This week, we look at:
The $12 billion in cumulative SPAC capital focused on Fintech, of which $3.6 billion has been raised in 2021 Q1 alone
Analysis of the private and public financial services markets and their valuations of profitability and revenue
A deeper look at the fundamentals and business mix of SPAC targets MoneyLion, Payoneer, Apex Clearing, and SoFi
Not everything that glitters is gold
In this conversation, we talk with Brian Barnes of M1 Finance, about finance “super apps”, the cost-efficiencies of robo-advisors, fractionalized share trading, and tackling the titans of the Wealth Management industry. We also discuss the nuts and bolts of the financial infrastructure making this possible.
M1 Finance bundles together roboadvisory, neobanking and lending into a single “super app”, allowing for combined pricing power (i.e., charging nothing on asset allocation). The firm currently has $3 billion in AUM, a growth of 50% in the past four months and tripling their total in just over a year. Notably, the company has its own broker/dealer and offers fractional shares, and partners with Lincoln Savings bank on the deposit accounts. That makes for a compelling business model from securities lending, interchange, and order flow.
This week, we look at:
Hashmasks, CryptoPunks, and other large NFT / crypto art projects generating tens of millions of USD trading volume
Perceptions of financial value, as well as whether it matters to have an “original” digital art piece relative to its digital copy
The intersection of collectibles with decentralized finance, and its collateralization, tranching, lending, and trading, as well as a view on 2021
In this conversation, we talk with Will Beeson of Bella and Rebank, about how the Internet/Reddit/Gamestop broke out financial market structure, the social contract, and what the new American finance structure will look like.
More specifically, we give some thought to which FinTech and Crypto companies win or lose from the GameStop adventure, the actual market structure issues that led to the suspension of Robinhood’s trading, and what’s next for the mobile broker, and finally, the social meaning of the war against hedge funds by Reddit’s r/wallstreetbets. Check out our conversation on these exciting new developments.
Despite its best efforts to the contrary, Robinhood did end up stealing from the rich and giving to the poor.
Melvin Capital, the $8 billion hedge fund that didn’t find GameStop funny, lost 53% of its portfolio in January ($7 billion) trying to short against the rallying cries of the Reddit Capitalist Union. Gabe Plotkin also faces the embarrassment of having to get bailed out by your old boss.
Speaking of, New York Mets owner and former name-on-the-door of SAC Capital, known most recently for its insider trading fine of $1.8 billion, Steven A. Cohen, put $2.8 billion of capital into Melvin’s fund.
Ken Griffin, owner of the Citadel hedge fund (an investor in Melvin), and Citadel Securities (a massive market maker and buyer-of-order-flow for Robinhood), is seeing capital losses in the former and Washington cries for scrutiny into market structure in regards to the latter.
Robinhood itself — which for goodness sake is *not Wall Street*, but as *Silicon Valley* as it possibly gets — raised $1 billion immediately to protect itself from class action lawsuits, DTCC capital calls, and a now-rapidly-closing IPO window. That means Yuri Milner of DST Global chipping in yet again.
That’s at least 4 people that have had a very bad, no good day.
In this conversation, we talk Ajit Tripathi, currently the Head of Institutional Business at Aave and a former colleague of mine at ConsenSys, about the path from traditional finance, to enterprise blockchain and “DLT” consulting, to full-on decentralized finance.
Thinking about how to connect these worlds and different available journeys? Or the timeless risks developing in tranched DeFi that look like mortgage-backed securities? We even touch on hegelian dialectics! Check out our great conversation.
This week, we look at:
The nature of innovation hubs, and how close groups of actors within a particular environment can be massively, fundamentally productive. Take for example the 30 million years of the Cambrian explosion.
The difficulty of experimenting with banking and money frameworks, the limits of traditional econometrics, and an overview of “free banking” in the 1840s.
How evolutionary theory can help us think about selection of economic models, and the hyper-competition and hyper-mutation that we see in crypto. DeFi protocols, like BadgerDAO and ArcX among hundreds of others, are experiments in designing different monetary policies and banking regime experiments in real time.
We have never before had such acceleration in the design space of the economic machine, subject to evolutionary pressures, built by a closely-wound nexus of developers. It is a fortune for the curious.
In this conversation, we talk all things embedded finance, platform banking, and APIs with Simon Torrance – one of the world’s leading thinkers on business model transformation, specializing in platform strategy, breakthrough innovation and digital ventures.
There’s an enormous gap between the financial needs of humanity and what the financial sector is able to deliver there. This gap is being filled by tech-savvy solutions and embedded finance plays which are putting into question the role of a bank in this new ecosystem.
This week, we look at:
Over $1 billion in raises announced last week, and over $10 billion in Fintech company value creation: Checkout.com with $450 million at a $15 billion valuation, Affirm more than doubling after its IPO to $30 billion, lending enabler Blend raising $300 million, and payments enabler Rapyd raising $300 million.
A systems theory framework that explains the stocks and flows of goods and services, and what monetization strategies are available to fintechs
How transactional models are thriving and creating 50-100x revenue multiples
