Blueprint: Visa's trademark for Bitcoin wallet; 4.5MM user P2P money circle fintech Money Fellows raises $31MM; Nubank loyalty token
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You are the best, today’s agenda below.
CRYPTO: Visa exploring launching Bitcoin, Ethereum and Ripple wallet
LENDING: Money Fellows, an Egyptian fintech digitizing money circles, raises $31M funding
CRYPTO: Brazil's Nubank to introduce native loyalty token
LONG TAKE: Can anyone fight Apple's monopoly power over Web3, the Metaverse, and Finance? (link here)
PODCAST: Lex Sokolin's 2022 investing and building thesis -- the evolutionary relationship between Tech, Finance, and Web3 (link here)
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Short Takes
CRYPTO: Visa to launch Bitcoin, Ethereum and Ripple (XRP) wallet (link here)
A couple of weeks after Mastercard and Paxos joined forces to offer crypto trading for banks, Visa is jumping in with two notable trademark applications. The trademarks provide a foundation for Visa to: (1) launch their own cryptocurrency wallet, (2) create cryptocurrency auditing software, i.e., think Mastercard and Ciphertrace, (3) create NFT collections, and (4) to create virtual environments, which hints at payments in the Metaverse.
Visa has been active in Web3 since 2014, most notably through the 60+ crypto partnerships that the payment processor has developed, ranging from exchanges to payment providers, and leveraging these connections to enable crypto payments on the Visa network. Also notable is the company’s patent application from 2020 to create their own digital currency, likely drawing inspiration from Libra and CBDC concepts for a digital dollar. More recently Visa launched their own crypto advisory services at the end of last year and this month worked with FTX to create FTX-branded debit cards in LatAm and Europe. They also bought a punk, some of us remember.
We expect Visa to continue advancing in crypto, particularly as institutional and CBDC efforts pick up, and we’re interested to see how they look to power the commerce behind NFTs. Given the company’s strategy is to be a network of networks, we see it as an additive rather than competitive service to emerging rails. Someone’s got to plug into all those banks!
👑 See related coverage 👑
Plaid's payments ecosystem & Affirm's decoupled debit card reveal embedded finance Trojan Horse
Podcast Conversation: Origins of Metamask's 20 million Web3 users, with co-founder Dan Finlay
DIGITAL LENDING: Money Fellows, an Egyptian fintech digitizing money circles, raises $31M funding (link here)
Money Fellows, and Egyptian fintech digitizing money circles, raised $31MM in its Series B round. The round brings total funds raised by Money Fellows to $37MM, led by Commerzventures, Middle East Venture Partners and Arzan Venture Capital.
Money circles, more commonly known as a Rotating Savings and Credit Association (ROSCAs), are a group of individuals acting as an informal financial institution, particularly in areas where access to traditional financial services is limited. Individuals pool funds together, which can then be used for borrowing by other members or simply as a means of saving. Depending where you are on the circle / ladder implies whether you are a saver or a borrower, and how much credit risk you are taking on by being at the end of a cash waterfall — think of this as a local community debt cap table.
Money Fellows works by helping to pool together participants, running the operations and providing a credit assessment process for those involved. Currently the platform has more than 4.5MM users, 7% of which are monthly active users, and has experienced 8x year-on-year growth. This mechanism is estimated to be a $700B opportunity globally, and is popular in over 90 emerging and developing markets. Automating the structure and attaching modern data sets for underwriting appears to be a compelling peer-to-peer finance idea.
CRYPTO: Brazil's Nubank to introduce native loyalty token (link here)
Challenger banks distribute crypto like any other financial product. See Brazilian Nubank’s announcement that it will launch an in-house loyalty token, known as Nucoin, in the first half of 2023. The token will be built on Polygon and will make up part of a new loyalty program offered by the bank. The first 2,000 customers have been shortlisted to get access.
In May, Nubank launched crypto trading services that amassed almost 2 million users in its first 4 months, similar to announcements from Betterment, Step, and various others. See N26 recently announcing they are launching crypto trading with other 100 tokens.
Fewer companies have attempted a token launch, and details of the token are yet to be released. However, it could take inspiration from fellow Brazilian Mercado Libre’s loyalty token, which allows users to earn tokens for purchases on specified items. These tokens can then be used to purchase other specified items on Mercado Libre. Comparable models were pioneered by Binance and FTX, with focus on discounts coming from increased usage.
Crypto and neobanks are a good fit, just as banks and money are a good fit, with the more experimental token strategy generating differentiation. But creating a token is a double edged sword. It may provide financial benefits for the consumer and the company, but also comes as an asset to be regulated by the government, and is subject to the volatility of capital markets. That said, we are excited to see experiments of this scale, and excited to see the progress in Brazil.
👑 See related coverage 👑
Long Take: The "fundamental" economic design driving crypto valuation to $2 trillion
Long Take: The State of Decentralized network M&A in 2021, with Polygon's $650MM of acquisitions
Long Take: Can anyone fight Apple's monopoly power over Web3, the Metaverse, and Finance? (link here)
This week we look at Apple’s update to their terms of service, enforcing the 30% revenue share on NFT transactions, and limiting those transactions to the Apple in-app payment rails.
For all intents and purposes, this is a strong statement of their market power and walled garden approach. We explore the implications, look at the fight Apple has won against both Epic (in a legal sense) and Facebook (in the advertising sense), and propose that regulated status may actually provide the way out, by turning digital assets into brokerage financial assets.
Podcast Conversation: Lex Sokolin's 2022 investing and building thesis -- the evolutionary relationship between Tech, Finance, and Web3 (link here)
In this conversation, we have a special episode where Lex Sokolin walks us through the mental models for how FinTech works, how financial services is evolving, how technology is spreading into and out of financial services, and also how we consumers, people are getting reprogrammed or used to different modes of engagement entirely.
Additionally, Lex touches on how the interactions between some of the largest tech, finance, regulatory, and government players is leading to some really weird stuff. He will integrate some of the recent long takes that we've done on the FinTech Blueprint in the written newsletter and try to weave them together into a cohesive story, a story that's bigger than any particular look at the issues. The goal is to highlight an investing and building thesis of 2022.
Rest of the Best
Here are the rest of the updates hitting radar.
PAYTECH: Bilt Rewards raises $150 million
WEALTHTECH: Goldman Sachs creates tech-focused "Platform Solutions" in restructuring
WEALTHTECH: UK's most exclusive wealth tech, Privat 3 Money, launches bespoke mobile trading platform to HNW clients
WEALTHTECH: VentureCrowd teams up with MakerX to build Vest, a world-first blockchain wealth-tech platform
INSURTECH: Vesttoo raises $80 million
INSURTECH: RapidSOS Raises $75 million
INSURTECH: Daimler Truck Financial Services partners with HDVI
VR: ByteDance sells 46,000 Pico 4 VR headsets online in China since launching sales last month
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