Fintech

Staax thinks peer-to-peer payments can onboard a new generation of stock investors • ZebethMedia

By zebethcontrolPosted on October 18, 2022Posted in Battlefield, battlefield 2022, Disrupt, Fintech, investing, Staax, StartupsNo Comments

For better or for worse, Robinhood helped inspire a new generation of investors to enter the stock market. Now that investing is cool again, upstarts like Staax, which pitched today at ZebethMedia Disrupt’s Startup Battlefield, are finding new ways to cash in on its cachet, particularly among young people. Nikki Varanasi, Staax’s founder and CEO, was managing an $800 million fund-of-funds at McKinsey when she began to take notice of the lack of resources available to aspiring investors who wanted to get comfortable with the process. “When I looked at my friend group, who was still shy to invest or didn’t know where to start, I saw this huge gap when it came to institutional investing versus everyday people. There were resources on the market, like Robinhood, or whatever it is, but I think at the end of the day, there are still a lot of barrier points for the everyday, beginner investor to get in,” Varanasi told ZebethMedia. Her initial idea was to gift her friends shares of stock — a thoughtful gesture, she hoped, that could help them kickstart their investing journeys. Oftentimes, the barriers to investing are logistical, she explained. Once someone gets paid, there are a number of different, cumbersome steps they have to go to through in order to invest that money. “Because of the disposable income left in apps [like Venmo], it takes over a week to transfer to your bank and then to your brokerage. So for a lot of people, they just leave their money in there and they don’t invest it and that takes a hit with inflation,” Varanasi said. When Varanasi realized there wasn’t an existing platform that could help her send stocks directly to her friends, thus helping them bypass the onerous aforementioned process, she decided to build it herself. Staax is the result of her efforts, alongside her two co-founders, COO Lucy Yang and CTO Victoria Yang. Staax operates like a full-service brokerage in that its users who sign up open an investment account on its platform. They can buy and sell shares much like they could on Robinhood or Fidelity, Varanasi explained. What sets Staax apart, though, is that it allows for peer-to-peer payments in stock. Nikki Varanasi, CEO and founder at Staax pitches as part of ZebethMedia Startup Battlefield at ZebethMedia Disrupt in San Francisco on October 18, 2022. Image Credit: Haje Kamps / ZebethMedia “We want to turn assets into payments, because we believe that payments haven’t had a lot of evolution in the last 10 years,” Varanasi said. New users who sign up for Staax link the new brokerage account to their bank account and make a list of their top five preferred stocks to receive. Senders can’t gift shares of stock that aren’t on their recipients’ top five lists, which helps prevent unwanted transactions, alongside a feature that lets a recipient choose if and when to accept a stock gift. I asked Varanasi how the platform handles stock price movements that occur between when the shares are sent and when the recipient accepts them. She explained that the sender could gift someone a share priced at $10 each, for example, which would come out of the sender’s bank account in the form of cash. Then, if that share went up in price to $12, let’s say, the recipient could either accept the gift and would be on the hook for the extra $2, which would come out of their own bank account, or they could choose to accept the $10 in cash rather than in stock. For the sender, this system helps them avoid having to purchase the stock and sell it before sending it to the recipient in the form of cash. “What happens on Staax is we avoid taxes for the sender, because we use a ledger system based on cash on the back end, so you don’t need to own the stock to send it,” Varanasi said. According to Varanasi, the main use cases for Staax outside of gifting tend to be social, such as a friend paying back another friend for buying them coffee, but doing so in stock instead of cash. Staax’s co-founders, Nikki Varanasi, Lucy Yang and Victoria Yang. Image Credits: Staax “It’s not large amounts of money you need to stress about and it’s in the market, but it accumulates over time. And so [as an investor] you’re really in it for the long term strategy,” Varanasi said. It’s still early days for the company, which has raised $2 million in pre-seed funding since its founding in 2020. Its investors include Techstars and Western Union, which invested through an accelerator program for fintechs that Staax took part in, as well as VC firms Lightspeed, Harlem Capital and Hustle Fund as well as angel investor Litquidity (of finance meme account fame). Staax is still figuring out its path to monetization, though taking payment for order flow (PFOF) from market makers who execute trades on behalf of other companies’ users is a likely candidate, Varanasi said. It’s the same process Robinhood uses to make money while keeping its product free for users, but has attracted scrutiny from both customers and regulators. Varanasi said she isn’t worried PFOF will be banned in the U.S., because regulators have been talking about doing so for years but haven’t cracked down. Still, she drew a distinction between her plan to monetize Staax and Robinhood’s implementation of the same system. “We are exploring ways to make revenue on the back end through the trades, but in the most ethical way, because we know that PFOF can be controversial, especially when given to the wrong third party,” Varanasi said. In addition to PFOF, Staax is also exploring charging some users a fee for premium content from influencers and creators who partner with the startup as well as potential B2B partnerships down the line. Ultimately, Staax’s growth depends on its ability to build community because the social component is integral to getting users

