The IPO Era is Over. Hello Private Sales.

It’s payday, baby! Your go-to source for all things Fintech is here with exciting updates. Let’s dive in.

🍿 Quick Snack

  • 🤑 Stripe aims to go public or allow employees to sell shares in the next 12 months.

  • 💳 Find out how Marqeta is revolutionizing the credit card industry with its latest acquisition.

  • 🖥️ Discover the impact of APIs on the fintech industry and how they are changing the future of financial services

  • 💸 7 new funding rounds, including $400m raised by MNT-Halan.

🍔 The Full Meal

Stripe Sets One-Year Timetable for Public Debut

  • The Wall Street Journal reported this week that Stripe executives have set a goal to either go public or allow employees to sell shares in a private-market transaction within the next 12 months.

  • The company has hired Goldman Sachs and JPMorgan Chase to advise on both options.

  • Background: Interest rates, inflation, and fears of a recession have led to a selloff in tech stocks, especially newly public companies, causing many startups to shelve their plans to go public. Other companies that postponed their IPOs last year include SnapdealEbanxDroomInstacart, and Klarna.

  • This has resulted in many private companies facing pressure to give employees a chance to sell their shares. For example, Brex implemented a $250m liquidity program last year, and SpaceX also offered its employees the opportunity to sell their shares at $77 apiece.

  • Some believe that a Stripe listing could help revive the dormant IPO market. If this happens, the company would likely pursue a direct listing rather than a traditional IPO.

  • Things are not looking good, though. Recently, Stripe cut its internal share price to $25, giving the company an implied valuation of $63 billion. Stripe’s last valuation was $95 billion in March 2021. Yikes.

  • Stripe has also recently raised $2 billion of cold hard cash to cover an annual tax bill related to employee stock units. That is some interesting use of cash 👀.

Marqeta Acquires Power Finance for $275 Million

  • Marqeta (NASDAQ GS: MQ) has acquired a 2-year-old fintech infrastructure startup: Power Finance.

  • This is Marqeta’s first acquisition. The purchase price consists of $223 million in cash, with one-third being payable over two years, subject to undisclosed conditions.

  • A bonus of $52 million in cash will also be awarded, subject to an unknown milestone expected to be achieved within the next 12 months. Let’s go! 💰💰💰

  • Power Finance’s main product is a credit card issuance program designed for companies, brands, and banks to offer embeddable fintech experiences into existing mobile and web applications.

  • Power Finance’s platform caters to companies that have never offered a credit card program. It provides an all-in-one experience with templates to help its clients launch easier and quicker. The company also helps customers navigate best practices for card design, packaging, unboxing, marketing, loyalty, rewards, and servicing the card.

  • Through this acquisition, Marqeta aims to expand and accelerate the capabilities offered in its credit products aided by Power Finance’s toolbox.

Harnessing the Power of APIs to Transform Fintech

  • You’ve probably heard the word “API” a thousand times. They have been responsible for the growth and expansion of fintech companies, enabling them to offer innovative and personalized services to consumers, improve efficiency, and reduce costs.

  • But what is an API? APIs (Application Programming Interfaces) allow different systems to communicate with each other and exchange data. In other words, messenger, but for computers.

  • Web APIs have been around since 2000 but have become widely adopted in the financial services sector over the past few years.

Main Benefits
  • Efficiency: APIs increase efficiency by reducing manual intervention and enabling the automation of various processes. As a result, APIs mitigate human errors, reduce costs, and allow faster data transmission (e.g., transactions), ultimately enabling young companies to compete against traditional financial institutions.

  • Innovation: APIs allow fintech firms to leverage vast amounts of financial data to create innovative financial products and services that provide heavily customized user experiences. The result? Startups have been able to compete effectively with traditional financial institutions with more appealing and cheaper products.

  • Competition: With the levels of accessibility APIs offer, barriers of entry have lowered, allowing for more products and services to be available for consumers. The rise of APIs has helped maintain costs low, which is a massive win for consumers but also has enabled traditional institutions to remain competitive against the ever-growing quantity of emerging fintechs.

Sample Use Cases
  • Payment Processing: accept, validate, and process payments — sample providers: StripeMangopay.

  • User Onboarding & Compliance: automate the onboarding and verification process, and prevent fraud — sample providers: AlloyShufti Pro.

  • Authentication & Authorization: establish a secure infrastructure instantly — sample providers: Cisco Duo AuthSecurID CloudPlaid.

💸 Funding Rounds

  • MNT-Halan | $400m: digital bank with a diversified portfolio of services, including digital payment solutions: mobile wallets, and cards. (link)

  • Zopa Bank | $92m: digital bank offering fair and honest financial products. (link)

  • Moov | $45m Series B: a platform for developers looking to embed payment functionality into their software. (link)

  • Hawk AI | $17m Series B: helps financial institutions detect financial crime more effectively and efficiently using AI to enhance rules and find anomalies. (link)

  • Vartana | $12m Series A: sales closing & financing platform (link)

  • Bridge Money | $5.8m Seed: mobile money app that helps you earn supplemental income (link)

  • Upwardli | $2m: build credit & savings with just spare change from everyday purchases. (link)

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