Welcome to The Interchange! If you received this in your inbox, thank you for your subscription and vote of confidence. If you are reading this as a post on our site, please register over here So you can receive it directly in the future. Every week, I look at the hottest fintech news from the previous week. This includes everything from funding rounds to trends to niche analysis to hot takes on a specific company or event. There’s a lot of fintech news out there and it’s my job to stay on top of it – and understand it – so you can stay informed. – Mary Ann
Hello, hello. By the time you read this, we’re two days away from TechCrunch Riot! Very interesting!
But first, let’s talk about fintech.
Last week’s big news was that enterprise expense management startup Brax announced it was laying off 11% of its workforce, or 136 people. It was also announced that startup CFO Adam Swiecicki is leaving to join Rippling as CFO. Notably, HR platform unicorn Rippling recently moved into the corporate governance space, making it a direct competitor to Brakes.
First, it’s rare for a company to proactively share news of downsizing — and it’s refreshing, so Brax got ahead of any rumors and let me know the plans firsthand. And as Alex Wilhelm pointed out on Friday’s Equity Podcast , the cuts appear to be largely related to Brex’s move earlier this year not to work with SMBs and startups without professional backing. In other words, the company says it has let go of people who were primarily focused on serving that group. It still has to suck for those employees — especially considering that the teams he no longer works for were the brakes’ bread and butter in the first place.
Big-picture-wise, news of Brax’s layoff shows that even DecaCorn isn’t immune to this downfall. The company earlier this year secured a $300 million Series D extension at an impressive $12.3 billion valuation. And while the company says it’s “in a strong financial position with several years of runway,” moving away from SMBs to focus more on enterprise customers — and, by default, any related cuts — puts the company “over the top.” A path to sustainable profitability over the next few years.
Side note: Breaks aside, it blows my journalistic mind that companies in general can raise hundreds of millions of dollars in funding but not be profitable. I doubt I could be the founder of a venture-backed startup. The pressure to pay back the investors who have invested such money in my company and the pressure of not wanting to lay off my employees probably keeps me up at night! Guess that’s why I’m a journalist, not a startup founder!
Anyway… Speaking of disruptions and breaks, I’ll be live with Founder and CEO Henrik Dubugras and Anu Hariharan, Managing Director of YC Growth Fund YC Continuity, on Freeside Chat on October 19th! On the same day, I’ll be speaking with Ramp CEO and Founder Eric Gleiman, Air Base CEO and Founder Thejo Kote, and Anthemis Partner Ruth Fox Blader in a session titled “How to Compete Without Losing Your Mind.” . And finally, I talk with Rippling CEO and co-founder Parker Conrad about the company’s plans to “go global.” Come see us! (Get 15% off here).
Oh, and if you want to hear me talk about it all, check out my recent FinTech Leaders podcast episode with VC Miguel, “The Good and the Ugly of FinTech, What Great Journalism Really Means, and Why Startups Represent Hope.” Armaza
VCs are clamoring to fund real estate investments.
Image Credits: Edwin Remsburg (Opens in a new window) / Getty Images
Hello! Anita Ramaswamy with Mary Ann reports here on TechCrunch from the fintech desk. We’ve been seeing a lot of interest — and funding — in the news lately in the real estate and protech spaces. Especially for real estate investment applications, startups raising rounds have been seen in real estate investments, giving the property segment tools to help retail investors overcome hurdles such as large upfront capital requirements. Property.
Fintor is one such example. The startup recently closed a $6.2 million funding round at an $80 million valuation for the platform, which offers investors divided shares in residential properties for $5. We also covered similar platforms like Landa, Nada and Destination Homes, all of which raised new funding in 2022.
Rising interest rates among retail investors to acquire real estate may seem counterintuitive, as rising interest rates make real estate seem less attractive than it has been in the past few years. But these startups are more likely to focus on the growth of long-term global demand for real estate than being preoccupied with concerns over short-term volatility.
Here’s what Fintor founder and CEO Farshad Yousefi had to say about the current market situation in an email to TechCrunch:
While recent media headlines have focused primarily on market volatility, there are still opportunities for investors to engage in the right strategic approach to investing in real estate. For example, Atlanta has seen an impressive 12 percent year-over-year increase in rental rates, directly boosting investor cash flow. Additionally, looking at top MSAs across the board, major institutional investors have seen a 50% jump in renewal rent growth. This upward trend in tenant retention clearly shows where rental demand is headed.
