Extra Crunch Tuesday: Which neobanks will rise or fall?

Welcome to Extra Crunch Tuesday

Companies like Chime, WeBank and Paytm have seen valuations soar as consumers eagerly adopt new ways to move and manage their money.

Fintech startups continue to crowd the space: one study found that more than 145 million people in just the U.S. and Europe are likely to become challenger bank customers by 2024.

For a comprehensive industry overview that explores five global models of neobanks, their key success factors and some of the infrastructure challenges they’re facing in emerging markets, read on.

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Inside Root's IPO filing

Following Lemonade’s lead, insurtech startup Root filed to go public last night.

In today’s edition of The Exchange, Alex Wilhelm studied Root’s underlying financials to see how well the company might perform in the market — and how highly it might be valued.

Given the Ohio-based company’s historic burn rate, “it’s going to need a lot more to get to profitability,” he suggests.

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Embedded finance might represent fintech's future

At TechCrunch Disrupt, three experts shared insights about how banking as a service is allowing every company to potentially offer fintech products and services:

• Hope Cochran, managing director, Madrona Venture Group
• Ruth Foxe Blader, partner, Anthemis
• John Locke, partner, Accel

“It is easier to launch fintech brands than ever before because you can use some of those banking-as-a-service tools, whether it’s card issuing, ACH transfers, credit, stocks or whatever you want to have in your own app,” said Locke.

“You don’t necessarily have to build all that yourself. That’s causing a lot of really talented entrepreneurs to get into the market.”

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6 favorite Techstars startups ahead of its next rush of demo days

Catching up after some well-earned time off, Alex selected his favorite six startups from Techstars’ September cohorts.

YearOne (Kansas City)
MyFavorito (SportsTech Melbourne)
Livelii (Toronto)
Albo (Tel Aviv)
Space Products and Innovation GmbH, SATIM (Starburst Space Accelerator)

“After all, what’s more fun than looking at the startups of the world and trying to figure out which is going to have the biggest impact?”

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2 Kindred Capital partners discuss the firm's focus and equitable venture model

Reporter Steve O’Hear recently spoke to partners Leila Rastegar Zegna and Chrys Chrysanthou at London-based Kindred Capital.

Kindred, which focuses on early-stage founders in Israel and Europe, recently closed an £81 million second seed fund and has an “equitable venture” model — after LPs and partners recoup their investment, “the portfolio founders share any subsequent fund profits,” reports Steve.

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Index Ventures’ Nina Achadjian and Sarah Cannon: ‘there’s basically an infinite bid’ for growth-stage startups

Danny Crichton interviewed Nina Achadjian and Sarah Cannon at Index Partners, a multi-stage firm that raised $2 billion in April “to continue doubling down on all the deals springing up across the world.”

Their chat touched on how fundraising behavior continues to adapt, new seed vehicles and the increased popularity of rolling funds.

TechCrunch: And what about growth?

Nina Achadjian: We took a venture mindset and applied it to growth. And I think that’s helped us in quite a few ways.

I actually think today, being able to do both makes you better at both jobs. So when I’m looking at a seed-stage company, I think to myself, “Wow, well, you know, I sit on the board of a couple of companies that are doing hundreds of millions of ARR, that are very much growth-stage companies, can I see this founder becoming a leader like that?”

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Accel VCs Sonali De Rycker and Andrew Braccia say European deal pace is 'incredibly active'

In a recent episode of Extra Crunch Live, Alex Wilhelm spoke with Accel VCs Sonali De Rycker and Andrew Braccia to get their perspective on investing globally in the COVID-19 era.

“What has surprised me even more [than change in the European startup scene over time] is the acceleration in the last couple of years,” said De Rycker. “And I think it’s continued in the last few months, despite the COVID environment.”

Read highlights from their discussion, or watch a video with the entire conversation.

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