Pipe is launching a new embedded finance product to help small businesses. Their Capital-as-a-Service product has three launch partners.
Banks are haemorrhaging deposits and fintechs diversifying banking partners - Treasury Prime announces new partnership to help both sectors.
Advances in embedded lending provide better options for consumers and higher sales with more certainty for merchants. It's a win-win.
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
In this conversation, Will Beeson and I break down a few important pieces of recent news — the SPACs for SoFi and Bakkt, and Plaid/Visa falling apart.
SoFi is going public with a SPAC deal worth over $8 billion. A few things we touch on in detail: (1) this is still largely a lender, (2) there is a gem of an embedded finance play called Galileo that SoFi owns, and (3) the multiple is a little over 10x T12 revenues, which is not crazy expensive, but not cheap.
Speaking of Galileo and finance APIs, we transition to Plaid, and how it is is not going to be one of the networks in Visa’s network of networks. Who wins and who loses in the equation? And last, we cover the Bakkt SPAC of over $2 billion and our view on its future.
digital transformationEmbedded Financeenterprise blockchainexchanges / cap mktsmega banksneobankOpen Bankingopen source
·In this analysis, we focus on Goldman Sachs launching an institutional embedded finance offering within Amazon Web Services, and Thought Machine raising a unicorn round for its cloud core banking platform. We explore these developments by focusing on the emerging role of cloud providers as distributors of third party software, think through some of the implications on standalone fintechs and open banking, and check in on AI company Kensho. Last, we highlight the difference between Web3 and Web3 approaches to “cloud”, and suggest a path as to how those can be rationalized in the future.
PayPal just launched what it calls a super app. It has a cash account with a 0.40% interest rate, direct deposit, money movement, bill pay, and remittance features. It also integrates shopping functionality with rewards and cash back. In this analysis, we compare this offering with Google Pay and Square Cash App, as well as trace the DNA of PayPal to understand whether such an offering will succeed where others failed.
While BNPL has garnered most of the headlines in recent years, developments in embedded lending may end up having a more lasting impact on point of sale financing
Anyone watching Fintech over the last decade has recognized an increasing shift of power from product manufacturers to the platforms where those products are sold. In the case of Amazon, Google, and Facebook -- finance is just a feature among thousands of others. I've made this point since 2017, when Amazon launched lending into its platform. Brett King has been a bit more generous in the categorization, calling the shift "embedded banking". This means that banking products are built into you life's journey, not accessed in a separate customer center location. The financial API trend is a tangible symptom of this vector.
Is embedded finance dead? Ahon Sarkar said your answer depends on where you fit into the ecosystem. Sarkar is the general manager of Q2’s Helix division. Helix works with companies to make personalized banking products.