Mother Honestly’s new commerce offering aims to give employees more freedom when it comes to caregiv • ZebethMedia

By zebethcontrolPosted on October 18, 2022Posted in Battlefield, battlefield 2022, Commerce, Disrupt, Fintech, Mother Honestly, StartupsNo Comments

Being a working parent is challenging. Being a working mother, according to many studies, is extra challenging. Many mothers have had the unfortunate experience of having to choose between their careers and children as the balancing act of both can be overwhelming. Factor in aging parents and the number of women who are caregivers for multiple people is greater than ever. To address this, Blessing Adesiyan launched Mother Honestly. Today, the company reaches more than 1 million working parents, caregivers, employers and business leaders. It has generated about $1 million in revenue since inception. And while its initial focus was on working parents, it has broadened its scope to help caregivers of all kinds — regardless of gender. Now, to further extend its reach, Mother Honestly is presenting a new commerce offering at ZebethMedia’s Startup Battlefield. Adesiyan had her first child while she was in college and remembers taking her daughter with her to an internship she had at one multinational corporation. Upon graduating, she started immediately working with Fortune 100 companies such as PepsiCo, DuPont, BASF and Cargill. Once she got into the workforce, she poured herself into her work while managing her caregiving responsibilities, and concluded early on it was “not designed” for her — “a single mother, a black woman that was a chemical engineer who really wanted to remain ambitious.” She knew she wasn’t the only working mother who felt that way, so she created multiple Employee Resource Groups (ERGs) within those companies around parents and caregiving. A bit scarred from her first foray into the corporate world, Adesiyan admits she was actually “terrified of having more kids” without her career being “solid.” Eventually, she had her second child nine years after giving birth to her first. All of the feelings she had when starting her career began coming back — the recognition of a lack of a reliable and affordable care infrastructure, a lack of support from her supervisors and having to spend a small fortune flying her parents back and forth from Nigeria to take care of her children when she had to travel for work. “I eventually ran out of money, and couldn’t keep flying them back and forth,” Adesiyan recalls. The straw that broke the camel’s back, so to speak, was when she was consulting for a large chemical company and was asked to travel to Morocco. She called her then-boss, asking if the company could provide a stipend toward meeting some of her caregiving obligations. Her boss’s response, Adesiyan told ZebethMedia, shocked her. “He told me it was important that I keep my professional and personal life separate, and that a male colleague had been doing this for 10 years and had never asked for that kind of support,” she recounts. “So I said, ‘No offense, my colleague is a white man with a stay-at-home wife who subsidizes the cost of care.’” Two weeks later, Adesiyan had landed another job, but she was still angry at the thought that she was “making millions of dollars” for a company which “thought it was too much to support” her caregiving needs. She added: “I was out of the country two weeks at a time, and I was a single mom, an immigrant with no real network to support me.” In frustration, Adesiyan turned to Instagram to ask others how they were effectively managing work and family. “People started sending DMs and videos, and she had amassed about 10,000 followers in three months,” Adesiyan recalls. That turned into a conference in Detroit that had hundreds of attendees from all over the country. And by 2018, Mother Honestly — a startup that Adesiyan says was “somewhat of an external ERG” — was born. The website was initially built to offer content and community to caregivers who needed support. “I wanted to support mothers holistically in balancing their careers and personal lives, and I wanted them to do it honestly without comparing themselves to others,” she recalls. “It became clear that only a parent could actually solve this problem holistically, so I like to think of our product as ‘built by mothers, for everyone.’” By 2020, Adesiyan left her job in engineering to focus full time on her venture. Current customers include Indeed, Care.com, Splendid Spoon, Bobbie, Nanit and more. Past customers include Lincoln, Google, JP Morgan Chase, Bright Horizons, Pacira and others. Bootstrapped since inception, Mother Honestly has thus far made money primarily from brand partnerships with the likes of Indeed, Care.com and Splendid Spoon, doing things like co-creating content for employee caregivers together. The natural evolution of Mother Honestly has led to the creation of something Adesiyan believes has been missing, but is crucially needed, in the workforce: a Work-Life Wallet. Mother Honestly will make money by charging a fee to provide the wallet that would give employees the freedom to spend on things such as caregiving or medical travel. Mother Honestly would serve as a middleman, either denying or approving the expenses based on predetermined categories so that employees would have privacy and not have do disclose personal details to their employers. For Adesiyan, widespread adoption would be a dream come true. “Employers, instead of wasting millions of dollars away at EAP (Employee Assistance Programs) that employees don’t use, can redirect their cash into the hands of their employees via our Work-Life Wallet, which they can customize who gets how much and over what time period,” she said.

