Hi y’all, it’s Cokie. But, today, call me bullish.
As many of you know, I’ve spent a lot of this year preaching about personal finance and attempting to develop a personal investment thesis. I also started as Chief of Staff for The Block this year, meaning I have been saturated by digital asset information from some of the brightest minds on the subject. I used to be pretty crypto-negative, but here’s why I’ve changed my mind.
Bitcoin’s over $18,000. We’ve seen this before. In 2017, Bitcoin rallied hard all the way up to $20k, then crashed overnight. I always saw that run as speculative gambling -- people were just playing to play.
This time seems different to me. It seems like a genuine bull market, instead of just a bunch of incels being pro-crypto from their mother’s basement. Here’s why:
We’re entering a recession. Like it or not, we’re looking at a hyperinflated market due to corporate bailouts, heavy rounds of quantitative easing, and the various stimulus packages. The market is uncertain and inflation is a very serious threat, leading many to favor a decentralized option.
The President is an unreliable narrator. As he continues to cause irreparable harm to our financial system through betting the US economy on his ego, equity and dollar investments seem less appealing than they have previously. Bitcoin, and crypto generally, offers an almost infallible system in comparison. Square recently bought $50M of Bitcoin, representing 1% of their total portfolio, at the end of Q2. Mainstream, much? (BTW -- if Square sells their Bitcoin today, it would be more income than they’ve ever made.)
For those who don’t know how Bitcoin works, certain people are essentially paid moderators to ensure transactions are verifiable and solve for the double-spend issue. This level of security isn’t available from your bank, especially if you have less than $5M.
Bitcoin is the absolute GOAT of financial access. Anybody can open an account and start investing. No minimums, no arbitrary numbers determining if you’re a worthy human, no blocked locations. We can open an account to buy Bitcoin anywhere in the world.
That said, I think investment is really just a first step. We had to invest and make a lot of money for investors to buy in. Now the real work begins. My guess? The first genuine use case for Bitcoin and other cryptos will be remittances.
I straddle the line between fintech and crypto every day and it’s time to bring crypto back into the fold. All your investment apps are launching crypto products too.
This run is the real deal. A true bull market.
Better buckle up. Hodl till u die, sweety.
It’s become tradition at this point, so you already know, playlist by Moov.io CEO Wade Arnold and me.
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This week’s issue is presented by Privacy.com, a consumer and B2B fintech startup. Privacy.com recently unveiled its card issuing API for all developers recently—making it easier and simpler for non-fintech developers to start issuing their own virtual or physical debit cards. While other card issuing platforms have a ton of red tape before you can start playing around with their API, Privacy.com’s API docs are publicly available and the company has prioritized transparent pricing to find a structure that works for you. Check out Privacy.com’s new API at the link below, and if you’re interested in an intro to learn more, email ian@fintechtoday.co for an intro!
The News by Parker Jay-Pachirat and Cokie Hasiotis
Daylight partners with Visa to offer the first LGBT+ digital banking online platform in the US. I’ve learned a lot from Rob and Billie about the LGBTQ+ journey -- financially disparate from the hetero-experience. LGBTQ+ people often graduate college with more debt, due to lack of parental support, and having a child costs $50k on average. For the trans community, name changes can completely wipe their credit history, resulting in financial issues derived by living authentically. That ain’t right. This is why I’m always screaming about customized and niche banking -- communities of affinity make for stronger customer relationships and can solve entrenched, systemic problems. Congratulations to Rob and Billie, you two are brilliant and I can’t wait to stan Daylight till I die.
PNC Financial Services is poised to buy the U.S arm of BBVA for $11.6b. The Spanish multinational financial services company is one of the largest financial institutions in the world, holding a primary presence in Spain, South America, North America, Turkey, and Romania. If the deal closes, the bank would be the fifth-largest U.S retail bank, worth over $550b in assets. According to PNC Chief Executive Bill Demchak, extending PNC’s national presence would be the “first, second, and third” objective of any deal.
Robinhood is seeking advisors for an IPO, asking banks to pitch for roles, according to people familiar with the matter who told Bloomberg. According to an anonymous source, Robinhood is aiming to go public as soon as the first quarter of 2021. The IPO would follow a wild ride for Robinhood: tapping into a new demographic of millennial and Gen-Z traders during COVID stay-at-home orders which brought their user count to 13 million, facing scrutiny from users and 4x the amount of complaints issued to the U.S consumer protection agency then their competitors, being hacked last month and raising a notable $460m series G in September.
