Welcome to\u00a0The Interchange<\/a>! If you received this in your inbox, thank you for signing up and your vote of confidence. If you\u2019re reading this as a post on our site, sign up\u00a0<\/em>here<\/em><\/a>\u00a0so you can receive it directly in the future. Every week, I\u2019ll take a look at the hottest fintech news of the previous week. This will include everything from funding rounds to trends to an analysis of a particular space to hot takes on a particular company or phenomenon. There\u2019s a lot of fintech news out there and it\u2019s my job to stay on top of it \u2014 and make sense of it \u2014 so you can stay in the know. \u2014\u00a0<\/em>Mary Ann<\/em><\/a><\/p>\n The big news in fintech this week revolved around payments giant Stripe<\/strong>.<\/p>\n On January 26, my Equity Podcast<\/a> co-host and overall amazingly talented reporter Natasha Mascarenhas and I teamed up to write about how Stripe had set a 12-month deadline<\/a> for itself to go public, either through a direct listing or by pursuing a transaction on the private market, such as a fundraising event and a tender offer, according to sources familiar with the matter. The news, as first reported by the Wall Street Journal, came as a surprise considering the rather dry public market activity in the tech world. Later that day, it also came to light that Stripe had reportedly approached investors<\/a> about raising more capital \u2014 at least $2 billion \u2014 at a valuation of $55 billion to $60 billion. This is especially newsworthy considering that Stripe last raised at a $95 billion valuation in March of 2021. Now, down rounds are hardly shocking in today\u2019s environment. But for some reason, when you\u2019re talking about a company that had achieved the highest-ever valuation for a privately held startup, it sits differently. Even more intriguing, The Wall Street Journal reported that Stripe would not use the money toward operating expenses but rather to cover a large annual tax bill associated with employee stock units. It is not clear if any discussions are ongoing, and Stripe declined to comment on the matter when asked.<\/p>\n The fact that the company might raise money to pay off a tax bill raised eyebrows internally here at TechCrunch. That is not typical, and it certainly doesn\u2019t seem like it\u2019s an ideal way to spend investors\u2019 cash. Ken Smythe, founder and CEO of Next Round Capital Partners \u2014 a capital markets and VC secondaries firm \u2014 validated our impressions.<\/p>\n In a phone interview on January 27, he told me that it is \u201chighly unusual for investors to be excited about a new round that is primarily going to pay unpaid taxes.\u201d<\/p>\n Instead, Smythe said, they generally get more pumped about funding expansions into new markets or products or other growth initiatives.<\/p>\n But generally speaking, he believes that a fundraise is a more likely outcome for Stripe than an IPO, if <\/i>the company can pull it off.<\/p>\n \u201cIt makes sense that Stripe would try to raise money privately at a $55 billion to $60 billion, a -30% drop from their $95 billion round in 2021,\u201d he told me. \u201cIn contrast to public fintech stocks, which have suffered -65% to -80% drops over the last 12 to 18 months (PayPal, Square, Ayden), a private raise at $60 billion would be a big win. That\u2019s still a very healthy multiple of 20x+ revenue multiple in an environment where many fintech names are trading in the single digits.\u201d<\/p>\n Going public, Smythe said, will likely remain challenging for most companies until late 2023 or 2024 \u2014 Stripe included.<\/p>\n \u201cIt\u2019s highly unlikely that an IPO for Stripe is anywhere near on the horizon, given the weakness of broader fintech gains and the unpredictability and volatility of Stripe\u2019s revenues,\u201d he added.<\/p>\n Indeed, as a historically transactional-payments business, Stripe appears to be exploring ways to generate meaningful \u2014 and predictable \u2014 revenue. For example, Amazon announced on January 23 that it plans to \u201csignificantly expand\u201d its use of Stripe. Reported Pymnts<\/a>: \u201cUnder the new agreement, Stripe will become a strategic payments partner<\/a> for Amazon in the U.S., Europe and Canada, processing a significant portion of Amazon\u2019s total payments volume. Stripe will be used across Amazon\u2019s business units, including Prime, Audible, Kindle, Amazon Pay, Buy With Prime and more.\u201d Also, I recently wrote about how new fintech startup Mayfair is paying Stripe a fee<\/a> as part of its mission to offer businesses a higher yield on their cash.<\/p>\n I know we\u2019re all wondering what\u2019s going on with the company as it appears to be struggling to keep its footing in an increasingly crowded fintech space. Will it raise or go public? What is Stripe really valued at now? I, for one, can\u2019t wait to find out.