#361
The Show Must Go On

Published:

Nov 07, 2020


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Published:

Nov 07, 2020


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With all eyes on the Presidential race, it is easy to forget many of the other things that get decided on election day-turned-week.

Propositions on gig-worker classification, cannabis legalization and sports betting were on ballots across the US. For some lucky few in Maryland, Louisiana and South Dakota, even if you can’t go to the game, you can now bet on your favorite team - as prop measures to legalize sports betting were approved in all three states.

Legal sports betting in the US has gone from zero to 25 states in fairly short order and is now a legitimate nationwide industry. However, the process is not frictionless, as many of the largest incumbent banks are still not willing to allow debit and credit transactions. Fifteen states have now legalized cannabis, but there is no widespread banking or payment solution available.

Despite that, there’s plenty of activity at the intersection of sports and fintech. Betting websites like Fanduel and Draftkings have to innovate out of necessity - as payment decline rates and chargebacks are high, and most big banks still won’t support transfers. Brooklyn Nets star Spencer Dinwiddie securitized his own contract on blockchain. Soccer [football] clubs around Europe are increasingly turning to virtual “fan tokens” to raise money and enhance fan engagement. A team in Brazil is using tokens for player transfers. And this is only the beginning.

While sports arenas have been nobly repurposed as polling sites and ballot drop-off centers during this election, goodwill does not equate to increased revenue, and sports teams need to creatively make up for the shortfalls. After all, we’ll know the election results sooner than later, and then we can get back to betting on more predictable races like dog vs human go-cart racing!

Portfolio News


Creating an African fintech giant — Olugbenga Agboola, co-founder & CEO of Flutterwave - Fintech in Africa is rapidly evolving and GB is excited about the road ahead. He is particularly bullish on the future of digital banking, investment platforms, and regulatory tech and can point out several impressive entrepreneurs building fintech startups that will revolutionize the region, “The Building blocks are being built by entrepreneurs across the entire continent and they are scaling across borders.” Read more

Extend’s new platform and SOC 2 certificate will revolutionize the user experiences and internal controls of virtual cards - Extend’s core digital payment infrastructure is already compatible with major card networks and partnered with a number of bulge bracket banks helping quickly transform the $1.6t U.S. corporate card industry and tapping into the $864b US gig economy. Read more

Extend joins the Wells Fargo startup accelerator - Andrew Jamison, Extend CEO and co-founder said “We are delighted to team up with Wells Fargo given their large portfolio of small to mid-sized businesses. We look forward to working together to explore new payment capabilities that to date have only been available to the largest corporate clients. With easy onboarding, intuitive user experience, and strong controls associated with virtual cards.” Read more

Antler is strengthening its global platform in Central Europe with launch of Berlin office - Following the Covid-19 crisis and the lockdowns that have followed, venture capital investment is down across Europe. Investment in Germany is down 19% compared to the same period in 2019, yet the pace is picking up again in Q3 2020. Given these signs of recovery, Antler believes that the future remains bright for early-stage technology, and has now opened a new Berlin office. The plan is to invest in over 160 start-ups over the next four years across Central Europe. Read more

Vestwell publishes the results of its 2020 Retirement Trends Survey - In August 2020, portfolio company Vestwell conducted a survey of financial advisers across the industry to gauge their perception of record keeping technology and the challenges of selling and servicing in the SMB retirement space. Results were published earlier this week. Read more

The Show Must Go On


Voters in six states give COVID-battered gambling business a big boost - Legal sports betting has literally gone from zero to 25 in the United States in just 2-1/2 years, as Louisiana, Maryland and South Dakota voters this week passed ballot initiatives that will allow residents to place bets on teams and events. At the same time, Colorado, Nebraska and Virginia approved measures that would expand casino gaming, in what amounted to a six-for-six sweep at the ballot box for gambling. Read more

Cannabis and gambling: State ballot measures that matter to banks - While banks are more open to clearing in-person betting transactions, the hope in the gaming industry is that as more states legalize sports gambling, more financial companies will be on board with allowing their cards to be used for online wagers. Read more

Brazilian soccer team to launch blockchain tokens for player transfers - The cryptocurrency market for sports is expanding significantly in Brazil and elsewhere. Most of the blockchain solutions adopted by clubs aim to increase fan engagement with the organization and offer products or services that serve as another form of interaction. Recently, Socios.com said it would launch Fan Tokens with MMA, Dapper Labs launched NBA’s Top Shot blockchain app, and PSG signed with Sorare for blockchain collectibles. On the other hand, Vasco’s project is more focused on using tokens as a means to raise funds and enable regular fans and the public to invest in the club. Read more

Industry News


Inside the chaotic unraveling of Jack Ma’s $35b IPO - It was Monday morning in Beijing, and Jack Ma had been summoned to a conference room at the China Securities Regulatory Commission just days before he was set to take Ant Group Co. public in the biggest stock-market debut of all time. When the bureaucrats finally turned up, they skipped over pleasantries and delivered an ominous message: Ant’s days of relaxed government oversight and minimal capital requirements were over. The meeting ended without a discussion of Ant’s IPO, but it was a sign that things might not go as planned. Read more