Landis grabs $40M to turn renters into homeowners • ZebethMedia

By zebethcontrolPosted on October 18, 2022Posted in Cyril Berdugo, Fintech, GV, homeownership, Landis, VentureNo Comments

Uncertainty in the real estate markets and rising interest rates have delivered a blow to people eager to own their own home. But for Landis, it’s confirmation that the company is in the right place at the right time. Cyril Berdugo and Tom Petit founded the company in 2018 to provide a more accessible way for renters to become homeowners through financial education and coaching. The New York–based company’s model is for their client to have a budget and work with real estate agents to find a home within that budget. Landis buys the home in an all-cash offer on behalf of the client, who then rents the home from Landis. During that period of time, the company helps the client reach goals of qualifying for a mortgage to repurchase the home when they are ready, Berdugo told ZebethMedia. “There’s a lot of uncertainty in the real estate markets right now,” he added. “When interest rates go up or down, it greatly impacts the ability for Americans to reach homeownership. We underscore the importance of the stability that lenders provide to our clients. By creating a structure where we set a buyback price, it completely removes the uncertainty.” We previously profiled Landis in July 2021 when it raised $165 million of funding in a mix of equity and debt. At the time, the company was operating in 29 cities in 11 states, and now it is in over 50 markets, the company said. Today, the company announced $40 million in Series B funding, led by GV, which was joined by Sequoia Capital, Jay Z’s Roc Nation fund Arrive, the National Association of Realtors’ Second Century Ventures, Operator Partners, Signia Ventures and Team Builder Ventures. This now gives the company $222 million in total equity and debt funds raised to date. “With the current volatility in the house markets, our clients are looking for the stability that we provide them on their homeowner journey, so we saw an opportunity to raise capital to double down and allocate more funds to coaching clients to reach homeownership,” Berdugo said. Similar to last year, he declined to disclose revenue metrics, but did say the company’s valuation increased with the new round, and its team grew three times while the number of applications into Landis’s program increased by more than seven times since last year. The funding will be used to grow Landis’s two-year coaching program, add new markets and grow its team. The company will take $2 million of the new investment specifically for its coaching program, which provides personalized, one-on-one support to clients so they can meet milestones of improving their credit history and building savings. Once a client meets those goals, they are able to get a mortgage and become the owner of their home. Landis itself makes money when it buys and sells a home and doesn’t charge for the coaching, which is why Berdugo says it is “a big deal that we are investing in financial literacy and knowledge, because there is a massive opportunity for them to reach homeownership.”

Snapcommerce grabs its cape and becomes Super • ZebethMedia

By zebethcontrolPosted on October 18, 2022Posted in Commerce, debit card, Fintech, Hussein Fazal, Snapcommerce, SuperNo Comments