Jay Clayton says he will step down early as head of the SEC at the end of 2020. Clayton’s term expires in June, but his early departure date isn’t unprecedented- SEC chairs typically step down upon change of presidency. Clayton’s led the Securities and Exchange Commission for the past 3.5 years and was occasionally criticized for being too soft on Wall Street. His tenure as chairman ends following the SEC’s extraction of $14b in various fines and agreements with violators of regulatory standards, including a record-setting $4.68b in the fiscal year of 2020.
A Cavaliers-branded credit-card is in development. The card will be managed by Cardless, a startup founded last year by Stanford grads Michael Spelfogel and Scott Kazmierowicz. Their vision? Bring the co-brand card enthusiasm that consumers have for airline miles and hotel points to pro sports- starting with the Cavaliers. “We were thinking about this as: How do we take this and make it more than just a logo on a credit card?” Barlage said in an interview. According to Nic Barlage, president of business ops for Cleveland’s National Basketball Association franchise, perks of earning points could include signed merch or a chance to be an “honorary benchwarmer” as players warm up before a game.
Google massively relaunched Google Pay this week, turning the app from something people thought primarily of as a peer-to-peer payment system into an all-encompassing money app. Google Pay now includes personal finance aggregation, customizable deals, and full banking services. You can even enable the app to look for receipts in your Gmail and Google Photos, auto-scan them using OCR technology, and integrate them into your finance tracking. By unifying their financial services into a single app, Google Pay puts itself in direct competition with players like Apple Pay, Samsung Pay, Venmo, Paypal, Square Cash, and Intuit's Mint. It’s difficult to think of whom Google isn’t competing with. In 2021, Google will launch a new service- “Plex”- by partnering with banks directly to offer full online checking and savings accounts inside Google Pay.
Affirm filed to go public on Wednesday, with revenues doubling year-over-year. According to the documents filed with the SEC, the buy-now-pay-later company saw 98% revenue growth year over year, with net losses dropping by roughly half to $15.3m in the three months following September. Affirm also said their gross merchandise volume- a key metric in the payments industry, grew by 77% year over year. The company ranked #23 on this year’s CNBC Disruptor 50 list.
Shopify launched a partnership with Alipay, initiating cross-border commerce. The partnership will allow U.S merchants to use Alipay and accept payments from 1+ billion annual active users in China. Shopify blogged: “In the past, Shopify merchants have been able to offer Alipay as a payment method through third-party providers. Now, through the Alipay payment gateway, Shopify merchants will reduce friction for consumers looking to make purchases with their preferred payment method”. Though for now, only U.S merchants can use the Alipay gateway, Shopify will expand access in the future to markets including Hong Kong, India, South Korea, Indonesia, the Philippines, Malaysia, Thailand, Pakistan, and Bangladesh.
Fundraising News
Lisnr received an investment from Visa, accelerating contactless payments via sound. Lisnr, the global leader in ultrasonic data transmission, enables customers, merchants, financial service providers, and mobility companies to make transactions seamlessly via sound.
B2B payments platform Credit Key raised $33.85m in funding this past week from investors including Greycroft, Bonfire Ventures, Loeb.NYC, and more. Credit Key offers users the buy-now-pay-later model popularized by Klarna and Affirm. “We anticipate continued momentum and we’re excited to assist small businesses as they work through the recovery and position themselves for the future,” said John Tomich, co-founder of Credit Key.
African fintech Chipper Cash raised a $30m Series B backed by Jeff Bezos. The round was led by Bezos’ personal fund Bezos Expeditions and Ribbit Capital. Ugandan Ham Serunjogi and Ghanaian Maijid Moujaled founded Chipper Cash in 2018, offering mobile-based, no fee, P2P payment systems in seven countries: Ghana, Uganda, Nigeria, Tanzania, Rwanda, South Africa, and Kenya. Alongside the P2P app, the startup also offers Chipper Checkout- a merchant-focused, fee-based payment product. With the new raise, Chipper plans to expand its products and geographic scope, as well as develop business payment solutions, cryptocurrency trading options, and investment services products.
Satispay, Italy’s leading provider of mobile payment services, raised $100m from international investors like Square, Tencent, LGT Lightstone, and TIM Ventures. Co-founder and CEO Alberto Dalmasso says increasing the size of the business development team in Luxembourg is a key priority for Satispay.
London Banking-As-A-Service provider Griffin secured $8m in funding led by EQT Ventures. The round also included participation from Seedcamp, Tribe Capital, Indeed.com’s founder Paul Forster, and others. Founded in 2017, Griffin is building a proprietary API platform enabling firms to open ring-fenced accounts for customer funds alongside an integrated compliance engine and ledger. Griffin will use this round to progress the firm’s authorization application for a banking license with the UK's PRA and FCA.
