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Wednesday, February 8, 2023

A conversation with Andreessen Horowitz’s fintech leads – londonbusinessblog.com

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Welcome to The Switch! If you received this in your inbox, thank you for signing up and trusting us. If you read this as a post on our site, please sign up here so that you can receive it immediately in the future. Every week I watch the hottest fintech news from the past week. This includes everything from funding rounds to trends to an analysis of a particular space to hot takes on a particular company or phenomenon. There’s a lot of fintech news out there and it’s my job to stay up to date – and understand it – so you stay informed. — Mary Ann

Last month, Andreessen Horowitz – one of the largest and most prominent venture capital players – announced that its “headquarters will be in the cloud in the future.”

Founded in 2009 in Menlo Park, California, the company is also known as a16z and has been a symbol of investment in Silicon Valley for years.

The new philosophy in this post-COVID era of remote working is that there is no longer a need for a centralized headquarters. This philosophy extends to the fintech team. And let’s face it, fintech opens so many doors in general – allowing for a lot more things in terms of running a business or just operating in general, globally. Many may be underestimating how much the pandemic has really boosted this acceleration in the financial services world and people are now kind of saying, “Oh, there’s this slowdown and look how much less investment in fintech there is.” You have to put it in perspective – we’re still way, way above 2020 in terms of how much money is going into this space. And fintech still takes up almost a fifth of all venture capital dollars. I think this is because it affects everyone on a daily basis. If financial services are more easily accessible or if it’s easier for a company to operate or make payments or accept payments, it’s all because of fintech.

I sat down (almost, that is) with a16z general partners Angela Strange and Anish Acharya to learn more about why the pair believe we are experiencing the “unbundling of Silicon Valley,” which sectors of fintech have the most potential, and how the new era of remote working has opened up so many opportunities for financial technology startups .

Read more here.

Reporter’s Note: The Angela and Anish interview took place weeks before publication and I learned after publication that a recent analysis reportedly revealed that of the company’s fintech portfolio of 42 companies, only four had female co-founders. I contacted the partners about this topic this weekend, but I hadn’t heard anything when this newsletter went live. It’s weekend, of course, so I didn’t expect a response so quickly. If I hear anything I’ll keep you posted next weekend!

Weekly news

My fintech partner in crime, the oh-so-talented Natasha Mascarenhas, closed the week with a scoop on Stripe firing some of the employees who support TaxJar, a tax compliance startup it acquired last year. According to Natasha, “The layoffs — which took place over the past month — are related to Stripe’s decision to phase out its go-to-market efforts targeting TaxJar at the end of July. Sources estimate that the number of employees affected by the cut is between 45 and 55 people, at least some of whom were invited to take 30 days to apply for internal jobs at Stripe… According to LinkedIn, Matt left Anderson, the co-founder of TaxJar, Stripe in July, followed by people in the sales, marketing and partnership teams.” Read more here.

The world of expense management just got (even) more competitive. Business Expenses and Cash Management Company rho announced it is adding expense management to its offering with “custom controls designed to make spending less painful.”

Via email, the company told me it believes “offering the full suite” is crucial in today’s world of fintech. Specifically, a spokesperson said: “Looking at the landscape, there are ten different providers for each individual process: spend management (e.g. Brex), spend (e.g. Expensify) and banking services (e.g. Mercury). Merging different platforms for these separate functions create friction for financial users. Rho believes in the power of integrating expense management and corporate banking services. Any corporate finance process – AP, commercial banking, expense management/cards, treasury management – works better when they work together in a single , connected view.”

The startup in December raised a $75 million Series B funding round led by Dragoneer Investment Group.

Speaking of expense management, Air base announced the appointment of Philip Lacor as Chief Revenue Officer. Lacor was most recently CRO for platform company Unqork with no code, where he handled all go-to-market efforts including sales, pre-sales consulting, customer success, revenue activities and channel partners. He also led the company’s expansion into APAC. Before that, he was CRO at Envoy.

Mexican fintech Covalto, which serves Mexican SMEs and was previously known as Credijusto, has agreed to publicly list on a US stock exchange through a SPAC at an estimated pro-forma valuation of $547 million. The transaction is believed to be the first time a Mexican fintech has agreed to list on a US exchange. In a press release, the company said it would merge with LIV Capital Acquisition Corp. II, a special purpose acquisition company launched by Mexico City-based fund LIV Capital. Upon completion of the transaction, LIVB will be renamed Covalto and will continue to be listed on the Nasdaq under the new ticker symbol “CVTO.” The company said production grew at a CAGR of 152% between 2015 and 2021. More here.

