Blueprint: Robinhood's Web3 wallet on Polygon; EQT buys Billtrust for $1.7B after brief SPAC float; Satispay raises €320MM @€1B for IBAN payments
Robinhood, the free trading platform, is releasing a beta version of their Web3 wallet in competition with MetaMask and Coinbase.
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You are the best, today’s agenda below.
WEB3: Will Robinhood’s web3 app lead to market consolidation? (link here)
PAYTECH: EQT acquires Billtrust, a company automating the invoice-to-cash process, for $1.7B (link here)
PAYTECH: Italy's Satispay valued at over 1 bln euro after raising 320 mln euros (link here)
LONG TAKE: Getting out of this macro hellscape (link here)
PODCAST: Eliminating payments fraud from Fintech and Web3 using AI, with Sardine CEO Soups Ranjan (link here)
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Short Takes
WEB3: Will Robinhood’s web3 app lead to market consolidation? (link here)
Robinhood, the free trading platform, is releasing a beta version of their Web3 wallet in competition with MetaMask and Coinbase. Named Robinhood Wallet, the Polygon-focused app will be available to 10,000 users who registered interest prior to wider launch. Good news for $MATIC, and maybe the SEC.
Robinhood already supports trading cryptocurrencies on its brokerage app, generating $58MM in revenue last quarter, out of $318MM. Actual crypto wallets allow users to engage with Web3 directly, including the various DeFi protocols and their yield farms and NFT venues and their trading, increasing the LTV of customers and the value propositions of the onramps. The wallet integrates with decentralised exchange aggregator 0x, helping users find and compare the best rates of exchange between a range of tokens. Given the usage of Polygon, fees are low, which is the familiar experience for new users.
Robinhood has listed USDC as the default stablecoin for onboarding and cash sweep. This feature builds on Robinhood’s first crypto wallet that is currently being used by 2 million users, which was particularly limited in functionality. The original wallet could not accept ERC-20 tokens, NFTs, or any outside asset not “listed” by Robinhood, and would not support airdrops (i.e., dividend distributions).
All in, we like Robinhood onboarding users into actual Web3, and not restricting them to solely speculating on token prices. This opens up a new funnel for users to engage with DeFi and other Web3 platforms, and could be a particularly opportune timing given the current state of global economies, as illustrated by Bitcoin-Sterling volumes being at a record high following the collapse of the pound.
👑See related coverage👑
Should Robinhood, Voyager, and BlockFi sell to FTX -- a view on the industrial logic
What do SPACs and IPOs say about Coinbase, Robinhood, Lemonade, SoFi, and other fintech darlings?
PAYTECH: EQT acquires Billtrust, a company automating the invoice-to-cash process, for $1.7B (link here)
Billtrust, an invoice-to-cash process automator, has been acquired by Swedish private equity firm EQT for $1.7B in an all-cash deal. Billtrust is a public company after a SPAC merger in 2020, and shareholders will receive $9.50 per share — a 64% premium on September 27th closing price of $5.77. While the premium is significant, it is worth noting that in February 2021 the shares reached $19/share, and that SPACs launch at $10/share.
The invoice-to-cash market is estimated to be around $3B in 2024 — not too big, but big enough for an oligopoly player — growing at about 12% since 2019. The main challenge lies in firms believing their processes are *good enough*, with Billtrust reporting that 86% of accounts receivable teams considering themselves very or somewhat modernised. The sector is also teeming with competitors, such as Upflow, YayPay, HighRadius, Tipalti, and others.
Business has been good for Billtrust, with quarterly revenues of $40MM, annualizing to $160MM — a 10x multiple in the acquisition, give or take. Growth is steady at 29% YoY, and payment volume increased by 40% YoY. The acquirer, EQT, has been quite active of late with their $100B AUM, buying Idealista for €1.3B earlier this year and looking at Cypress Creek Renewables for $2B.
More broadly, for the right pool of assets, it could be very profitable right now to go shopping through fintech and crypto SPAC targets, who continue to be on historic discount.
👑See related coverage👑
PAYTECH: Italy's Satispay valued at over 1 bln euro after raising 320 mln euros (link here)
Italy’s Satispay, an independent payment network with low fees, has raised €320MM in Series D funding at a valuation of around €1B. The platform hosts more than 3MM consumers and 200K merchants — SMBs and large retailers alike. The round included investors Tencent, Block, Greyhound Capital, Coatue, Lightrock and was led by Lee Fixel’s Addition. Previously, Satispay raised €130MM over their last 3 rounds; the €320MM is significant and marks one of the highest rounds for an Italian tech startup.
Satispay provides payment rails that bypass banks and credit companies, lowering transaction fees and offering PFM features like budgeting. The company does this by transferring a user’s money into a Satispay account, which acts as a pre-paid account that they spend over time, running on top of the IBAN rails. BNPL is also being tested.
Italy is a bit behind the curve on digital payments, with 30% of people still preferring cash payments. Of course the trend is for users to adopt digital networks for financial transactions as mobile payments become the norm, and are preferred by businesses. The platform has also had success working with city governments to provide food stamps and remote payments during the pandemic.
Long Take: Getting out of this macro hellscape (link here)
Look on my Macro, ye Mighty, and despair! This week we blaze through the recent macro environment to construct, and in part make light of, the current negative narrative about the world.
We highlight how inflation, interest rates, and global currency fluctuations are linked, and how their recursive loop is part of a bigger whole. Our goal is to show how important it is to have a positive story, and how one might start telling such a story starting with ourselves.
Podcast conversation: Eliminating payments fraud from Fintech and Web3 using AI, with Sardine CEO Soups Ranjan (link here)
In this conversation, we chat with Soups Ranjan, the co-founder and CEO of Sardine.AI, a VC funded company with the mission to “confidently load money into a digital wallet”, where Sardine takes care of fraud and compliance issues related to money movement and instantly funds the money in the wallet.
Prior to founding Sardine, Soups was head of crypto for Revolut and head of data & risk for Coinbase. One of his lifelong passions is matching wits against fraudsters and he founded a popular risk community called RiskSalon that allowed many companies to learn from each other.
Rest of the Best
Here are the rest of the updates hitting radar.
BANKING: Nubank logs more than 1.8 million crypto users in Brazil
LENDING: Inclined raised $15 million
AGGREGATOR: Canadian aggregator HelloSafe raises $4.2 million
PAYTECH: Banking giant Nomura invests in payments firm Fnality
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