Gm Fintech Futurists — our agenda for today is below. You are the best.

INVESTING: FTX's Sam Bankman-Fried takes a 7.6% stake in Robinhood (link here)
PAYTECH: Paddle Raises $200 Million in Series D Financing (link here)
OPEN BANKING: Yapily to acquire finAPI in open banking consolidation move (link here)
LONG TAKE: Stripe will drink your embedded finance milkshake (link here)
PODCAST: NEAR Foundation CEO Marieke Flament on building USDC issuer Circle, business neobank Mettle, and growing the NEAR ecosystem (link here)

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Short Takes

DIGITAL INVESTING: FTX's Sam Bankman-Fried takes a 7.6% stake in Robinhood (link here)

Sam Bankman-Fried (SBF), founder and CEO of FTX, a crypto derivatives exchange, bought 56MM shares in Robinhood for a 7.6% stake in the company. The deal was made via Emergent Fidelity Technologies, a company solely owned by SBF, and was worth a total of $479MM. Robinhood's stock price jumped up 28% in after-hours trading, though is not material over the last several weeks in the face of steep capital market declines.

Robinhood Comms @RobinhoodComms

We’re doubling down on creating a multi-generational company where customers can build wealth for their generations.

Robinhood has been making steady investments into crypto assets, and we believe will continue to go deeper towards onchain DeFi — see for comparison Cash App. Three weeks ago Robinhood acquired Ziglu, a crypto bank located in the UK, which signals a view towards regulated crypto asset exchange. In Q4 2021, Robinhood's revenue from cryptocurrencies rose 304% to $48MM, making up 18% of the brokerage's transaction based volume.

Some might think that FTX is a Robinhood competitor, both being in the business of making money from trading. But! Remember that Robinhood makes money from market makers, and SBF certainly plays that game via Alameda. As it relates to FTX, possibly Robinhood is a top of funnel play for them, separating out advanced traders from the retail chaff. We would expect some sort of commercial outcome from this closer ownership relationship.

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PAYTECH: Paddle Raises $200 Million in Series D Financing (link here)

London-based payment infrastructure provider Paddle raised $200MM in Series D funding, led by KKR at a valuation of $1.4B. The latest round brings total funds raised to $293MM. Paddle's tech helps organisations by managing their compliance, invoicing, payment routing, tax collection, renewals, reporting, fraud protection and subscription management — i.e., the entire Finance function payments stack.

Paddle is used by 3,000+ SaaS companies across 200 markets globally, which is a reasonably chunky business, especially that global part. The other value proposition is APIs and webhooks that integrate with business intelligence tools. Everything is embedded finance now!

We are seeing more and more maturity in companies like these. Seeing KKR — and not SoftBank — cut a check in this space suggests that the company is cashflow generating and viable. For other similar coverage, check out our conversation on the CFO office automation and Modern Treasury payment operations.

OPEN BANKING: Yapily to acquire finAPI in open banking consolidation move (link here)

Yapily is buying finAPI to consolidate the open banking API market. The deal is subject to regulatory approval before it closes and the amount is undisclosed; however the company confirmed a multi-million euro transaction.

Yapily Locks in $13 Million in New Funding - Finovate

Yapily is a UK-based open banking API provider that provide a single API to interact with bank accounts. There is no front-end interface, instead requiring developers build entirely in code for maximum customization. Their API allows companies to access integrations with thousands of banks, without any screen scraping or private APIs — to see bank account balances, transactions, and initiate payments.

finAPI is a German based open banking provider covering Germany, Austria, Czech Republic, Hungary and Slovakia. Their API similarly allows companies to view account information and initiate payments, although it also offers age verification and identity features to comply with KYC regulation. The acquisition lets Yapily move into new markets — Czech Republic, Slovakia, and Hungary — and it would allow the firm to become a leader in the German market.

Data aggregation and API-based money movement is still a big opportunity without a clear winner. Reminder that Visa acquired Tinc for $2 billion, Mastercard bought Finicity, and TrueLayer raised at $1B from now ailing Tiger Global. This horisontal consolidation is still a reasonable strategy while the payments rails get their act together. Although we don’t think there is space for that many more mega deals.

Long Take: Stripe will drink your embedded finance milkshake (link here)

We look at Stripe, and its position in the embedded finance markets.

In particular, we think about the expansion into data aggregation, as well as moves within crypto payments and ESG services. Does Stripe have to own the entire fintech developer go-to-market, or is there room for smaller companies to compete? And how should we think about decisions like backing the failed checkout startup Fast, in the context of this strategy?

Read Long Take

Podcast Conversation: NEAR Foundation CEO Marieke Flament on building USDC issuer Circle, business neobank Mettle, and growing the NEAR ecosystem (link here)

In this conversation, we chat with Marieke Flament, CEO of Near Foundation.

Bwitter (@Bwitter_): "We are excited to join the NEAR ecosystem! Got a grant from NEAR Foundation🔥Thanks for your support! @NEARProtocol taking off 🚀🚀🚀" | nitter

More specifically, we touch on the journey from Fintech Web2 to Layer-1 protocols and Web3, the neobanking ecosystem and comparatives, the role of the NEAR protocol and its Foundation, the three foundational pillars of NEAR, and so so much more!

Listen on Apple Podcasts

Rest of the Best

Here are the rest of the updates hitting our radar.

FINTECH: SoftBank's losses signal the end of a VC era ← read me
NEOBANK: Warren Buffet-Backed Digital Bank Nubank Buys Bitcoin, Adds Trading in App
DIGITAL LENDING: Ness raises $15.5 million
DIGITAL LENDING: Altro has raised $18M to help you build credit just by paying for your Netflix subscription
CAPITAL MARKETS: Deutsche Börse Launches Bond Liquidity Data
INSURTECH: HSB launches an insurance maintenance platform
INSURTECH: Qoala raises $65 million
PAYTECH: Rippling raises $250 million in Series D funding

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Contributors: Laurence, Matt, Farhad, Mike, Lex

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