Speaking of public markets, something interesting is happening with fintech stocksaccording to F-Prime . Fintech Index. The index is up 41%, compared to EMCloud’s 19.5%, Nasdaq’s 15.6% and S&P’s 12.2%. Notably, it said Affirm is leading the pack and is up 67%. Insurance stocks were up 46% overall, led by Lemonade and Oscar Health. Payment shares are up 44%, driven by Wise and Mercado Libre. Wealth and wealth management stocks also rose 32%, driven by Coinbase and Bakkt Holdings. Meanwhile, banking and credit stocks are up 24%.

Speaking of To confirm. Buy now, pay later giant announced an extensive, multi-year collaboration of BigCommerce that “makes Affirm the preferred and recommended pay-over-time partner for BigCommerce’s tens of thousands of merchants,” the two companies said. As a result of this partnership, BigCommerce merchants will be able to activate Affirm as a payment option at checkout, right within the BigCommerce merchant dashboard.

on August 12, paypal announced that “all eligible PayPal account holders in the US” can now transfer, send and receive cryptocurrency with PayPal.” londonbusinessblog.com had reported that the move would take place in early June.

Robin Hood rolled out some new features last week. First it is launched advanced charts, with the goal of “providing all customers with customizable, fast, simple and in-depth analytics right in the app.” The company said advanced charts were “the most requested feature” from its active customers. The company also launched Cash Card Offersa new benefit that allows all Cash Card customers to “automatically” earn cash back on spending at retailers such as Chevron, Nike, Five Guys, Macy’s and others.

From PitchBook on payments“The accelerated digitization of financial services, as well as the shift to online services, has benefited fintech startups in recent years. The COVID-19 pandemic helped accelerate these trends as consumers turned to digital financial services rather than face-to-face interactions… Digital payments, one of the first financial segments to go digital, continued to be disrupted rapidly during this period. POS platforms have benefited from the demand for online and contactless transactions, remote working has created a need for payroll software providers, and business credit card providers such as Ramp and Brex have reportedly seen revenues soar.”

Hello Alice, which says “helping more than 1,000,000 small businesses grow,” has announced a new Small Business Mastercard. Launched on August 16 in partnership with Mastercard and First National Bank of Omaha, the card offers small business owners features such as a rewards program with the ability to earn points by completing “business promotion activities” on the Hello Alice platform. The company says it recently launched a Research on capital access for small businesses and found that 78% of owners claim that access to capital limits their ability to manage their day-to-day operations, with black (84%) and multiracial (82%) owners overindexing this claim. In his words, Hello Alice designed the card “to meet the needs of small business owners wherever they are, by breaking down long-standing barriers for those traditionally denied access.”

Financing and M&A

Seen on londonbusinessblog.com

Pomelo exits stealth mode with $20 million seed to reconsider international money transfer

Tiger Global doubles down on Indian savings and investment app Jar

Pastel, a Nigerian accounting and digital platform for traders, raises $5.5 million led by TLcom

Highbeam inks $7M to shed light on ecommerce-specific banking needs

Funding Circle co-founder unveils new fintech venture Super Payments with $27 million investment

Rocketplace Raises $9 Million in Seed Funding to Build the ‘Fidelity for Crypto’

Social investment platform eToro acquires fintech startup Gatsby for $50 million

YC-backed Arc, a digital bank for ‘fast-growing’ SaaS startups, raises $20 million in Series A

Seen elsewhere

Payment firm AtoB raises $155M in Series B to modernize trucking industry

Ecuadorian ‘unicorn’ Kushki buys financial services startup in Mexican expansion. londonbusinessblog.com covered the company’s $100 million raise against a June valuation of $1.5 billion.

Agora Raises $20 Million on Series A Led by Insight Partners ‘to Accelerate Real Estate Business Growth with Digital Transformation’

Closinglock Announces $4 Million in Financing Led by LiveOak Venture Partners

ICYMI: Digital Credit Fintech Capital Raises $30M in Debt and Equity to Grow in Mexico and Colombia

Another busy fintech week in the books. Thank you, as always, for your support in reading and sharing this newsletter of mine! A wonderful week ahead. xoxo, Mary Ann

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