Welcome to my new fintech-focused weekly column. I’ll be posting this every Sunday, so between posts, be sure to listen to the stock podcast and listen Alex Guilherme, Natasha Mascarenhas and i riff on all things startups! And if you want this to go straight to your inbox as soon as it turns into a newsletter (coming soon!), sign up. here.
It felt like there was a lot more fintech news in the past week than there usually is – and there are always tons – so I’ll just cover the highlights here. Prepare? Let’s dive.
More than one proptech company has struggled lately as the housing market has had its share of ups and downs. The COVID-19 pandemic has led to a drop in interest rates and an apartment craze, which in turn has led to more people looking to buy homes or refinance existing ones. Mortgage lenders couldn’t keep up with demand and proptech startups were raising capital left and right.
But a lot can happen in two years, and this is a new kind of real estate market. Take interest rates, for example. Currently, rates on a 30-year fixed-term loan hover around 4%. While not super tall, they are clearly above the record low of 2.9% set in January 2021. In addition, many major markets across the country are experiencing shortages. So even people who still would you like to buy a house are struggling to even find 1.
So what does this mean for proptech startups, you might ask? Unfortunately, lately, rounds of layoffs for one. I broke the news about the 9%, or 900 people, of Better.com, downsizing, in December. So on Feb 11, I also broke the (sad) news that a Utah-based startup called Homie (cute name) had to lay off about a third of its staff, or about 90 to 100 people. The company did not respond to my requests for comment, but in a LinkedIn post, it cited “changing market conditions” for the change. Like many other online realtors, Homie promised lower commissions and a more streamlined process. Also, like many other realtors, it has tried to become a one-stop shop for home buyers and sellers by branching out into loan, insurance and securities services.
But at least one realtor I spoke to believes the startup’s strategy of turning agents into employees is part of its problem. To be clear, it’s not the only company that does this. redfin was agents paying a salary for years. Notably, his stock took a beating over the 12 months as they also appear to have been impacted by market changes. Specifically, Redfin shares closed at $29.84 on Friday, slightly above a 52-week low of $25.25 but down 70% from its 52-week high of $98.44. . Grant Clayton, a Louisiana realtor, believes it’s this strategy of giving agents a salary that, at least in part, has played a role in Homie’s recent challenges. He told me:
“I believe that once agents become employees, they don’t work anymore. If agents aren’t moving the business, that means the company has to spend its money to provide it, which is a much less efficient way of doing business. ”
Oh, and speaking of Better.com, I heard some news about one of their former executives. On February 3, I communicated that Sarah Piercewho served as executive vice president of customer experience, sales and operations at the online mortgage lender, separated from the company after the layoffs disaster and reported disagreements with CEO Vishal Garg and the company’s board.
On February 10, Pierce announced on LinkedIn that he had joined the Sealed as its Chief Revenue Officer. The startup describes itself as “a home wellness company with a mission to make homes healthy, comfortable and cleaner for the planet.”
In a LinkedIn post, Pierce wrote: I spent the last six years in the real estate industry and was shocked to learn that 20% of all greenhouse gas emissions come from heating and cooling our homes.
Sealed’s financial and service model eliminates upfront costs, making it easier and more affordable for homeowners to adopt efficient technologies such as air-source heat pumps, reduce home energy emissions and, ultimately, reduce reliance on harmful fossil fuels. As an Iron Man fan, I’m particularly excited that Sealed is supported by Robert Downey Jr’s Footprint Coalition Venture and Fifth Wall.
Looks like a cool show (no pun intended)!
Alchemy and Its Awesome Value Increase
On February 8, I reported thatBlockchain infrastructure startup Alchemy had closed on a $200 million Series C extension which valued the company at $10.2 billion (a round that reportedly closed in December 2021 but not announced until now). Decacorn’s status was impressive, considering that in October alone, the startup was valued at $3.5 billion after a $250 million Series C round (a 3.5x increase) and by $505 million after a $80 million Series B investment (19.8x increase) closed just over 9 months earlier.
But it turns out that the valuation spikes were even higher than we imagined.
A reliable source, who preferred to remain anonymous, told me that when Alchemy – which has been described as the “Microsoft of cryptocurrency” – closed its Series A in December 2019, it was valued at just $72 million. This means that in March 2021, just before closing its Series B, the startup was still valued at $72 million. So an increase of at that for a valuation of $10.2 billion represents a jaw-dropping 142x magnificationor a jump of US$ 9.48 billion, in about nine months.