Mobile shopping experience company Snapcommerce is moving from commerce to fintech, unveiling both a new name, Super, and a new credit card product. The company, which raised $85 million last year, describes its SuperCash card as a “first-of-its-kind, debt-protecting card” that provides users with rewards and cash back in a way that enables them to build credit. Here’s how it works: anyone can apply for the card — there are no credit checks or minimum purchases — and it connects to the user’s debit card. So they spend the same way, but instead of not getting any rewards from the debit card, SuperCash users get a whopping 10% cash back on SuperTravel, 5% on SuperShop and 2% everywhere else Mastercard is accepted, Hussein Fazal, Super CEO, told ZebethMedia. When building Snapcommerce, the company noticed that the majority of its customers were paying with a debit card. “It’s because they typically didn’t have access to credit or they were afraid of credit, and in fact, 54% said they wanted access to credit and they couldn’t get it,” Fazal added. “Launching this SuperCash Card makes you think holistically about how all this stuff works together. For every spend decision our customers make, we want them to come to us because it’s a better way to spend because they’re going to save 20% to 30% on hotels and build a credit score while getting 2% cashback.” Radhika Duggal, Super’s chief marketing officer, told ZebethMedia that the decision to change the company’s name to Super was a move to continue to be top-of-mind with customers. “It really delivered on the mission that we’re trying to focus on which is enabling consumers to spend less, save more and build credit to make the most out of their lives,” Duggal said. “‘Super’ was a word that we really gravitated to because it had strength, excitement and positivity associated with it. We want consumers to feel that way and feel good about the decisions that they make.” Fazal explained the strategy for pivoting from a commerce focus to a fintech focus was centered around Super’s customers and understanding how to better serve them. The company relies on a lot of data, and when it was telling them that customers didn’t just want to save more, but needed to save more, he felt Super was in a “unique position to be able to help them do that” by moving closer to the intersection of commerce and fintech and by removing barriers to a better credit score. Meanwhile, Super had been operating with a waitlist, of which Fazal said 10% of its over 7 million customers had signed up, and officially opened up its credit applications today. To date, Super raised over $100 million in venture-backed capital, surpassed $1 billion in sales, saved consumers $145 million, and, based on its last quarter, has over $100 million net revenue annualized business, Fazal said. In the past year, the company also increased its head count from 70 to 200 employees. “Hitting those growth levels has resulted in a lot of inbound interest from investors,” he added. “We have a lot of cash on the balance sheet, so we aren’t aggressively going to try and fundraise, but sort of given all the inbound interest, we probably will close on some funding before the end of the year.”

PayPal debuts a new rewards program that combines Honey’s discounts with other ways to earn • ZebethMedia

By zebethcontrolPosted on October 17, 2022Posted in Apps, discounts, e-commerce, Fintech, PayPal, rewards, shoppingNo Comments

PayPal is taking a step away from the Honey brand, the $4 billion shopping rewards acquisition it made in 2019, with today’s launch of PayPal Rewards. The new program will replace “Honey Gold” — the rewards program for Honey browser extension users, which allows customers to redeem their points for cash, gift cards or PayPal shopping credits. With the new PayPal Rewards, consumers will be able to track and redeem their points directly inside the PayPal app, and will have new ways to earn, the company says. The deal for Honey was intended to give PayPal a better position in the face of the increased competition in the payments space from larger rivals, including Appl, Google and even Facebook (now Meta). The battle for consumer adoption of online and mobile payments had shifted away from the checkout page itself, to compete against all the other places people go to discover, browse, get inspired and deal-hunt — including on retailers’ sites and on social platforms, like Instagram, Pinterest, and today, TikTok. A rewards program, like the one offered by Honey, works to entice users by offering promo codes and coupons for favorite retailers, while redirecting them away from Amazon with better prices. Features like the price tracking “droplist” also help consumers find the best deals on items they’re considering. And, with last year’s revamp of the PayPal app, personalized deals and rewards became a larger part of the mobile experience as well. This year, PayPal customers have saved nearly $200 million through the Honey cash back and discounts program, says PayPal. With the launch of PayPal Rewards, the company is now combining the rewards being offered to PayPal customers across multiple PayPal products, including the Honey browser extension, the PayPal app, and, in the future, various card products. Rewards will also be given its own dedicated spot in a new part of the PayPal app, where shoppers can track and redeem their points as they earn. When customers want to redeem their points, there won’t be category restrictions or account minimums, the company notes, and the points can be converted to cashback at a rate of 100 points equaling $1 USD. Once redeemed as cash, the funds can be transferred to a linked bank account, deposited into a PayPal Savings account, donated to a charity, or sent to someone else as a peer-to-peer (p2p) payment. With the new in-app hub, customers will also be able to earn points through personalized engagement in the PayPal app, in addition to the browser extension, and will be able to be stacked with the rewards earned from their payment card programs. This personalized engagement introduces a new way for a customer to earn PayPal Reward points by doing things like linking a debit card or bank account to their PayPal, for example. If the customer has already done so, they might be presented with a different action to take. Image Credits: PayPal The company is touting the move ahead of the 2022 holidays and traditionally, the biggest quarter for online shopping. This year, however, the e-commerce landscape is looking a little different, with more spending expected to start earlier thanks in part to Amazon’s decision to host a second Prime Day event in October, leading other retailers to follow suit. Still, Adobe predicts consumer spending will still increase this year by 2.5% during the Nov. 1-Dec. 31 time frame, reaching $209.7 billion. “With the financial challenges people face these days, brought on by rising prices and the need to tighten budgets, it can be frustrating to shop for everyday essentials or plan for the holidays,” said Greg Lisiewski, Vice President of Shopping and Global Pay Later, in a statement about the launch. “PayPal Rewards makes it easy to find sales, discounts, and great deals when making a purchase with PayPal – through cash back, discount codes, or other rewards,” he said. Image Credits: PayPal