For a deep dive into real estate technology and how it’s changing the investment landscape, check out my article on TC+ this week:
Weekly news
Plaid It announced last week that it has added two new features to its authentication product. In an email, Plaid’s head of identity and fraud (and former Cognito CEO) Alain Meyer told me: “With our new autofill feature, users can be verified in 10 seconds. On the back end, we’re building more intelligence with behavioral analytics into our risk and fraud models to stay ahead of fraudsters.
The behavioral analysis part is especially interesting because you know your SSN/phone number by heart, and then your typing behavior will be very different from copying and pasting from a document. Plaid admits this type of technology isn’t new, but says it’s not integrated with other fraud detection features Plaid offers.
Are you going after the square? TechRadar reports: “Now following the acquisition of Zettel in 2018, PayPal It has announced a new POS device designed to accommodate the needs of small and medium-sized businesses. The newly launched Zettel Terminal enables business owners to work on the go with internet via Wi-Fi or a free pre-installed SIM card on 3G and 4G networks. This ‘fully mobile’ approach should appeal to multi-location providers as it does not require additional setup or manual communication at every new location.
As Christine Hall reports: “Greenlight Financial TechnologyThe venture-backed fintech company, which specializes in providing kids with a debit card, banking app and financial education, has added another layer to its subscription plan by introducing family safety features. Greenlight Infinity, which sells for $14.98 a month for the whole family, includes location sharing so anyone can see where they are and check in. SOS alerts for emergency contacts and/or 911 with one tap; And crash detection automatically sends 911, if an accident is detected while driving, providing driver and trip information to emergency services.
TC+ editor Alex Wilhelm dug deep into some Q3 funding numbers, and what he found when it came to the fintech sector wasn’t pretty. He wrote: “Looking at Q3 2022 data from CB Insights, it is clear that fintech funding is behind us. What’s more, global fintech funding activity is back to where it was before 2021, which shows that last year was worse for the startup category than the new normal.
As reported by Sarah Perez Apple “It’s taking a big step to offer more banking services to its customers. The company announced on October 13 that it partnered with Goldman Sachs to soon launch a new savings account feature for Apple Card credit card holders to save and grow ‘Daily Cash’ – cash back rewards from their Apple Card. Purchases. Coming soon. Within months, Apple says cardholders will be able to store this money in a new high-yield savings account with partner Goldman Sachs, accessible with Apple Pocket, and customers can transfer their own money to that account.
According to the Los Angeles Times, “Credit cards and digital payment apps like PayPal offer some advantages over cash, including the ability for fraudsters to trace the amount paid. But CellThe digital payment network, which is owned by the seven largest banks, does not have that much protection for its users. If you use Zelel, there is little chance of someone who proves to be a criminal getting the money back from your bank. The same is true if you send money to the wrong person. If you hit Send, the money is gone — just like losing a $20 bill on the street. Meanwhile, it was Talking on Twitter Zelle had more transaction volume in 2021 than Venmo and CashApp. Hmm. I’m still trying to find evidence for this.
Funding and M&A
Featured on TechCrunch.
The former VC brings smart financial advice to people who really need it, not just the rich: Announcing this $24.4 million round led by GGV Capital, Northstar CEO and co-founder Will Peng told me: “From the first meeting to the The schedule was about a month.
With $67M in new capital, NorthOne is doubling down on SMBs as some fintech companies pull back.
You see, TripActions is valued at $9.2B after reporting a $12B IPO filing
Getaway starts the way for you to enjoy and own vacation homes
Egyptian consumer money app Telda raises $20 million from GFC, Sequoia Capital and Block
AirLex Raises $100M to Enhance Cross-Border Trade Banking, Valuation Remains at $5.5B
Charli D’Amelio-Certified FinTech Step Raises $300M to Bring Crypto to Youth
This company wants to improve your credit by improving your financial literacy
GoHenry, a banking service for under-18s, has generated $55 million in revenue after surpassing 2 million users.
And elsewhere
VC firm QED has acquired fintech executive search firm
Astra Raises $10M in Series A Funding; $30m line of credit
Corporate card startup Mercantile has raised $22 million to target an unusual niche: professional associations
Financial Finesse Launches Venture Arm to Back ‘FinTech for Greater Use’
Well, that’s it for this week! Again, thanks for your continued support – and I hope to see some of you IRL at Riot! xoxo, Mary Ann
