Welcome back to The exchange, where we take a look at the hottest fintech news from the previous week. If you’d like to receive The Interchange straight to your inbox every Sunday, head over here register! Unfortunately we will not be able to attend Money20/20 next week. But we have no doubt we’ll be hearing all the exciting news that comes out of the annual event. Until then, let’s recap what happened last week!
Plaid’s big move
Last week, Plaid announced that it had named former Expedia executive Eric Hart as its new chief financial officer. The move wasn’t entirely shocking considering Plaid is now 10 years old, was valued at more than $13 billion in 2021, and continues to grow, both in terms of offerings and revenue. The fact that it is considering an IPO (albeit without a timeline) is interesting.
The company laid off about 20% of its staff at the end of last year, which, honestly, is the kind of move that can be considered favorable when a company plans to go public. It may indicate that costs are a concern and that increasing profits or reducing losses is a priority.
Plaid started as a company that connects consumer bank accounts with financial apps. Since then, it has gradually expanded its offering to offer a more comprehensive onboarding experience. Visa nearly acquired the company for $5 billion before antitrust regulators closed the deal. Plaid raised financing at a valuation of $13.4 billion after the deal fell through and has worked to diversify its revenue streams since then.
Zach Perret took the stage at this year’s Disrupt to talk about all the events of the past few years. When news of the new CFO broke this week, Perret did not discuss the IPO plans and simply welcomed Hart to the team.
However, for those of us watching the space intensely, it feels like a positive move in an industry that has had its problems lately. Both public and private fintech companies have faced challenges, and that has been reflected in their lower stock prices and valuations.
So for a company like Plaid to take such a big step has us, dare I say, a little hopeful. While fintech may have been a little overhyped in 2020-2021, there are still very solid and formidable players in this space. And one thing’s for sure: we can’t wait to get our hands on that S-1!
Listen to TC+ editor Alex Wilhelm and I talk more about this on Friday’s edition of the Equity Podcast.
Image credits: Eric Hart / Paintings
Weekly news
Journalist Manish Singh provided an update on the launch of jio financial services, a company that is part of billionaire Mukesh Ambani’s empire. Jio Financial, which is under the umbrella of Reliance Industries, started its lending and insurance businesses. And since it’s under Ambani’s control, it’s likely to fare the same as his other companies and maybe even shake up the industry a bit. Read more.
Earlier in the week, Christine wrote about the fintech company. Solid filing a countersuit against its investor, the private equity firm FTV Capital. Solid sells software to companies that want to offer their own financial products. Initially, FTV had sued Solid and its co-founders, Arjun Thyagarajan and Raghav Lal, in an attempt to recover a $61 million investment made as part of Solid’s Series B in 2022. In its lawsuit, FTV claims that the co-founders “lied to FTV regarding the company’s revenue, customer churn and overall business and further misled FTV.” Meanwhile, in Thyagarajan and Lal’s countersuit, they defend themselves by claiming that FTV did not like the economic environment and, at the first sign of risk, FTV tried to withdraw from its investment. It is quite complicated. Read more.
Financial services platform Square is thinking outside the box with some new ai-powered features aimed at boosting retail sales. There are actually 10. Journalist Kyle Wiggers highlighted a few of them, which focus on restaurant operations. One is Menu Generator, which allows restaurants to create a “full menu” in Square in “just minutes.” Others include order management and employee management. Get the full list.
Christine also wrote about Catchis back under some new owners, this time strictly in the self-employed and self-employed health benefits space. You may remember that Catch’s original co-founders, Kristen Anderson and Andrew Ambrosino, decided to close the company, which also offered retirement benefits, in March. At that time, Alexa Irish and Laura Speyer, who were building their own insurance benefits startup, decided to acquire Catch and relaunch it in time for open enrollment. Read more.
Manish also wrote about Google partner with banks and other lenders in India to offer loans to individuals and merchants on the Google Pay app. The app already processes around 4 billion transactions monthly, and Manish notes that this effort is Google’s strongest push for financial inclusion in the South Asian market. Read more.
Journalist Devin Coldewey wrote about the Internal Revenue Service piloting a free tax filing service in 2024 called Direct File. The program is intended to offer another option to some of the paid tax filing companies out there in hopes that more people with simpler tax situations will file their taxes. As Devin reports, those paying players have thoughts. Read more.
Mary Ann wrote about how to start expense management Navan has signed an exclusive deal with Citi that executives say will significantly open up its target market. Specifically, the fintech and card giant announced a new co-branded travel and spending system designed for Citi Commercial Bank (CCB) cardholders. Citi will offer its commercial clients, defined as companies with annual revenues of $10 million or more, the ability to opt into Navan’s offering. Navan Connection. Read more.
Other articles we are reading:
US consumer watchdog proposes new rules for sharing financial data to boost competition
Samsung invests in Skipify digital wallet expansion
Former Betterment executive launches startup-customer matchmaking advisors
Arta Finance opens its doors to American investors
Trovata and JPMorgan partner to streamline Treasury payments
Create an equal place at the investment table
Self Financial Hired New CEO to Drive National Growth (Read TC’s previous coverage of Self Financial here)
Financing and mergers and acquisitions
As seen on TechCrunch:
French venture capital firm Founders Future has just acquired an equity crowdfunding platform, Sowefund
LeapFrog’s new fund will double its commitment to the financial and healthcare sectors of Africa and Asia
Nova Credit secures $45 million to grow its alternative and cross-border data credit products
Peak XV invests $35 million in asset and wealth management startup Neo
Statement, a cash flow management platform for businesses, raises $12 million
iink Puts Digital Stamp on Property Insurance Claim Loans After $12M Series A
Flanks raises additional capital to automate wealth services in Europe
Seen elsewhere
ai-related-changes-at-venture-capital-firm-greycroft” target=”_blank” rel=”noopener”>Inside the ai-related changes at venture capital firm Greycroft
Stax acquires APPS to boost payment processing services
Globacap raises $21 million Series B to digitize private capital markets
Prove raises $40 million at over $1 billion valuation
CB Insights: Global fintech funding showed signs of stabilization in Q3 ’23, falling just 3% QoQ
Image credits: Bryce Durbin