Nigerian banking-as-a-service platform Maplerad raises $6M, led by Peter Thiel’s Valar Ventures • ZebethMedia

By zebethcontrolPosted on October 17, 2022Posted in africa, Fintech, Maplerad, Venture, WirepayNo Comments

Banking-as-a-service (BaaS) platforms have taken off rapidly across the fintech world over the last 18 months. By partnering with banks, these platforms allow entities from startups and fintechs to big corporations and banks to provide tailored banking services and experiences to their customers. Fintechs offering BaaS services in U.S. and Europe, such as Unit, Rapyd and Treasury Prime, have achieved significant scale due to the developed banking systems they enjoy in their markets. However, their counterparts are trying to replicate this growth in less advanced banking systems like Africa, where the demand and scalability of such products are unproven. In the latest development, Maplerad, a fintech described by its founders Miracle Anyanwu and Obinna Chukwujioke as a global BaaS player targeting Africa, has raised $6 million in seed funding. According to sources, the U.S.-based Maplerad, which is coming out of stealth, raised the round at a $30 million valuation. The founders declined to comment. Maplerad’s journey as a company can be traced back to 2020, when the founders launched its first product, Wirepay. The app started with helping users make international payments by offering cross-border payment solutions in fiat and cryptocurrency. However, it has since shifted into a self-described all-in-one finance product that enables users to receive, hold, and make payments in multiple currencies, create virtual and physical cards, and pay bills. Last year, Wirepay raised an undisclosed pre-seed, including a $125,000 check from OnDeck. Golden Palm Investments Corporation, Greenhouse Capital, some Stash executives, and Berrywood Capital were other investors in the round. As Wirepay grew to over 50,000 users, mainly in Nigeria, Anyanwu, on a call with ZebethMedia, said businesses began to inquire about the in-house infrastructure powering the features on its consumer app. “People wanted to use the infrastructure powering Wirepay, our license coverages, and banking relationships,” the CEO and CTO stated. Anywanwu also mentioned that Maplerad (the parent company) had always wanted to spin off this infra for other businesses. However, when outside requests flocked in en masse, they finally arranged to beta-launch Maplerad, the infra product that allows companies to embed powerful financial features like accounts, payments, FX, and cards into their products, this August. “From day one, when we built Wirepay for our consumers, we knew the end move would be infrastructural even though we didn’t start the business infrastructure first. For anyone to build anything finance-related, they have a whole lot of banking stack that they have to start with and even before integrating features, they have to go past many hurdles,” said the chief executive. “One of them is banking relationships and compliance. The other is licencing. So Maplerad is solving financial infrastructure problems for these businesses in Africa. We handle that whole stack and provide the best-in-class APIs to use that can make you launch a financial product within five minutes. So instead of a company spending 8 months and a couple of million dollars to start building a fintech product, you can integrate with our APIs and go live.” Banking-as-a-service platforms have become popular with companies trying to embed financial services into their offerings because large, incumbent banks have been relatively slow to bring their services up to speed with the pace of change in the world of tech and banking. As such, banking-as-a-service platforms see an opportunity to provide more personalized services and flexibility at less cost. The space is heating up—some of Maplerad’s competitors in Nigeria include YC-backed Anchor, Bloc, OnePipe and larger fintechs such as Flutterwave. In an interview with ZebethMedia this August, Anchor CEO referenced his founding team’s technical experience, attention to security and scalability and the speed at which businesses can go live on its platform when asked about the startup’s edge over others. Posed with a similar question, Maplerad founders referenced the platform’s “wider range of banking relationships,” “a tech second to none,” and having the “best institutional investors/partners.” In tandem, James Fitzgerald, a partner at Valar Ventures, speaking on the investment, said as large parts of Africa’s population remain financially excluded despite the continent’s maturing economies, “there’s a huge opportunity for Maplerad which is the best-in-class banking as a service solution to provide businesses with the financial infrastructure to scale across Africa and globally quickly and seamlessly.” The Peter Thiel-founded VC firm led Maplerad’s seed round, its third African investment after Kuda and Yellow Card. Other investors in the round include Golden Palm Investments Corporation, Michael Vaughn (ex-COO, Venmo), Fintech Fund, Babs Ogundeyi (CEO, Kuda) Armyn Capital, Dunbar Capital, Strawhat Investment, Polymath Capital, Unpopular Ventures, Sean Mahsoul and MyAsiaVC. The founders said they also invested their money into the company. While in stealth, Maplerad processed millions of dollars monthly for over 100 businesses acquired onto its platform, including startups such as Pastel, Spleet, Bridgecard, Onboardly, Vella, Crowdforce, Dojah, GetEquity, and a few banks. It plans to use the investment to acquire more customers now it’s out of stealth, get additional licences, build its team and solidify its presence across Africa.