This is insane even in today’s crazy times.
One of the biggest and oldest players in the buy now pay later space has had a turbulent week after releasing his earnings report. Like our own Alex Wilhelm reported on February 11“Excluding yesterday’s declines of more than 20%, Affirm’s stock is down an additional 15% today as of this writing, at just $49.70 a share.”
I found this particularly interesting as I have been following the BNPL space for some time (a sample of my previous articles on the subject can be found here, here and here). Alex shared some thoughts on what Affirm’s stock crash could mean for startups in his article, so I won’t go into that too much. While I think BNPL is disruptive, it is here to stay and can be useful to many consumers and merchants – there is no denying that it is still a form of debt and those who lack self-discipline can easily end up spending beyond their means and on more. of their heads.
Furthermore, when Affirm first launched its S-1 in November 2020, it revealed that a significant portion of its revenue (28%!) Your most recent earnings report contained some positive numbers on the surface: active merchant count grew to 168,000, up 2,030% y/y from 7,900; active consumers grew 150% y/y to 11.2 million: GMV increased 115% y/y to $4.5 billion and total revenue was $361 million. But you have to ask yourself if/how much Affirm is feeling any negative impact from Peloton’s problems and what the future holds for the giant BNPL.
Meanwhile, in more positive news for space, our own Romain’s Dillete reported on French payments startup BNPL Alma raising another round of $130 million towards your effort “to building a new giant ‘buy now, pay later’ in Europe”, proving that industry startups are still raising large sums of capital.
The funding frenzy continues
We posted a lot of fintech rounds to feature Ploonge this week – from all over the world, yay! – and there were others that we couldn’t. I will link some of these funding news here:
Vivid Money, a super finance app, raised $114 million at an $886 million valuation to expand in Europe
Nigerian fintech Gray Finance received support from Y Combinator
Vietnam-focused investment app Infina raises its seed round to $6 million
Selina has raised $150 million to provide flexible loans that leverage real estate equity
CRV led a $25 million round for Northspyre Note: I wanted to cover this, but time is up…Northspyre as described in the CRVs Anna KhanIt’s a NYC vertical SaaS real estate game. She told me, “The CEO is really special and has done a lot of amazing things around diversity – almost 50% of his engineering team is female!” CEO William Sankey co-founded Northspyre in 2017 after spending six years as a New York real estate developer and project leader.
Egyptian investment app Thndr stole $20 million from Tiger Global, Prosus and others
Duplo, backed by YC, has raised a $1.3M pre-seed to build a financial operating system for B2B companies in Nigeria
Brick closed an $8.5 million seed to enable open funding in Southeast Asia
Financial Venture Studio (FVS) has named fintech startup founder Cameron Peake as its newest partner
Neo.Tax has raised $10 million to help make taxes more of an asset than a liability for startups. A way to do this? Helping them access R&D tax credits.
And finally but certainly not least, the very talented Tage Kene-Okafor reported how African startups raised a record $4.3 billion to $5 billion in 2021 with fintech startups benefiting from much of this capital.
In other fintech news…
As expected and previously reported by Ploonge, Apple announced a tap-to-pay feature that will allow iPhones to accept contactless payments. Sam Shawki, co-founder of the startup Magic cubehave thoughts about it, which he shared here.
Alex and the brilliant Anna Heim continued his insightful coverage of the insurtech space in this article: “Which insurtech startups are ready to thrive?”
American Express launched its first fully digital consumer checking accountreported CTs Aisha Malik.
Wealth Addition released to the public with its free, holistic financial planning services, according to the newest staff reporter at TC Anita Ramaswamy, which will cover fintech and cryptocurrency! Can you tell how happy I am that she’s here? There’s just TOO MUCH fintech news to cover.
Aaand, Aisha also wrote about how Meta messenger is flipping its “Split Payments” feature for all iOS and Android users in the United States.
Ufa. That was fun – thanks for reading and please share! Also, be on the lookout for a very extensive Fintech investor survey I conducted that will be published on TC+ this week. Good thing! Enjoy watching the Super Bowl if that’s your thing. See you next week!