<\/p>\n Image Credits:<\/strong> SOPA Images \/ Contributor \/ Getty Images<\/p>\n<\/div>\n One-click checkout startup Bolt<\/strong> laid off more people last week. And according to The Information<\/a>, CEO Maju Kuruvilla \u201ctold an all-hands meeting \u2026 that \u2018quite a few\u2019 of Bolt\u2019s recent moves, including partnerships, new products, and acquisitions, had not worked out.\u201d Also according to The Information, about 50 employees were affected by the latest round of layoffs. Overall, the company has cut its headcount by more than half since last May.<\/p>\n When asked, a company spokesperson told me only that Bolt is \u201cfocused on the long-term success\u201d of its business and its customers. She added: \u201cWe truly believe we will power the next generation of growth for independent retailers. As we concentrate on strengthening our core products, we regretfully had to make the difficult decision to restructure our teams and part ways with some of our talented employees. We\u2019re extremely grateful for everyone\u2019s contributions.\u201d<\/p>\n TechCrunch reported on Bolt\u2019s previous layoffs last May<\/a>.<\/p>\n Next Round Capital Partners\u2019 Ken Smythe is not at all surprised by the latest layoff news, telling me that Bolt has struggled to get its core product \u201cto achieve any real traction with customers.\u201d<\/p>\n \u201cRevenue continues to be very weak \u2014 in the $30 million to $40 million range, and it was expected to be much higher at this point,\u201d Smythe said. \u201cA lot of customer acquisition they have talked about has not come to fruition. They overhired, raised $1B at an extreme valuation ($11B valuation at 300x+ multiple), which they used to hire but a product never materialized. Now they\u2019re burning that cash. The reality is they haven\u2019t delivered \u2014 hence the layoffs.\u201d<\/p>\n Image Credits:<\/strong> CEO Maju Kuruvilla \/ Bolt<\/p>\n<\/div>\n Wells Fargo, JPMorgan Chase, Bank of America, U.S. Bank, PNC, Truist and Capital One are collaborating on a product that, according to The Wall Street Journal<\/a>, \u201cwill allow shoppers to pay at merchants\u2019 online checkout with a wallet that will be linked to their debit and credit cards.\u201d Early Warning Services, which is owned by a consortium of the seven banks, will operate the yet-to-be-named digital wallet, which Banking Dive<\/a> reports is expected to launch in the second half of the year. The wallet will operate separately from the EWS-run peer-to-peer payments platform Zelle<\/strong>, according to the Journal. The move seems to be an effort on the part of the banks to compete with the likes of PayPal and Apple. But is it too little too late? J.D. Power and Associates sent me a report<\/a> that showed that according to its data, \u201cmobile wallet usage among Americans continues to grow in stores, but the percentage of customers that still say it is easier to use a physical credit\/debit card than a mobile wallet is on the rise.\u201d<\/p>\n ICYMI: On January 19, Bloomberg reported that Capital One<\/strong><\/a> had \u201celiminated hundreds of technology positions<\/a>,\u201d a move that impacted over 1,100 workers. Those employees were reportedly invited to apply for other roles in the bank.<\/p>\n For those of us who suck at carrying cash, it\u2019s good to know that digital tipping is a growing space. Christine Hall recently wrote about Grazzy <\/strong>raising $4.5 million<\/a> to grow its digital tipping platform. And last week, startup eTip<\/strong> announced its collaboration<\/a> with Visa<\/strong> aimed at helping hospitality and service industry clients \u201caccelerate the adoption of digital tipping.\u201d Via email, eTip said: \u201cWith eTip, guests of hotels, cruise lines, casinos, and resorts can now tip staff by simply scanning or tapping a QR code, allowing hospitality and service employees to receive digital tips in real time.\u201d<\/p>\n X1 <\/strong>released X1+, which it described as a \u201cpremium smart credit card\u201d focused on travel. Features include complimentary lounge access for flight delays, enhanced travel rewards and \u201csmart\u201d baggage protection. CEO Deepak Rao also told me via email that X1 has raised $16 million in venture debt from Silicon Valley Bank, which will be used toward \u201cgrowing new product lines and having cash reserve for growth in purchase volume and outstanding balances.\u201d That financing follows the company\u2019s recent $15 million extension funding round.<\/a><\/p>\n Fintech-turned-HR outfit Deel<\/b> revealed that it reached $295 million in annual recurring revenue (ARR)<\/a> in 2022. That\u2019s up 417.5% from $57 million in ARR achieved at the end of 2021. The massive jump in ARR is impressive by normal standards but particularly so considering the challenging macroenvironment that startups everywhere faced last year. The company\u2019s co-founder and CEO Alex Bouaziz also confirmed the company\u2019s valuation of $12 billion, which we reported on in May at the time of Deel\u2019s $50 million raise. The executive also told TechCrunch that Deel is profitable, having been EBITDA positive since September.