Even decacorns have their challenges • ZebethMedia

By zebethcontrolPosted on October 16, 2022Posted in financial technology, Fintech, Startups, The InterchangeNo Comments

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 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’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 Hello, hello. By the time you’re reading this, we’ll be two days away from ZebethMedia Disrupt! Soooo exciting! But first, let’s talk about fintech. Last week’s big news was corporate spend management startup Brex’s announcement that it was laying off 11% of its staff, or 136 people. It was also revealed that the startup’s CFO, Adam Swiecicki, is departing to join Rippling as its CFO. Notably, workforce platform unicorn Rippling recently entered the corporate management space, making it a direct competitor with Brex. First off, it’s rare — and refreshing — for a company to actually proactively share news of a layoff, so it’s interesting that Brex got ahead of any gossip and let me know firsthand of its plans. And as Alex Wilhelm pointed out on Friday’s Equity podcast, the layoffs appear to mostly be related to Brex’s move earlier this year to no longer work with SMBs and nonprofessionally funded startups. In other words, the company said it primarily let go of people who were focused on serving that group. Still, it must suck for those employees — especially considering those groups that it no longer works with were initially Brex’s bread and butter. Bigger-picture-wise, the news of Brex’s layoffs show that even decacorns have not been immune to this downturn. The company earlier this year confirmed a $300 million Series D extension at a staggering $12.3 billion valuation. And while the company claims to be “in a strong financial position with many years of runway,” it adds that its shift away from SMBs to focus more on enterprise customers — and, by default, any related layoffs — will put the company “on a path to sustainable profitability over the next few years.” Side note: Brex aside, it still blows my journalist mind that companies in general can raise hundreds of millions of dollars in funding and yet not be profitable. I am doubtful that I could ever be a venture-backed startup founder. The pressure of having to provide returns to investors who poured that kind of money into my company and the pressure of not wanting to ever have to lay off staff would likely make me lose sleep at night! Guess that’s why I’m a journalist and not a startup founder! Anyway…speaking of Disrupt and Brex, I will be interviewing co-founder and co-CEO Henrique Dubugras and Anu Hariharan, managing director of YC’s growth fund, YC Continuity, live in a Fireside Chat on October 19! I’ll also be talking to Ramp CEO and co-founder Eric Glyman, Airbase CEO and founder Thejo Kote and Anthemis partner Ruth Foxe Blader in a session called “How to Compete without Losing Your Mind and Runway When Cash Is Expensive” that same day. And lastly, I’ll be chatting with Rippling CEO and co-founder Parker Conrad about his company’s plans to “go global.” Come see us! (Get 15% off here). Oh, and if you want to hear me talk about everything from “The Good and Ugly Sides of Fintech, What Great Journalism Really Means, & Why Startups Represent Hope,” check out this episode of the Fintech Leaders podcast I recently recorded with VC Miguel Armaza. VCs clamor to fund real estate investing startups Image Credits: Edwin Remsberg (opens in a new window) / Getty Images Hello! It’s Anita Ramaswamy reporting from the fintech desk here at ZebethMedia alongside Mary Ann. We’ve been seeing a lot of interest — and funding news — in the real estate and proptech spaces lately. Specifically, there have been a number of startups raising rounds for real estate investing apps that aim to help broaden access to the asset class to retail investors by giving them tools to bypass hurdles like large up-front capital requirements that are typically necessary to invest in property. Fintor is one such example. The startup recently closed on a $6.2 million funding round at an $80 million valuation for its platform that offers fractionalized shares in residential properties to investors for as little as $5. We’ve also covered similar platforms such as Landa, Nada and Arrived Homes, all of which have raised new funding in 2022. The surge in interest among retail investors for access to real estate might seem counterintuitive given that rising interest rates make real estate seem less attractive than it has been for the past few years. But these startups are likely more focused on long-term, secular demand growth for real estate as a part of a diversified portfolio rather than getting caught up in concerns around short-term volatility. Here’s what Fintor founder and CEO Farshad Yousefi had to say about the current market environment in an email to ZebethMedia: While recent media headlines have mainly focused on the volatility of the market, there are still present opportunities for investors to take part in investing in real estate with the right type of strategic approach. For example, Atlanta has seen an incredible near 12% year-over-year growth in rental rates, directly boosting investors’ cash flows. Additionally, when looking across the board at the top MSAs, major institutional investors have seen a near 50% jump in renewal rent growth. This drastic upward trend in tenant retention clearly demonstrates where rental demand is going. For a deeper dive into real estate tech and how it’s changing the investing landscape, check out my article in TC+ this week: Weekly

