Welcome to The Interchange! If you received this in your inbox, thank you for signing up and your vote of confidence. If you’re reading this as a post on our site, sign up here so you can receive it directly in the future. Every week, I’ll take a squint at the hottest fintech news of the previous week. This will include everything from funding rounds to trends to an wringer of a particular space to hot takes on a particular visitor or phenomenon. There’s a lot of fintech news out there and it’s my job to stay on top of it — and make sense of it — so you can stay in the know. — Mary Ann
Last week, my good friend and and Equity podcast co-host Natasha Mascarenhas and I reported that Amazon had struck a deal with embattled online mortgage lender Better.com to offer up a new goody to employees. Specifically, Better.com spoken it was launching Equity Unlocker, a program that allows employees to use their vested probity as collateral for a lanugo payment when trying to buy homes. Amazon employees in Florida, New York and Washington State will be the first to try the tool. Unique well-nigh the program, equal to Better.com, is that employees will have the worthiness to finance their homes without unquestionably selling their shares, only needing to pledge vested equity.
The news, quite frankly, came as a bit of a shock to those of us who have been pursuit the goings-on at Better.com. For the unfamiliar, the fintech visitor has had its pearly share of struggles that have tint doubt on its future. Last May, TechCrunch reported on a filing that revealed that Better.com had swung to a loss of increasingly than $300 million in 2021 without a rapid-fire ripen in merchantry brought on largely by a slowdown in the housing market and a surge in mortgage interest rates. Then in the first quarter of 2022 alone, Better.com recorded a staggering net loss of $327.7 million, equal to an SEC filing.
The company’s reputation moreover took a huge hit over the manner in which it conducted numerous rounds of mass layoffs, which moreover resulted in an executive exodus. Better.com moreover made headlines last July when it appeared to still be moving forward with its SPAC filing despite lackluster performance of blank-check combination debuts.
So why would Amazon want to be associated with, and connect its own employees to, a visitor that appears to be far from growing and has a less-than-stellar reputation? Well, we asked Amazon just that (not in those word-for-word words, of course). And the spokesperson told me lots of things well-nigh how the visitor wanted to provide all sorts of wellness benefits to its employees and this fit into that thesis. But he never specifically answered, “Why Better.com?” The fintech itself noted that it has been an Amazon Web Services consumer since 2015 and its loan-origination system is powered entirely by the software. A very quick Google search on the part of TC senior reporter Rebecca Szkutak turned up at least two other online mortgage lenders who are moreover AWS customers, so surely the retail giant had other options.
Beyond that, the idea of giving employees the option to use vested probity toward the purchase of a home just doesn’t….seem very appealing. What if the shares waif in value? How does it plane work? Who plane has unbearable vested probity to use as collateral? On top of that, Better.com says it will tuition 0.25% to 2.5% higher interest rates for employees who segregate to purchase a home this way. Mortgage interest rates are once upper unbearable these days — hovering virtually 6%. Tacking on flipside 2.5% pushes someone into the 8% range. Needless to say, we are all super curious to see how this ends up panning out and I plan to trammels when in well-nigh it in a few months.
Meanwhile, speaking of Better.com’s SPAC filing, HousingWire reported last week that “blank-check firm Aurora Acquisition Corp. extended the deadline to well-constructed its merger with struggling digital mortgage lender Better.com for the third time. The deadline for the merger is now September. The visualization was made during Aurora’s shareholder’s meeting held on February 24, filings with the U.S. Securities and Exchange Commission (SEC) showed.”
The notion that Better.com, which has had so many setbacks and so much negative publicity, could unquestionably go public in an environment where plane companies that are growing and can share positive financial metrics are hesitating is pretty difficult to believe. I, for one, am very curious as to how the visitor is staying afloat.
To hear the Probity team’s thoughts on the Amazon/Better.com partnership (and much more!), listen to the podcast here. And while you’re at it, tune in to my one-on-one conversation with Index Ventures partner and fintech lead Mark Goldberg. We had a wham discussing everything fintech and Mark didn’t hold back! Oh, and ICYMI, I moreover spoke with Hans Tung, managing partner of GGV a few weeks back. You can reservation that super interesting convo here.
Weekly News
Reports Romain Dillet: “The all-in-one fintech app Revolut has released its yearly report for 2021. While 2021 ended increasingly than a year ago, this report includes some significant figures as the visitor nearly tripled its revenue between 2020 and 2021. Because of this explosive growth trajectory, the UK digital wall reached profitability for the first time. Revolut’s financial success starts at the top of the funnel. At the end of 2021, Revolut had increasingly than 16 million customers, representing a 46% increase compared to 2020.”
Last week, we wrote well-nigh Klarna’s momentum in the U.S. This week, the Swedish payments giant revealed that despite a large ($1 billion) operating loss in 2022, it expects to return to profitability this year. In this piece, Alex Wilhelm asks, “How much progress is Klarna making toward profitability?” He wrote: “The former startup has had a publicly difficult few quarters. From seeing its valuation cut sharply to layoffs, the news virtually Klarna has been negative for some time. Now that we have the company’s financial data, we can take a increasingly detailed squint at how it performed tween all the noise.”
