Happy 4th!

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Happy 4th July to my American readers! I hope you are staying safe and enjoying yourselves.

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Funding ๐Ÿ’ธ

There were 36 deals in the fintech space across the US and Europe with a total investment of $1bn. Some highlights are below.

๐Ÿ‡ช๐Ÿ‡บ Imburse raised a โ‚ฌ10m Series A from Addition, Gramercy Ventures, Accenture Ventures, Lakestar, SixThirty Ventures and PostFinance AG.

๐Ÿ‡ช๐Ÿ‡บ Deutsche Borse Group acquired a majority stake in Crypto Finance AG.

๐Ÿ‡ช๐Ÿ‡บ neon raised ยฃ3.9m in an hour via crowdfunding.

๐Ÿ‡ช๐Ÿ‡บ Nuri raised โ‚ฌ9m led by Earlybird Ventures and included Coparion and DIP Capital.

๐Ÿ‡ช๐Ÿ‡บ Itsme raised โ‚ฌ24.7m from Federal Holding and Investment Company.

๐Ÿ‡ฌ๐Ÿ‡ง Codat raised a $40m Series B led by Tiger Global and included Index Ventures and PayPal Ventures.

๐Ÿ‡ฌ๐Ÿ‡ง Rapyd is acquiring Icelandic payments company Valitor.

๐Ÿ‡ฌ๐Ÿ‡ง SmartPension raised a $232m Series D from Chrysalis Investments.

๐Ÿ‡บ๐Ÿ‡ธ Accept raised $90m in debt and equity from DN Capital, YC and SignalFire.

๐Ÿ‡บ๐Ÿ‡ธ Kikoff raised a $30m Series B from Coatue, Core Innovation Capital, Lightspeed Ventures, Portage Ventures and GGV Ventures.

๐Ÿ‡บ๐Ÿ‡ธ Orum raised a $56m Series B led by Accel and Canapi Ventures which also included Acrew, Bain, BoxGroup, Inspired, Primary Venture Partners, and more.

๐Ÿ‡บ๐Ÿ‡ธ Tomo raised a $70m seed round led by Ribbit Capital and included NFX, SVB Capital, DST Global, and angel investors.

๐Ÿ‡บ๐Ÿ‡ธ Paceline raised a $30m Series A led by Acrew Capital and included Propel Venture Partners, Mubadala Capital and others.

๐Ÿ‡บ๐Ÿ‡ธ Harness Wealth raised a $15m Series A led by Jackson Square Ventures and included Bain Capital, Firstminute Capital and others

๐Ÿ‡บ๐Ÿ‡ธ Karat raised a $26m debt & equity Series A led by GGV Capital.

๐Ÿ‡บ๐Ÿ‡ธ Wells Fargo acquire a stake in Theta Lake.

Challenger Banking ๐Ÿš€

๐Ÿ‡ช๐Ÿ‡บ MobilePay, Pivo and Vipps are banding together to create a single payments app with 11m customers across the Nordics.

๐Ÿ‡ช๐Ÿ‡บ Pilant has released a corporate credit card to ensure carbon neutral travel.

๐Ÿ‡ฌ๐Ÿ‡ง Revolut is giving users points for completing challenges which will then be used to enter weekly prize draws. The company plans on giving away ยฃ250,000 over four weeks.

๐Ÿ‡ฌ๐Ÿ‡ง Tide is committing ยฃ100m in expanding internationally to India.

๐Ÿ‡บ๐Ÿ‡ธ Robinhood released its S-1 the same day that it was ordered to pay a $70m fine by FINRA for giving customers misleading information, having system outages and approving customers for options trading when it wasnโ€™t appropriate. This comes after a $65m SEC fine in December. One of my favourite Twitter accounts, John Street Capital, has the breakdown above of the S-1.

  • ๐Ÿ™Œ๐Ÿป FATP Take - Marc Rubinstein has a great insight into the debt Robinhood issued earlier this year at the height of the GameStop saga (scroll to hear the end). Gary Gensler was cited in the S-1 as a risk as to the conflict of interest with PFOF, something Europe has largely banned already.

Digital Assets โ‚ฟ

๐Ÿ‡ช๐Ÿ‡บ Germanyโ€™s new Fund Location Act allows institutional investment vehicles to invest up to 20% in crypto, which could trigger as much as $415bn in flows.

๐Ÿ‡ฌ๐Ÿ‡ง Binance is claiming that the FCAโ€™s recent action against it โ€œhas no direct impact on the services provided by Binance.comโ€. Additionally, the Cayman Islands Monetary Authority is looking if it falls within their regulatory purview after saying it was not authorised to do business there. Thailand has also piled on saying Binance isnโ€™t authorised and Singapore is closely watching.

  • ๐Ÿ™Œ๐Ÿป FATP Take - Digging deeper it seems Binance wasnโ€™t regulated in the UK anyway, but had acquired a UK subsidiary and had applied to register with the FCA. So UK residents can still buy and sell crypto but the on-ramps are being impacted with UK customers reporting to have been cut off from the Faster Payments rails for withdrawals from Binance. Itโ€™s unlikely Visa and Mastercard will not help them out either.

๐Ÿ‡ฌ๐Ÿ‡ง TP ICAP is launching a crypto trading platform for institutions through partnerships with Fidelity Digital Assets, Zodia Custody and Flow Traders.