India launches 75 digital banking units across rural areas in financial inclusion push • ZebethMedia

By zebethcontrolPosted on October 16, 2022Posted in digital banking, Fintech, Government & Policy, india, narendra modiNo Comments

India on Sunday launched 75 digital banking units in villages and small towns across the country in a move that it said will help bring financial services and literacy to more citizens. The digital banking units, set up in collaboration with over 20 public and private banks, are brick-and-mortar outlets that are equipped with tablets and internet services to help individuals and small businesses open their savings accounts, access government identified schemes, perform verifications, make transactions and avail loans and insurance. The physical outlets, span across all Indian states and union territories, will provide services in two modes. “Self-service mode will be available 24x7x365 days,” said Shaktikanta Das, Governor of Reserve Bank of India, in a virtual conference. “The banks are also free to engage the services of digital business facilities and correspondence to expand the footprint of DBUs,” he said. Das said the units will also offer a digital assistance zone to answer queries from individuals and small businesses and hear their grievances. Availing banking services has traditionally been a struggle for people living in villages and small towns, said Prime Minister Narendra Modi. Even as more than a billion bank accounts exist in India, people living in remote areas have had to typically take a day off from the work to visit a nearby city for their banking related work. “We have given top priority to ensure that banking services reach the last mile,” he said. “We not only removed the physical distance but, most importantly, we removed the psychological distance.” The digital banking units are part of the Modi government’s years-long efforts to serve people in the far flung areas of the country. The government launched Jan Dhan Yojana, a scheme to get all citizens access to banking and financial services in 2014. More than 470 million bank accounts have been opened as part of the scheme, “Today the entire country is experiencing the power of Jan Dhan Bank accounts,” said Modi. “This opened the way for loans for the poor without collateral and provided Direct Benefit Transfer to the accounts of the target beneficiaries. These accounts were the key modality for providing homes, toilets, gas subsidy, and benefits of schemes for farmers could be ensured seamlessly. The IMF has praised India’s digital banking infrastructure. The credit for this goes to the poor, farmers and labourers of India, who have adopted new technologies, made it a part of their lives,” he said.

