The Times They Are A-Changin’


Sep 12, 2020



Sep 12, 2020



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

FinTech Collective invests in Oyster - We're incredibly excited to announce that we have invested in the $14m Series Seed financing round in Oyster. The company is building a challenger bank that has developed its own core banking technology platform to solve key financial pain points for sole proprietors and SMBs in Latin America. The new funding will be used to accelerate Oyster’s growth in Mexico. Read more

TradeBlock's analysis of Ethereum gas fees and DEX costs - As major decentralized exchange volume now surpasses that of centralized digital asset venues, portfolio company, TradeBlock, notes that quicker new token listings and lower regulatory barriers are behind the surge. TradeBlock also notes that annualized fees on the Ethereum network are now past $1.5b! Read more

NextCapital, Vestwell named as WealthManagement.com Industry Awards Finalists - Congratulations to portfolio companies NextCapital and Vestwell for being named as finalists in the 401(k) - Retirement Plan Support, Technology category. Now in its 6th year, the WealthManagement.com Industry Awards program recognizes the outstanding companies, individuals and organizations that make a real difference in the daily activities of financial advisors. Read more

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

Women of Wall Street ask 'who's next' after Citi picks Jane Fraser as CEO - Last year, when a group of White, male bank bosses testified before a House committee, Representative Al Green asked if they thought their successors would look any different than them. None raised a hand. Change is in the air - who is next? Read more

Verifone has acquired 2Checkout - E-commerce payments company, 2Checkout, has been acquired by global POS provider Verifone, which itself was taken private in 2019 for $3.4b. 2Checkout has more than 17,000 customers. Read more

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

Fintech can come out of the shadows - So why are New York and other states fighting the OCC’s authority to charter national banks that engage in many core banking services but happen not to take deposits? They could simply be protecting turf. Or they could be worried about losing the money they earn from licensing shadow banks? Read more

Mortgage refinancings boom, even as coronavirus hits economy - The mortgage market recorded its best quarter in years this spring, a reflection of how the housing market is booming in 2020 even as much of the economy stumbles. Lenders issued $1.1t in home loans between April and June. Read more

Fidelity Investments applies its proven Peter Jubber to its unproven bitcoin unit and its launch of Fidelity Digital Funds - By launching Fidelity Digital Funds under an 18-year seasoned exec, the Boston giant is signaling no let-up by putting something scarcer than capital into the crypto-pot -- its seasoned talent. Read more

Why are European banks merging? Badwill hunting? - If European banks want to catch up with American and Chinese ones, they must push for consolidation to improve their return on capital and help them make the big investments in technology platforms and data analysis required to keep up with digitization. An ECB accounting change could help encouraging some of these new alliances. Read more

Mastercard launches digital currency kit for central banks - Mastercard's platform—or "sandbox" in tech parlance—will let central banks issue digital versions of their currency in a controlled environment, and test how those currencies plug into existing bank and payment networks, and to see if they are practical for consumers to buy goods and services. Read more

Robo-advisers make slow progress gaining ground with investors - Robo-advisors collectively managed $631b in assets in the US as of June 30, or 13% more than they did a year ago, according to Backend Benchmarking. Use is highest among millennials and so-called Generation X households (those born between the mid 1960s and early 1980s), with 13 percent and 10 percent respectively enrolled. Read more

Klarna’s value hits $10b with latest investment round - The Stockholm based company is currently in talks with investors, aiming to raise $500m as it looks to fuel the expansion of its growing digital payments and online shopping business in the U.S. market, a new report states. The $10b figure represents a near-doubling in the company’s value, with Klarna previously weighing in at $5.5b in August of 2019. Read more

Blockchain services firm Diginex is going public - The Hong Kong based digital asset exchange and operator is merging with publicly traded 8i Enterprise Acquisition Corp, a British Virgin Island SPAC, as it plans to list on the Nasdaq later this month. Read more

Apple Pay eyeing QR code transactions - Since its launch, Apple Pay transactions at brick-and-mortar retailers relied on NFC and an iPhone near the payment terminal to make a contactless purchase. While these transactions are routine, the NFC method isn’t the only way Apple envisioned how to communicate the payments. While QR codes have been commonplace for years, their use has faded amid tech solutions. But COVID-19 has given new purpose to it as a way to enable touchless commerce. Read more

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

Digital Currency Group reveals acquisition of Bitcoin and crypto exchange Luno - DCG has acquired the London-based but emerging market-focused bitcoin and cryptocurrency exchange Luno for an undisclosed sum. Luno has 5m users in 40 countries and said it has seen record growth of its customer base in 2020. Luno has regional offices in Malaysia, Nigeria, Indonesia, and South Africa, reflecting its emerging market focus. Read more

How programmable digital assets may change monetary policy - The high velocity of digital assets as programmable money, and/ or as a security that can be pledged as collateral, offer a way for central banks to rely less on traditional money metrics as a monetary policy tool; if this holds true when applied to traditional finance, then what’s old in monetary policy may become new again. Read more

Select Financings

BIMA - London and Stockholm based provider of life and health insurance policies raised $30m in growth funding led by CreditEase’s Fintech Investment Fund. Read more

Capitolis - New York based startup that seeks to help banks use capital more efficiently raised $11m in Series C funding from JPMorgan Chase, Citigroup and State Street. Read more

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

Deel - San Francisco based payroll and compliance platform for international teams raised $30m in Series B funding led by Spark Capital. Read more

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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