debuts with $22m supported by Roger Ver - Switzerland based Pangea Blockchain Fund has announced it has raised $22m with investors that include Bitcoin.com CEO Roger Ver and Copernicus Asset Management for its inauguaral fund focused on blockchain solutions. Read more

Wearable payments are finally starting to take off in the U.S. - Target, Costco, and other brands are increasingly embracing contactless payment methods, opening the opportunity for wearables to become payment mediums. Read more

Bitcoin retail investor holdings continue incremental growth - Diar Research shows that while a majority of circulating supply that sit in public addresses that hold between 10 and 1000BTC have been net sellers over the past year, addresses holding between 1 and 10 Bitcoins continue to grow steadily. Read more

Square sold more than $166m worth of bitcoin in 2018 - Despite crypto winter, Square's cash App has seen steady increase in bitcoin purchased (Q4 purchases up ~70 percent since Q3, and 200 percent since Q1) by its 15m users. Read more

Government probes Fidelity over obscure mutual-fund fees - The Dept. of Labor is investigating Fidelity for fees charged to some mutual funds. The "infrastructure fee" appears to be a way for Fidelity to make up for revenue the firm has lost as a result of investors flocking to reduced-cost mutual funds. Read more

FINANCINGS


Beam - SF based compliance software platform has raised $9m in Seed and Series A financing from Canaan and Greycroft. Read more.

Better Mortgage - New York based digital mortgage lender has raised a $75m Series C from American Express Ventures, Kleiner Perkins, Goldman Sachs and others. Read more

CoinMetrics - Boston based provider of crypto data to institutions has raised $1.9m in equity funding led by Castle Island Venture. Read more

Figure - San Francisco based blockchain company led by former SoFi CEO Mike Cagney raised $65m in Series B funding led by RPM Ventures and DST Global. The valuation on the round was $365m. Read more

Socotra - San Francisco based insurance core platform has raised $5.2m in incremental Series A financing from 8VC, Nationwide, and MS&AD Ventures. Read more

Solidus - New York based machine learning powered trade surveillance for digital assets has raised $3m in Seed funding from Hanaco Ventures. Read more

The Guarantors - New York based rental insuretech startup has raised $15m in Series B capital from Global Founders Capital. Read more

YieldStreet - New York based alternatives investment platform has raised a $62m Series B led by Edison Partners. Read more


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