Reports Aisha Malik: “DoorDash is launching its first-ever credit card with Chase. The DoorDash Rewards Mastercard will provide cardholders the opportunity to earn mazuma when on wordage and every other purchase made with the card…The launch of the new credit vellum indicates that DoorDash is looking for ways to momentum consumer loyalty and alimony its platform at the forefront of its users’ minds. The move moreover gives DoorDash the worthiness to offer spare perks for users while opening up new revenue streams.”
Reports Carly Page: “Hatch Bank, a digital-first wall that provides infrastructure for fintech companies offering their own trademark credit cards, confirmed hackers venal a zero-day vulnerability in the company’s internal file transfer software that allowed access to thousands of consumer Social Security numbers.”
London-based Wise, formerly tabbed TransferWise, launched two new products in the U.S. — Wise Merchantry cards and sending money with a link. It moreover revealed a new trademark squint that it says “draws inspiration from its now 16 million customers worldwide.” The visitor moreover told me via email that since publicly listing on the LSE in July 2021, it has grown its global consumer wiring by nearly 6 million.
Amsterdam-based payments behemoth Adyen claims that it has wilt the first to embed the Click to Pay wits into its online checkout spritz globally. Via email, a spokesperson told me: “When purchasing online, the majority of ‘guest shoppers’ are typing in their vellum details manually in order to make a purchase.” Equal to the spokesperson, the Click to Pay full-length is “a new way of paying online that combats the risk of drop-off at the checkout stage” with benefits such as simplifying checkout, stuff increasingly secure (the primary worth number is not typed in at checkout and the shopper receives a one-time password), and stuff universal in that it can be used wideness both devices and browsers. Increasingly here.
Reports PYMNTS.com: “San Francisco-based financial services platform Modern Treasury is introducing a product tabbed ‘Global ACH’ which it bills as ‘a new payment service’ that enables lower-cost cross-border transfers than options like SWIFT by utilizing local payment rails. To launch Global ACH, Modern Treasury is partnering with Silicon Valley Bank…Modern Treasury said Global ACH ‘provides a number of advantages over current cross-border payment options” in that it’s less expensive than SWIFT and other third-party options.”
After we covered Stripe’s Tap to Pay news last week, PayPal reached out to let us know that it had launched Tap to Pay on Android in the U.K., The Netherlands and Sweden in May 2022. It’s since launched in spare European Markets. Here’s the release announcing our launch in the U.K. on May 5, 2022. It is moreover working with Apple on Tap to Pay, which Ivan Mehta reported on in November.
Did you know that there is a neobank targeting doctors? Panacea Financial describes itself as a “bank built for doctors, by doctors.” Via email, a visitor spokesperson told me: “One young doctor’s car wrecking and another’s hope of refinancing his $300,000 student loans led to the creation of Panacea to help other doctors with similar needs and more.”
Other news
Greenlight offers new workplace financial benefits designed for families
Public.com announces that higher yield “treasury finance are now misogynist to all”
Robinhood Wallet is now misogynist to all iOS customers globally
Wealthfront introduces stock investing
Step launches stock investing for teens and young adults
First Fidelity Wall enters BaaS space with Episode Six partnership
Image Credits: DoorDash
Funding and M&A
Seen on TechCrunch
Insurtech giant Equisoft lands $125M investment, vision acquisitions
Born of drone tech, insuretech Flock raises $38M Series B to nudge commercial drivers towards safety
Pagos raises $34M as the demand for ‘payment intelligence’ rises
Spade turns credit vellum transaction gibberish into clear, violating data
Varo, Stripe said to be raising new funds at much lower valuations
And elsewhere
Highway Benefits raises $3.1M in seed funding
SoftBank leads Series A for Chilean startup Rankmi, which merges with Mexican payroll provider Osmos
TTV Capital closes Fund VI at $250 million to invest in early-stage fintechs
Fintechs That Are Hiring
The good news is that I have been inundated with DMs and emails from people letting me know that their fintech visitor is hiring. The bad news is that there is no way I can include all of them in this week’s newsletter. So if you reached out and don’t see your visitor here, trammels out upcoming editions of The Interchange. I’m making my way lanugo the list!
- Corporate spend management (and fully remote) visitor Airbase, which secured $150 million in debt financing from Goldman Sachs last July, is hiring wideness about 18 roles.
- Wealthfront, which last year landed $69.7 million from UBS in a deal valued at $1.4 billion without a planned merger fell apart, has 17 unshut positions wideness engineering, design, marketing, finance, and more.
- SmartAsset, a marketplace that connects consumers to financial advisors and raised $110 million in a Series D round of funding in June of 2021 at a unicorn valuation, is hiring wideness several remote roles.
- Alternative investments platform iCapital, which has over $150 billion AUM, says it’s hiring for 100 roles.
- Fintech-focused communications organ KCD PR is hiring and has several unshut positions with plans to add 3–5 roles in 2023.
Thinking of coming to Disrupt this year? We’d love to have you! But FYI, this is your last endangerment for super-early-bird tickets. That’s it for this week! I’m off to enjoy the 70-something- stratum weather here in Austin while I can. Hope you all have a wonderful weekend — see you next time. xoxoxo, Mary Ann
Amazon and Better.com’s unlikely pairing by Mary Ann Azevedo originally published on TechCrunch