<\/p>\n Former Salesforce executive Craig Nile has taken a role as Modern Treasury\u2019s new chief revenue officer<\/a> to, in the company\u2019s own words, \u201clead the company\u2019s continuing push into enterprises.\u201d Modern Treasury<\/strong>, which describes itself as \u201cthe operating system for the new era of payments,\u201d also announced it has landed construction software giant Procore, fintech Splitwise and expense management company TripActions as new customers.<\/p>\n Ex-Plaid product marketing lead Victor Umunze<\/a> has launched Wafi<\/strong>, a payment processing platform that aims to provide e-commerce businesses \u201cwith a simple API to enable fast, secure, and cost-effective processing of bank payments that eliminates redundant entities in the payment processing flow, giving businesses significant cost savings and increasing profitability,\u201d the company told me via email. More on this here<\/a>.<\/p>\n Reports Manish Singh: \u201cIndia\u2019s central bank has directed SBM Bank India<\/strong> to stop all outward remittance transactions in a blow to the bank and many of its fintech partners that offer services allowing users to invest in foreign services.\u201d More here<\/a>.<\/p>\n From Fintech Futures<\/a>: \u201cMexican buy now, pay later (BNPL) fintech Kueski<\/strong> has appointed Fausto Ibarra as its new chief product officer (CPO) to lead the firm\u2019s long-term vision for its financial product offerings. Ibarra brings over two decades of experience to the role, most recently serving as Stripe\u2019s head of product for Latin America. Prior to that, he also held various senior roles at tech giants including Meta, Google and Microsoft.\u201d Via email, Kueski told me that the company recently hit its 10-year anniversary of financial service operations, with almost 10 million loans issued since its inception to 1.7 million users across its products, Kueski Pay and Kueski Cash, totaling more than $1.4 billion in loan transactions.<\/p>\n PayPal <\/b>and Bold Commerce<\/b> have teamed up<\/a> in an effort \u201cto enable brands to go headless.\u201d Via email, the companies told me: \u201cBrands will now be able to give PayPal\u2019s 430 million active users the ability to check out wherever they are \u2014 beyond brands\u2019 traditional e-commerce sites \u2014 using PayPal\u2019s full line of payment options: PayPal, Venmo, PayPal Pay Later solutions, and credit and debit cards. This news creates the largest global cross-merchant network effect for e-commerce \u2026 Brands will now have control of the checkout experience and payment options they offer shoppers on third-party digital channels (such as social media, blogs, digital interfaces and QR codes). Currently, brands either have to take shoppers away from the content they\u2019re engaging with to complete a purchase, or they\u2019re limited to the payment options selected by the channel.\u201d<\/p>\n Some news out of Puerto Rico: FV Bank<\/strong> \u2014 which claims to be the first bank in Puerto Rico granted a digital asset custody license by the Office of the Commissioner of Financial Institutions (OCIF) \u2014 announced the launch of its cross-border, foreign currency payments facility. Via email, FV told me: \u201cThe new service will facilitate commerce, allowing US and international customers to make timely, seamless, and secure cross-border transactions, without the need for multiple currency conversions or exorbitant fees.\u201d More here<\/a>.<\/p>\n In this week\u2019s episode of TechCrunch\u2019s fabulous Found podcast, Darrell<\/a> and Becca<\/a> were joined by Sebastian Siemiatkowski<\/a>, the co-founder and CEO of Klarna<\/strong><\/a>. Sebastian talks about what led him to found the startup and how it has navigated multiple market cycles since. He also dives into how Klarna has grown in different categories and which have been more successful than others. Plus, he talks about why he\u2019s been so transparent about the company\u2019s valuation and status amid 2022\u2019s market turmoil. Check it out here<\/a>.<\/p>\n And while we\u2019re on the topic of Klarna . . . From Finextra<\/a>: \u201cKlarna<\/strong> has taken a leaf out of Spotify\u2019s playbook with the launch of Money Story, a personal summary of 2022 that provides consumers with useful insights into their spending habits. Money Story uses the animated \u2018story\u2019 format popularised by social media, to provide users with spending insights that they can convert into financial goals for 2023. The package visualises spending patterns and presents animated quiz questions that prompt users to reflect on where they think they spent their money in 2022.