#353
The Times They Are A-Changin’

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Sep 12, 2020


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Published:

Sep 12, 2020


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Despite the latest boom in equities, there remains some dissatisfaction amongst some startups and VC firms with the traditional IPO process. “Digital-first” has permeated our lives, but has yet to crack the piles of paperwork, lengthy roadshows, and sizable commissions/fees involved with going public. Direct listings have emerged as an option, and so have SPAC’s (June 2020 newsletter).

Alternative exchanges have surfaced as another contender. With the launch of the Long-Term Stock Exchange (LTSE) this week - roughly 9 years after its mention in the book The Lean Startup - and the Members Exchange (MEMX) next week, companies now have more alternatives for a listing venue than ever. With 13 stock exchanges already active in the US (and 97% of on-exchange flow controlled by three companies: ICE (NYSE), Nasdaq and CBOE) do we need more exchanges?

If you are interested in ESG, the LTSE is the stock exchange for you. Companies interested in listing must set up policies that adhere to certain ESG-oriented principles to be eligible. On the other hand, MEMX is all about bringing down the costs (connectivity, listing, trading) that exchanges charge ecosystem participants.

Incumbent exchanges say that they aren’t worried about the new alternatives. Afterall, the highly anticipated IEX (of Flash Boys fame) barely made a dent and had to exit the listing business altogether. But as 2020 continues to unfold, there is little doubt that the times they are a-changin’.

Portfolio News


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The Times They Are A-Changin’


New stock exchanges are ready to launch to compete for your trading dollar - There’s a spate of new stock exchanges ready to launch to compete for your trading dollar. LTSE began full trading operations this week. MEMX will begin a phased launch on Sept. 21, and the MIAX Pearl Equities, which runs three options exchanges, will debut its equities exchange on Sept. 25. Read more

Silicon Valley’s new stock exchange opens for business - The Long-Term Stock Exchange can now trade all U.S. exchange-listed stocks, and it will now start soliciting new listings from companies that commit to policies around diversity, sustainability and long-term planning. Read more

NYSE signals it will exit New Jersey if state taxes stock trades - The NYSE plans to announce that it will run one of its exchanges from a backup site in Chicago for a week as a demonstration of its readiness to quit the state. Like many other exchange operators, the NYSE runs its electronic trading systems out of data centers in northern New Jersey. Such market operators have been concerned about a bill in the New Jersey legislature that would impose a tax on firms that process large quantities of trades in the state. Read more

Industry News


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Kenyan borrowers shamed by debt collectors chasing Silicon Valley loans - Tactics, known as debt-shaming, have become highly controversial in Kenya, where a flood of small loans, once championed as a way to lift people out of poverty and enable hard-working borrowers to fund businesses or cover unexpected costs, has also created a market for unscrupulous debt collection. Read more

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Shopify, suddenly worth $117b, is one of the biggest pandemic winners - With business booming in the midst of the pandemic, e-commerce enabler Shopify is now worth more than eBay, Best Buy, Etsy, Nordstrom, Macy's, Foot Locker, L Brands and Urban Outfitters—combined. Read more

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Select Financings


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Decent - Texas based insurance startup creating affordable health plans for small businesses and self-employed professionals raised $10m in Series A funding led by QED Investors. Read more

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Descartes Underwriting - Paris based insurtech company raised $18.5m in a Series A funding led by Serena and Cathay Innovation. Read more

EverC - New York based electronic money laundering detection and prevention startup raised $35m in Series B funding led by Red Dot Capital Partners. Read more

Groww - India based investment app targeting millennials raised $30m in Series C funding led by YC Continuity. Read more

Melio - New York based business payments startup raised $80m in a Series B extension round led by Coatue and General Catalyst. Read more

Mollie - Amsterdam based payments startup raised $106m in Series B funding led by TCV. Read more

Orchard - New York based home buying and selling platform raised $69m in Series C funding led by Revolution Growth. Read more

Sana Benefits - Texas based manager of self-funded insurance plans for small businesses raised $20.8m in Series A funding from Gigafund, Trust Ventures, and Mark VC. Read more

Sumsub - London based identity verification platform that provides a technical and legal toolkit to cover KYC/KYB/AML needs raised $6m in Series A funding led by MetaQuotes. Read more

Thunes - Singapore based B2B cross-border payments network raised $60m in Series B funding led by Helios Investment Partners. Read more


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