๐Ÿ‡ฌ๐Ÿ‡ง Former Governor of BoE Mark Carney said stablecoins should have access to central bankโ€™s balance sheet if they meet a number of requirements

  • ๐Ÿ™Œ๐Ÿป FATP Take - Whilst comments like this are encouraging, would he have said this while he was still governor? My guess is no and it is more a personal view and not one that is likely to impact any action by BoE (sadly!). He wants strong capital and liquidity requirements for stablecoins.

๐Ÿ‡บ๐Ÿ‡ธ Jack Dorsey said Tidal is interested in exploring NFT opportunities in an unsurprising move after Square acquired a majority stake this year. Tidal could be another entry point for Square into the crypto world with its artists creating new ways to distribute and monetise their art forms.

๐Ÿ‡บ๐Ÿ‡ธ ARK Investment Management has applied to the SEC to create a bitcoin ETF through a partnership with 21Shares.

๐Ÿ‡บ๐Ÿ‡ธ Tom Brady and Gisele Bundchen are becoming brand ambassadors for FTX, with both getting equity in the company and signing bonuses paid in crypto.

  • ๐Ÿ™Œ๐Ÿป FATP Take - Two of my favourite things coming together, Tom Brady and crypto. You just love to see it. This is only one piece of sports + crypto news recently. FTX has also sponsored Miami Heatโ€™s stadium, MLB and an e-sports team. Crypto.com is also sponsoring Formula 1. Also with recent changes by NCAA allowing college athletes to monetise their name, image and likeness (NIL), college sports starts are being courted by all the fintechs so export more fintech/crypto + sports tie-ups. H/T to Joe Pompliano

๐Ÿ‡บ๐Ÿ‡ธ Coinbase is to start offering savings accounts with 4% interest on USDC deposits. Compound is launching savings accounts for institutions to access the Compound Protocol with Current announcing a partnership.

Traditional Banking ๐Ÿฆ

๐Ÿ‡บ๐Ÿ‡ธ Morgan Stanley bought nearly 30,000 shares of Grayscale Bitcoin Trust as its clients demand exposure to the asset class.

๐Ÿ‡บ๐Ÿ‡ธ JP Morgan acquired ESG investment platform OpenInvest.

Fintech Infrastructure ๐Ÿšง

๐Ÿ‡ช๐Ÿ‡บ Mambu signed League Data to modernise its core platform.

๐Ÿ‡ฌ๐Ÿ‡ง Origin Markets released a flurry of announcements including the markets first standardised termsheet for IG bond issuance as well as instant-ISIN feature.

๐Ÿ‡ฌ๐Ÿ‡ง TrueLayer released Verification API, to verify account ownership for onboarding with 20% improvement vs credit bureaus and increased speed. Congrats Olga Zapata & team!

Payments ๐Ÿ’ฐ

๐Ÿ‡ช๐Ÿ‡บ Klarna is partnering with revenue-based financing provider Liberis, to offer its e-commerce merchants pre-approved, flexible loans.

  • ๐Ÿ™Œ๐Ÿป FATP Take - Klarna is going head to head with Square Capital, Stripe Capital, Amazon, Shopify and more by lending to its merchant customers, attempting to further own or dominate the merchant relationship. Whilst Klarna is unlikely to see all of the trading of its merchants, POS providers like Square or payment processors like Stripe will, which might give them a loan issuing edge. Companies like Weav can help provide additional data to Klarna to better compete.

๐Ÿ‡ช๐Ÿ‡บ OneFor has launched a cross-border money transfer app focused on migrant workers in Europe.

๐Ÿ‡ฌ๐Ÿ‡ง Tomato Pay, formerly Fractal Labs, launched a QR payment app for SMBs.

๐Ÿ‡บ๐Ÿ‡ธ Venmo is adding a 1.9% + ยข0.10 transaction fee for payments for goods and services effective July 20th. This is on top of increased charges PayPal announced last week.

๐Ÿ‡บ๐Ÿ‡ธ Visa has hired or moved 5 people for its in-house crypto team and plans to expand further.

Regulatory Corner ๐Ÿ”Ž

๐Ÿ‡ฌ๐Ÿ‡ง This week my inbox has been filled with emails from fintechs who are required by the FCA to remind their customers how their funds are protected under e-money accounts and how it differs from FCSC protected bank accounts. The FCA gave a six week deadline which expires this week.


Crypto 101 ๐Ÿซ

Mining - Whilst we have touched on the process of mining before, through defining various other terms, I wanted to bring it all together in a short end to end guide into how mining happens from start to finish. This is a simplification of what happens which should be sufficient for all but the most ardent of technical folks!

Miners run a node, which is just a computer that runs the Bitcoin program, and these nodes connect to other computers running the same program to create a network. When new transactions are initiated by users, i.e. Alice wants to send 1 BTC to Bob, this goes into a memory pool (mem pool), which is shared among the network.

To add transactions from the mem pool to the blockchain, each node has to hash all the transactions into a single string of letters and numbers. Once they have been hashed, this string is hashed with another number, the nonce, to get a new string. To be accepted and have a new block created, this new string must be lower than the target value of the proposed new block. To find a new string that is lower than the target, trial and error is used to incrementally increase the nonce until the new hash is lower than the target.

Thatโ€™s it. Sounds simple but it definitely isnโ€™t. This trial and error takes a LOT of computing power. It is difficult by design, because if it was too easy, anyone would add transactions to the blockchain and would spend their BTC multiple times. Difficult mining prevents the โ€œdouble spendโ€ problem. Also, it makes the network more secure because it requires a lot of computing power and electricity (i.e. $$$)to control transactions that get added to the network.


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Michael