Former VC brings smart financial advice to people who really need it, instead of just the rich • ZebethMedia

By zebethcontrolPosted on October 13, 2022Posted in financial advice, Fintech, ggv capital, NorthStar, StartupsNo Comments

Will Peng graduated from Princeton with about $35,000 in debt. He asked his immigrant parents what they thought the best approach would be for him to pay it off. “There were companies telling me that I should refinance my student loans,” recalls Peng, who is the second oldest of six children born in Taiwan. “I was also not sure how I should balance paying off my student loans while building an emergency fund and putting money into my 401(k).” So he searched Google and “read a lot of NerdWallet articles” but still “made a ton of mistakes.” It was at that point that Peng realized that he was likely not alone in his struggles and so the idea for his startup, Northstar, was born. Realizing that receiving financial advisory services is often a luxury reserved for the upper middle class or affluent, Peng decided the best way to make such services more accessible was to partner with employers to offer a financial wellness benefit to their employees. “We want to build financial wellness for the 100%, not just the 1%,” he said. Specifically, Los Angeles-based Northstar has developed a set of personal financial management tools to help guide employees through various financial and life situations with the aim of helping them understand “the full value of their compensation, equity, and benefits.” While many of its clients are in the tech space, they “range in size and industry” and include private and public companies, according to Peng. For example, Northstar’s customers include the likes of Zoom, Snap, 23andMe, Virgin Orbit and, ironically, NerdWallet. The company charges employers a monthly subscription based on headcount to give employees one-on-one access to a full-time financial advisor employed by Northstar. Employees pay nothing and there is no commission involved. Northstar pairs employees with the same advisor so they can feel comfort and familiarity rather than have an employee talk to a different individual every time they have a question. And as the company has built out its financial advisor team, the company has been intentional about hiring diverse staff so that employees are more likely to talk with people with similar backgrounds as their own. It appears that Northstar’s services are in more demand than ever in the current challenging macro environment, according to Peng, who was previously a general partner at Red Swan Ventures for nearly a decade and an early investor in Coinbase, Guideline, Even and Oscar. While the CEO declined to reveal hard revenue figures, he did tell ZebethMedia that Northstar’s revenue has grown “over 5x” year-over-year and that the expectation is that it will grow 3x year-over-year next year. Since December 2020, the company has grown its customer base by more than 600%. “We’ve found that financial wellness is just a broad topic, regardless of distribution channel or how it’s actually done,” said Peng. “It is needed in good times, but especially in bad times.” And today, Northstar is announcing that it has just raised $24.4 million in a new funding round led by GGV Capital that according to Peng, took a remarkably fast time to close in a very challenging fundraising environment. “The time from the first meeting to the term sheet was about a month,” he told ZebethMedia. New investors PayPal Ventures, Thomson Reuters Ventures and Canvas Ventures joined existing backers M13, Workday Ventures, Parade Ventures, Foundation Capital, Designer Fund and RRE in participating in the round, which brings Northstar’s total raised to $40 million since its 2016 inception. While he declined to reveal valuation, Peng noted that the new financing was a “significant up round.” The need for its offering is greater than ever because, in Peng’s view, while consumers have access to more “great” tools than ever, they still lack the knowledge to know what to do with them. “It’s actually exacerbated the problem — this unfair expectation that individuals actually know what to do with their finances,” said Peng. “Financial advice is something that fundamentally everybody needs. It’s not just those who have equity compensation, for example,” he added. “If you get a paycheck, if you get benefits, then you deserve financial advice.” Image Credits: Northstar co-founders Matt Matteson (CTO) and Will Peng, CEO Northstar, for example, can help employees with things like understanding life insurance or whether or not a high deductible health plan is the best fit if you’re preparing to have children. “It’s this really holistic approach that combines everything that you receive from the employer under one roof,” Peng said. Presently, Northstar has about 50 employees. It’s looking to double or triple its headcount with its new round of financing. The company also has contractors that serve as financial advisors to employees in the 18 countries — such as Canada, United Kingdom, Germany and France — in which Northstar is operating. The company hopes to be in 30 countries by the end of 2023. GGV Capital managing partner and Northstar board member Hans Tung tells ZebethMedia that his firm invested in Northstar because it shares “the vision that financial wellness should be universal for all employees.” “Financial advice has been around for many years, yet most consumers do not have access to financial advisors at affordable rates and enabled by tech, creating a huge market,” he added. “As a global investor, we look for companies that democratize technology for underserved markets and want to ‘go global.’” My weekly fintech newsletter, The Interchange, launched on May 1! Sign up here to get it in your inbox.