\u201d<\/p>\n Speaking of BNPL, in last week\u2019s Exchange newsletter, the brilliant Anna Heim writes in a story cleverly titled \u2018Protect me from what I want<\/a>\u2019: \u201cBuy now, pay later is an alluring option for consumers, perhaps even more so in a recession. But with rising debt and inflation, perhaps the focus should be on companies that help protect borrowers from digging themselves into a hole.\u201d<\/p>\n Reports Startup Weekly<\/a>: \u201cBean<\/strong>, a Matchstick Ventures-backed digital accounting startup, announced it emerged from stealth to democratize the market for accounting services. Bean\u2019s SaaS enabled marketplace matches a network of elite accountants (only 4% of applicants get access) with CFOs and companies. A 2022 graduate of TechStars LA, Matchstick Ventures, Far Out Ventures and Acadian Ventures invested $1.7 million joined by angel investors and founders Wayne Chang and Jeff Seibert.\u201d<\/p>\n Restive Ventures released its 2023 State of Fintech report<\/a>.<\/p>\n Inman reports<\/a>: \u201cComparing himself to Henry Ford and Elon Musk, CEO Vishal Garg says he\u2019s reconfigured Better<\/strong>\u2018s assembly line to crank out mortgages in a single day.\u201d In a press release<\/a>, the company \u2014 which is rumored to still be struggling quite a bit \u2014 claims that its customers \u201cwill be able to go online, get pre-approved, lock their rate and get a mortgage Commitment Letter from Better, all within 24 hours.\u201d<\/p>\n Sean Roberts<\/a> has left his role as COO and CFO of real estate tech company Orchard<\/strong> and is now CEO of Villa<\/strong>, a venture-backed ADU builder. According to his LinkedIn profile, Roberts will continue to strategically advise Orchard.<\/p>\n According to Layoffstracker.com<\/a>, vacation rental management platform Vacasa<\/strong> laid off 1,300 employees, or 17% of its workforce, last Tuesday, \u201ca dramatic step aimed at stabilizing the faltering Portland company.\u201d \u201cWe need to reduce our costs and continue to focus on becoming a profitable company,\u201d new CEO Rob Greyber wrote in a note to staff Tuesday, which Vacasa then filed with federal securities regulators.<\/p>\n Seen on TechCrunch<\/i><\/b><\/p>\n YC grad <\/i>Method raises $16M to power loan repayment, balance transfers and more across fintech apps<\/i><\/a><\/p>\n B2B sales closing and financing platform Vartana raises $12M<\/i><\/a><\/p>\n Reimbursement and spend management platform Payem secures $220M in equity and debt\u00a0<\/i><\/a><\/p>\n Bling Capital-backed Coverdash unveils its embedded, digital insurance for small businesses<\/i><\/a><\/p>\n Zenfi takes in new funding to bring Mexicans some financial peace<\/i><\/a><\/p>\n And elsewhere<\/i><\/b><\/p>\n DailyPay secures $260 million in new funding<\/i><\/a>.<\/i><\/p>\n Tranch raises $100 million in funding ($5 million equity, $95 million debt) to expand B2B BNPL for service providers<\/i><\/a>.<\/p>\n Charlotte, NC\u2013based commercial lending startup Foro emerges from stealth with $8 million in Series A funding<\/i><\/a> Interestingly, the company tells us that one of its backers is former Bank of America CEO and chairman Hugh McColl Jr.<\/p>\n Suppli raises $3.1 million to modernize construction payments, grow team<\/i><\/a>.<\/i><\/p>\n Zurp raises $5 million pre-seed round to launch the credit card for experiences<\/i><\/a>.<\/i><\/p>\n Nuula sold to Nav Technologies following collapse of Series A round<\/i><\/a>.\u00a0<\/b><\/p>\n \u200b\u200bMedsi secures $10 million in debt financing to onboard 30,000 Mexican customers waiting for its \u201chealth assurance\u201d super app<\/i><\/a>.<\/i><\/p>\n Madrid-based Twinco Capital raises $12 million in equity and debt for supply chain finance platform<\/i><\/a>.<\/i><\/p>\n Mexican VC Dila Capital, with portfolio companies such as fintechs Kushki and Mattilda, closed its fourth fund: $115 million<\/i><\/a>.<\/i><\/p>\n Sandbar gets $4.8 million to fund fight against financial crime<\/i><\/a>. <\/i>Beyond the headline:<\/b> The startup also announced the availability of its product. Investors include Lachy Groom<\/a> and Abstract Ventures<\/a>, with participation from BoxGroup<\/a>, as well as 45+ angel investors, including founders and executives from Ramp, Stripe, OpenAI, Plaid, and Square. Sandbar says it identifies risks and \u201cprovides more effective models to accurately identify suspicious behavior across payment products and services.\u201d According to a spokesperson: \u201cWith stronger AML systems, Sandbar is helping to mitigate false positives and to address large-scale fraud, money laundering, sanctions, and illicit funding for human trafficking, wars, and crimes.\u201d<\/p>\nStripe eyes exit, reportedly tried raising at a lower valuation<\/h2>\n
Bolt lays off more people, continues to struggle<\/h2>\n
![\"Fintech](\"https:\/\/techcrunch.com\/wp-content\/uploads\/2022\/07\/Headshot_Maju-Kuruvilla_CEO-of-Bolt-1.jpg\")
<\/p>\nOther News<\/h2>\n
Proptech corner<\/h2>\n
Fundings and M&A<\/h2>\n