Welcome back to The Interchange, where we take a look at the hottest fintech news of the previous week. If you want to receive The Interchange directly in your inbox every Sunday, head here to sign up! Unfortunately we can’t make it to Money20/20 next week. But we have no doubt that we’re going to hear all about the exciting news coming out of the annual event. Until then, let’s recap what happened last week!
Plaid’s big move
Last week, Plaid announced it had named former Expedia exec Eric Hart to serve as its new chief financial officer. The move was not an entirely shocking one considering that Plaid is now 10 years old, was valued at over $13 billion in 2021 and continues to grow — both in terms of its offerings and revenue. The fact that it is eyeing an IPO — albeit with no timeline — is interesting.
The company did lay off about 20% of its staff late last year, which honestly is the type of move that can be considered favorable when a company is planning to go public. It can signal that costs are a concern and that increasing profit, or reducing a loss, is a priority.
Plaid got its start as a company that connects consumer bank accounts to financial applications. It has since been gradually expanding its offerings to offer more of a full-stack onboarding experience. The company was almost acquired by Visa for $5 billion before antitrust regulators shut that deal down. Plaid went on to raise funding at a $13.4 billion valuation after the deal fell through and has worked to diversify its revenue streams since.
Zach Perret took the stage at this year’s Disrupt to talk about all the goings-on of the past few years. When news of the new CFO came out this week, Perret didn’t talk about IPO plans and simply welcomed Hart to the team.
For those of us intensely watching the space, though, it feels like a positive move in an industry that lately has had its share of struggles. Public and private fintech companies alike have had challenges, and that’s been reflected in their stock prices and lower valuations.
So a company like Plaid taking such a big step has us, dare I say it, a bit hopeful. While fintech may have been a bit overhyped in 2020–2021, there are still very solid, formidable players in the space. And one thing is for certain — 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 Equity Podcast.
Weekly News
Reporter 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 Reliance Industries umbrella, started its lending and insurance businesses. And since it is under Ambani’s thumb, it’s likely to fare much in the same way as his other ventures and perhaps will even shake up the industry a bit. Read more.
Early in the week, Christine wrote about fintech company Solid filing a countersuit against its investor, private equity firm FTV Capital. Solid sells software to companies wanting to provide their own financial products. FTV had initially sued Solid and its co-founders, Arjun Thyagarajan and Raghav Lal, in an attempt to claw back a $61 million investment made as part of Solid’s Series B in 2022. In its suit, FTV is claiming that the co-founders “lied to FTV concerning the company’s revenues, customer churn, and business generally and further deceived FTV.” Meanwhile, in Thyagarajan’s and Lal’s countersuit, they defend themselves, claiming that FTV didn’t like the economic environment, and at the first sign of any risk, FTV tried to pull out of its investment. It’s pretty messy. Read more.
Financial services platform Square is thinking outside the box with some new artificial intelligence–powered features meant to drive retail sales. Actually there are 10 of them. Reporter Kyle Wiggers highlighted a few of them, which focus on restaurant operations. One is Menu Generator, which allows restaurants to create a “full menu” on Square in “just minutes.” Others include order management and employee management. Get the full list.
Christine also wrote about Catch’s return with some new owners, this time strictly in the health benefits space for gig workers and self-employed individuals. You may remember that Catch’s original co-founders Kristen Anderson and Andrew Ambrosino decided to close down the company, which was also offering retirement benefits, in March. At that time, Alexa Irish and Laura Speyer, who were building their own insurance benefits startup, decided instead to acquire Catch and relaunch it in time for open enrollment. Read more.
Manish also wrote about Google partnering with banks and other lenders in India to offer loans to individuals and merchants on the Google Pay app. The app is already processing about 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.
Reporter Devin Coldewey wrote about the Internal Revenue Service piloting a free tax filing service in 2024 called Direct File. The program is meant to offer another option to some of the for-pay tax filing companies out there in hopes that more people with simpler tax situations will file their taxes. As Devin reports, those for-pay players have thoughts. Read more.
Mary Ann wrote about how expense management startup Navan has inked an exclusive deal with Citi that executives say will open its addressable market significantly. Specifically, the fintech and the card giant announced a new, jointly branded travel and expense system designed for Citi Commercial Bank (CCB) cardholders. Citi will offer its commercial clients — defined as companies with annual revenue of $10 million or more — the ability to opt in to Navan’s offering, Navan Connect. Read more.
Other items we are reading:
US consumer watchdog proposes new financial data sharing rules in competition boost
Samsung invests in Skipify’s digital wallet expansion
Ex-Betterment exec launches startup matching advisors with clients
Arta Finance opens its doors to US investors
Trovata, JPMorgan partner to streamline treasury payments
Creating an equal seat at the investment table
Self Financial hired a new CEO to fuel nationwide growth (Read TC’s previous coverage of Self Financial here)
Funding and M&A
As seen on TechCrunch:
French VC firm Founders Future just acquired an equity crowdfunding platform, Sowefund
LeapFrog’s new fund to double down on financial and healthcare sectors in Africa and Asia
Nova Credit lands $45M to grow its cross-border and alternative data credit products
Peak XV invests $35 million in wealth and asset management startup Neo
Statement, a cash flow management platform for enterprises, raises $12M
iink puts its digital stamp on property insurance claim lending following $12M Series A
Flanks grabs additional capital to automate wealth services in Europe
Seen elsewhere
Inside the AI-related changes at venture capital firm Greycroft
Stax acquires APPS to boost payment processing services
Globacap raises $21m Series B to digitise private capital markets
Prove raises $40M at more than $1B valuation
CB Insights: Global fintech funding showed signs of stabilizing in Q3’23, falling by just 3% QoQ
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