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
Today we're joined by Brett King, founder and executive chairman of Moven, one of the world's original digital banks, and Lex Sokolin, global head of fintech at ConsenSys. Lex and I discussed Moven's recent announcement to shutter its B2C business on episode 170 of Rebank. And we're happy to have the opportunity to connect with Brett directly to discuss the decision in more detail.
This week, we look at Betterment launching a bank account and payments feature. They are not the first, but they could be the best! Still, it feels like the world has moved on. Barriers to entry around digital finance have collapsed, and shifted industry goal posts. Hundreds of companies are integrating API-based solutions that connect to banking and investment entities. Amazon, Google, and Apple are there already. And let's not forget the incredible pressure from the COVID recession: 20MM+ unemployed, $100 billion decrease in global remittances, 1 in 8 banks being unprofitable. Is it time for incremental improvement, or a sea change?
This week, we look at:
The economics of Southeast Asia’s largest super-app and its $40 billion SPAC valuation
The industrial logic of building out financial features adjacent to the core business of transportation and delivery
Why this model has not worked for Uber, but has worked for Apple, and the broader impact on financial services.
I examine the unbelievable transformation and restructuring happening in high finance. Global bank HSBC is planning to lay off over 10% of staff, looking at reductions of 35,000. E*TRADE is being acquired by Morgan Stanley, integrating its 5,000,000 accounts and $360 billion of assets into the Wall Street investment firm. Legg Mason and its $800 billion of assets are being folded into Franklin Templeton for $4.5 billion, less than what Visa had paid for fintech data aggregator Plaid and half of what Robinhood is likely valued privately. How do we make sense of these developments? How do we appeal to the heart?
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.
The evolution towards a financial metaverse is rapidly accelerating, with the growth in generative assets, profile picture avatars, the emerging derivative structures that build on their foundation, and DAOs that govern them. This article highlights the most novel developments, and builds the case for what a digital wallet / bank will need to be able to do in order to succeed on the way to this alien destination.
In news of cross-selling financial products across categories, roboadvisor Wealthfront has gathered a nifty $1 billion of deposit assets for its 2.29% interest-yielding non-bank cash account. Given that the firm has a little over $10 billion in managed investment assets, charges somewhere between 0 and 25 bps on those assets, and took years of wiggly pivoting to get to the current stage, it is fair to consider this influx a big win in terms of client traction. It is also $22 million of annual interest payments. A couple of things come to mind that are worth pulling apart.
This week, we look at:
The financial model behind Monzo, and comparisons to Revolut and Starling
How the Eastern super apps inspired the marketplace model, and why that success is hard for neobanks to replicate
Paths from losing $100 million per year to break-even and enabling digital assets and other financial products
Facebook Financial forming to take over payments and commerce
The tech companies will become the storefront to absolutely everything.
There is no Internet, there is only Google.
There is no commerce, there is only Amazon.
There is no finance, there is only WeChat / Tencent?
I don't know about you, but I cannot pay for anything in cash in London anymore. COVID has made the city go cashless. For China, QR codes have long replaced the need for paper money. And if there is no cash, what is the point of ATMs, and ATM fees, and bank branches, and bank branch staff? Financial firms no longer need to be the place where you shop for financial product.
