welcome to the exchange! If you got this in your inbox, thanks for signing up and your vote of confidence. If you are reading this as a post on our site, sign up here so that you can receive it directly in the future. Every week, I’ll take a look at the latest fintech news from the previous week. This will include everything from funding rounds to trends, an analysis of a particular space, and opinions 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 on top of it. — maria anna
Hello, and welcome back. We finally got our power back on after the ice storm and I feel better after a cold, but since I’m not running at full capacity yet, this newsletter will be a bit abbreviated.
Rebranding is not uncommon in the startup world, and the fintech space is no exception. They are particularly frequent when companies rotate to adapt to external circumstances. Last week TripActions announced it would be rebranding and is now called Navan.
I for one was not at all surprised by the news as TripActions transitioned from a travel expense management company to a corporate card and general business expense management shortly after the COVID-19 pandemic in March of 2020. In 2021, CEO and co-founder Ariel Cohen told me that his revenue didn’t just drop, it bottomed out. . . steel. That’s when executives decided to focus their efforts on their then-new Liquid offering, which appears to have worked quite well for the company. In October, amid its continued growth, the company raised $154 million in capital at a post-money valuation of $9.2 billion, up from its previous valuation of $7.5 billion, as well as a $150 million structured finance deal from Coatue. Then, in December, it secured $400 million in credit lines from Goldman Sachs and Silicon Valley Bank (SVB).
Their rebranding is apparently more than just a name change. The company said it has now unified its travel, corporate and spending offerings into “one super app.” On top of that, Navan, a combination of browse and Vanguard (or forward) – intended to be the first travel company to integrate the OpenAI and ChatGPT APIs into your infrastructure and product suite.
The company says that it is currently using generative AI technology to write, test, and fix code with the goal of increasing its operational efficiency and reducing overhead. So now, through Ava, Navan’s virtual assistant, travel managers can personalize recommendations and increase traveler engagement, executives say. They also say that administrators can use the tool as a personal assistant to perform tasks like running custom data analytics, providing granular carbon emissions details, or requesting corporate cards for your company. Meanwhile, travelers can do things like run a travel search, solve customer service issues, and even recommend an Indian restaurant near their London hotel, for example.
A company spokesperson told me via email: “Program administrators will be able to ask Ava to report on travel and expense programs, either via text, graphic, PDF, etc. We also use AI to do everything from spend elimination reporting to automate breakdown, and in the case of hotel postings, instantly retrieve them from the hotel after a stay, categorize line items, compare them to the company policy and we send them to the user, so they are not necessary [to] move pennies to balance a folio, a process that is quite painful in my experience.”
Personally, we’ve been wondering at TC when generative AI was going to make an impact in the fintech space, so I’m intrigued by this move on the part of TripAction, I mean Navan.
But I should point out that Navan was not the only company in the financial services space to announce that it was incorporating AI into its products.
Last week, TechCrunch’s Sarah Perez reported that Microsoft and American Express announced they were teaming up to put AI to work “to help with the frustrating and time-consuming task of filing and auditing corporate expense reports.” She wrote: “The companies have agreed to expand their decades-long partnership to create solutions that leverage Microsoft Cloud and AI technologies, starting with expense reporting management. According to Amex, the initial solution will leverage machine learning and AI to automate expense reporting and approvals.” Notably, though, Amex says the AI is something it built in-house: It doesn’t take advantage of Microsoft’s partnership with OpenAI, but instead uses Microsoft Cloud. You can read more about that deal here.
Fascinating! I hope we only hear more about the incorporation of AI into the world of financial services.
more layoffs
Last week, Say announced that it would reduce its staff by 19% and shut down its crypto unit. He also missed analyst estimates for his revenue and earnings. All this news caused a sharp drop in his share price. It’s further proof that buy now, pay later as space is at a premium. I plan to get into that more next week so stay tuned.
Enthusiasm They also cut jobs lay off 126 people last week. Last May, TechCrunch reported that the HR tech unicorn, worth nearly $10 billion at the time, raised an extension to its 2021-era Series E funding round. That funding event included $175 million in Tier 1 capital, a tranche of secondary shares and a public offering.
Ironically, explains TC’s Natasha Mascarenhas, late last month, Gusto’s editor-in-chief wrote on the issue of layoffs — and the silver lining ahead for small businesses looking to recruit talent.
“Call me cynical, but in the end, a great company will always choose itself over dozens of employees. It’s just the nature of the beast. Small businesses need to use this fact to their advantage.”
TechCrunch reached out to Gusto for comment and was told that the cuts represented around 5% of the workforce. A spokesperson also told me: “All employees were notified by email. Affected employees also received a text message directing them to the email.” An employee, who wished to remain anonymous, said the move came as a surprise as the company claims it is in “stable financial condition.” The same employee cited a toxic work culture, a sentiment echoed by some users of Blind.
weekly news
According Axios: “Robin Hood announced that it plans to buy back shares of Emergent Fidelity Technologies from Sam Bankman-Fried. That particular Robinhood holding is currently in legal hell after the FTX implosion. Robinhood’s board has authorized the purchase of “most or all” of the 55 million shares that Emergent Fidelity Technologies acquired last year, he said in his earnings report Wednesday. Emergent Fidelity Technologies was formed to buy a 7.6% stake in Robinhood in early 2022. Now, however, the bet is being disputed by several players. Oh. I’m sure Robinhood didn’t anticipate this when it relinquished those shares.
cake insurancewhich provides workers’ compensation insurance to small businesses, Announced that you have completed your transition to a “qualified full-stack carrier”. Pie will begin issuing its own insurance policies later this year following the recent acquisition of a nationally licensed insurance company (formerly American Insurance Company), now renamed Pie Insurance Company. We last covered Pie in September, when it grossed a $315 million Series D. Pie also expanded into commercial auto insurance as MGA for Ford Motor Credit Company through the launch of Ford Pro Insure.
From Manish Singh: “Fintech That? and PayU’s LazyPay is among the apps that India’s IT Ministry has blocked in the ongoing crackdown as New Delhi moves to curb misuse of consumer data and protect the integrity of the nation.” More here.
from PayPal the stock has risen one more time. The company announced during its fourth-quarter earnings announcement that CEO Dan Schulman plans to retire at the end of the year. But his earnings topped analyst estimates. Last week we wrote about the company’s plans to lay off 2,000 employees.
In July 2022, the Brazilian fintech alt.bank launched novücard, a credit card in Brazil that has a “dynamic” credit limit, with the ability to see the limit adjusted up or down automatically based on usage and payment timeliness. A company spokesperson told me that since that launch, novücard has grown to 150,000 new customers, “making it the fastest growing credit card in Brazil.” He added: “Up to 3,000 new customers per day get a new novücard. The company expects this number to grow, driven primarily by word of mouth, with the number of customers increasing to 2 million by the end of 2023.” Founded by American Brad Liebmann, fintech alt.bank has 130 employees based primarily in São Paulo and São Carlos. The company raised $5.5 million in seed funding in May 2021.
Financing and M&A
Former Gemini CTO Launches Fierce, High-Performance Finance Super App
New social investment platform Follow touches on influencers to reflect your investment strategies
SUMA Wealth acquires Reel to close the wealth gap in the US. Christine covered last year: https://techcrunch.com/2022/10/21/suma-wealth-latinos-credit-gaming/
Southeast Asia’s Sequoia Capital backs cross-border payments startup Tazapay
Investment platform Moonfare caps Series C extension at $15 million
That’s all for this week. Once again, thanks for putting up with me and I hope to be back with you at full speed next week. Enjoy the rest of your weekend! xoxo, Mary Ann