Australia’s central bank announces CBDC project with ConsenSys - As part of the research, the RBA wants to develop a proof-of-concept (POC) for the issuance of a tokenised CBDC for “wholesale market participants”. It cites a digital currency used for the funding, settlement and repayment of a loan which can also be issued on an Ethereum-based ledger. Read more

The 2020 elections are boosting crypto prediction markets - Prediction markets, where users can bet on the outcome of future events, are a key application of decentralized finance, which allows users to conduct financial transactions on a blockchain without a middleman. Elections and political debates attract high numbers of traders to these platforms and seem to attract new users to crypto betting platforms as well. Read more

PayPal details its digital wallet plans for 2021, including crypto, Honey integration and more - During its third-quarter earnings call, the company said it plans to roll out substantial changes to its mobile apps over the next year to integrate a range of new features, including enhanced direct deposit, check cashing, budgeting tools, bill pay, crypto support, subscription management, buy now/pay later functionality and all of Honey’s shopping tools. Read more

Nexi and Nets in exclusive talks to create EU payments powerhouse - Merging with private equity-backed Nets would give Milan-listed Nexi access to advanced digital payments markets in northern Europe, where the Scandinavian group has a leading position, as well as exposure to central and eastern Europe which offers growth potential. Read more

Fintechs take on banks at their own game - Approval by regulators at the Office of the Comptroller of the Currency has opened an avenue for start-ups to compete with banks on a more level playing field, as they vie for a slice of the nearly $16t in deposits & $100t in annual payments in the US banking system. Read more

Facebook’s WhatsApp gets green light to expand mobile payments in India - The National Payments Corporation of India, or NPCI, said late Thursday that WhatsApp can bring the service to a maximum of 20m users. That is up from the one million cap that has been in place since the encrypted messaging platform in February 2018 began offering payments via its app in a trial service, the first of its kind. Read more

Mexican bank Banorte is transforming its cross-border payment infrastructure amid huge industry upheaval - The payment platform that Banorte used until February “is incomparable” to the one they have today. The pandemic drove an unexpected growth in remittance transfers, new challenges for commercial customers, and a growing need to understand the behavior of its users. Read more

Brazil's Itau mulls XP brokerage stake spin off; earnings fall - Brazil's Itau said it has been considering spinning off most of its 46% stake in investment platform XP Inc and selling the rest, according to a securities filing on Tuesday. Read more

US seized more than $1b in Silk Road–linked bitcoins, seeks forfeiture - The news comes days after blockchain intelligence firm Elliptic reported that a wallet possibly belonging to the Silk Road marketplace moved almost $1b worth of bitcoin earlier this week. This was the first transaction from the address since 2015. Read more

Digital payment volumes are surging as lockdowns prompt consumers to do more shopping online - Investors can be an ornery lot. Just ask PayPal. The $220b US payment group has just reported its strongest quarterly revenue growth in history. The market responded by wiping up to 6% off PayPal shares. The bar for payments companies is now set exceptionally high. Read more

Lightspeed to acquire ShopKeep to accelerate digital transformation of SMBs across the United States - COVID-19 is forcing independent businesses to urgently replace legacy point-of-sale systems in order to remain operational and safely adapt to evolving consumer behaviors. The scale achieved by the combination of Lightspeed and ShopKeep presents retail and restaurant business owners in the US with enhanced resources to pivot their operations. Read more

SEC changes crowdfunding regulation - Entrepreneurs can raise up to a certain amount of their securities without having to register the transaction with the SEC. Before, that amount was $1.07m, and now it’s $5m. This amendment comes after there’s been more conversation around expanding opportunities to invest in startups. Last month, the SEC changed another rule, expanding its definition of an accredited investor. Read more

Worldline completes $8.6b acquisition of Ingenico - A major reason behind the acquisition is Ingenico’s merchant acquiring business in the US. North America is a geography in which Worldline lacks a major presence, so the deal gives it an immediate foothold in the market. Following the acquisition closure, Worldline is now the largest European player in payment services. Read more

New York City tech startups rethink their office space and culture - New York City tech startups are reacting to the workplace upheaval caused by COVID by subletting their spaces, breaking their leases and negotiating lower rents. Read more

How to fix the market for Treasury bonds - Since the start of April the US Government has raised a net $3.3t to fund its stimulus programmes. There is a danger that America’s financial plumbing cannot cope. Read more

Select Financings


3Commas.io - Estonia based crypto-asset management platform raised $3m in Series A funding led by Alameda Research. Read more

Arcus - New York based fintech-as-a-service platform raised an undisclosed amount of new funding from Citi Ventures. Read more

Fast - San Francisco based maker of a way to checkout quickly online is in talks to raise between $50m and $200m, valuing it at as much as $1b. Read more

Marshmallow - U.K. based auto insurance startup raised $30 million in Series A funding led by Outrun Ventures. Read more

Osome - Singapore based startup offering small and medium businesses an accounting and compliance “super app” raised $3m in new funding led by XA Network and AltaIR Capital. Read more

Teampay - New York based spend management platform raised $5m in Series A-1 funding led by Fin Venture Capital. Read more

Vivid Money - Germany based challenger bank raised €15m in Series A funding led by Ribbit Capital. Read more


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