Welcome to my weekly fintech-focused column. I’ll be publishing this every Sunday, so in between posts, be sure to listen to the Equity podcast and hear Alex WilhelmNatasha Mascarenhas and me riff on all things startups! And if you want to have this hit your inbox directly once it officially turns into a newsletter on May 1, sign up here.

The big events in the fintech world over the last week felt like a very different vibe from 2021, which was filled with mega rounds, celebrations and lofty valuations.

First off, 3-year-old one-click checkout startup Fast announced it was shutting down after struggling to raise more capital to keep operations running. The announcement wasn’t a complete shock considering there were hints of trouble, as reported by The Information, the week prior. Those hints included the revelation that the startup had generated just $600,000 in revenue for all of 2021 despite raising $120 million in venture capital earlier in the year (in a round led by Stripe) and rumors that the company was having trouble raising more funds, and as a result, might be seeking a buyer.

There were conflicting sentiments on social media (Twitter mostly) about the company’s demise. I’ll spare you the actual tweets but will say this: a company shutting down should not be cause for celebration. No matter how much irresponsibility on the part of leadership or others within the organization may have contributed to said demise, the majority of the company’s employees likely worked very hard to help it be successful and don’t deserve to be mocked or ridiculed, even if not directly. Now, hubris on the part of executives is another story. (Like maybe don’t refer to yourself as a trailblazer when announcing that your company is shutting down). The takeaway here? Humility goes a long way in life, and especially in the startup world. Don’t go bragging until you have something to brag about, and even then, let your results speak for themselves. On a positive (and somewhat unusual) note, BNPL giant Affirm said it would be giving job offers to “the vast majority” of Fast engineers, as reported by the brilliant Natasha Mascarenhas.

Speaking of, um, hubris – Better.com made headlines, again. The digital mortgage lender on April 6, offered corporate employees and product, design and engineering staff the option to separate from the company voluntarily in exchange for paid severance and health insurance coverage for 60 days. The move came amidst reports that the company was losing as much as $50 million a month, which were neither confirmed nor denied when I reached out. Then the next day, TechCrunch obtained a recording of a Zoom meeting in which CEO Vishal Garg addressed the employees that remained after Better.com had just laid off 900 employees, or 9% of its staff on December 1. In a word, the recording was brutal. The executive’s tone and body language conveyed no remorse around the layoffs and he even issued what felt like a veiled threat that going forward, any employees deemed to be non-productive too would be exited. During the recording, Garg also made many shocking – and incriminating – statements such as admitting the company had “pissed away” $200 million of the $250 million it made last year and that he had lacked discipline when it came to Better’s hiring strategy at the onset of the pandemic. One day later, on December 7, it was revealed that CTO Diane Yu was transitioning from her role as Chief Technology Officer – a position she had just assumed in January 2021 – into an advisory position.

As my friend (and other EquityPod co-host) Alex Wilhelm and I discussed on the show this week, Better.com at least had a viable business that was doing well at one point – well enough to attract the likes of SoftBank and for it to be planning to go public via a SPAC. (We saw the deck, mind you). And former employees admit that the underlying technology the business built is actually good. It feels like in this case, getting overly confident and not accounting for a less favorable mortgage market got in the way of what could have been an impressive growth trajectory. Either way, no matter what mistakes its leadership has made over the past couple of years, it’s likely safe to say that as in the case of Fast, many of Better.com employees are reeling from what has taken place and my heart goes out to them. Alex and I also agree that often, humble CEOs often see better outcomes than their less humble counterparts. Maybe it’s because people find it easier to be motivated by someone they respect and who respects them? We’re no experts, of course, but there does seem to be a correlation in several companies we’ve covered. Humility should not be seen as a weakness, in my humble opinion, but more of a strength.

With the funding market slowing down, we’ll likely see more layoffs and shutdowns, unfortunately. In case you missed it, I wrote a feature last week on how Better.com taught us how not to downsize. Here’s to empathetic leadership as some startups potentially face tough times. A little empathy, compassion and humility can go a long way.

Now on to funding rounds

While the pitches aren’t as fast and furious, they’re still coming. This might also be a good time to note that I am not covering as many funding rounds as I used to. For one, I now have this column (which is about to become a newsletter), that gives me space to talk about rounds I did cover as well as some I did not have the bandwidth to cover. And secondly, I am trying to a) keep myself more available for breaking news when it hits and b) do more deeper dives, trends and analysis pieces. So, just a heads up!

Back to funding rounds.

Last week, I wrote about Fidel API, a startup that actually started out doing one thing before becoming another. This is the case for many startups – companies realize that the technology they’ve built to solve an internal problem might have more potential than the technology they were originally setting out to build.

The London-based company, its CEO and co-founder Dev Subrata told me, started out as a customer engagement platform in 2013.

“We essentially needed our systems to speak to underlying payment systems and there was no easy way to do that,” he said. “We ended up spending way too much time and money that nearly bankrupted the company a few times over.”

Once Fidel realized that the programming interface it had built to solve that problem had promise, the execs had to make the “tough decision” as to whether they should keep it to themselves or put it out there for others to benefit from.

“We realized if we were to keep it to ourselves, it would only be serving one purpose, which would have been our product,” Subrata recalls. “But we couldn’t have a consumer product and also be the enabler for others so we chose to be the enabler and never looked back.”

Today, Fidel API provides identity, data and payments tools that it says gives developers a way to capture consent permissions and “securely” connect payment cards to a service or application. Fidel API is industry agnostic, with customers ranging in the “hundreds,” from startups to giants such as Google, Royal Bank of Canada and British Airways. Developers use the company’s tools to power a range of features, including digital receipts, omnichannel attribution, loyalty and rewards, expense management and personal finance management. 

Bain Capital just led its $65 million Series B. You can read more about it here.

Remote, which has built a platform to hire distributed employees, and then make sure they are remunerated easily and legally — in other words, tech that helps companies with some of the trickiest aspects of managing a remote workforce —announced it raised $300 million in funding at a $3 billion-plus valuation as it emerges as one of the bigger players to watch in the world of HR addressing global and distributed workforces, reported our own Ingrid Lunden. (More on this topic later)

Chicago-based Clockwork.ai, which describes itself as a “financial planning and analysis platform (FP&A) for growing businesses and their advisors,” closed on $2 million in seed funding from Underscore VC in Boston.

The startup claims that it “integrates with Quickbooks Online and Xero in less than five minutes” and saves teams 20 or more hours a month on managing, planning, and predicting their finances and cash flow. It says it uses machine learning to ingest up to three years of financial data and then learns from historical trends, seasonality and other traits to build detailed models and forecasts. 

The area is one that is clearly attracting investor interest. Last October, I wrote about Vareto, a startup aiming to help companies conduct more forward-looking financial planning and analysis, that came out of stealth with $24 million in total funding. While Vareto is mainly targeting larger, enterprise businesses, Clockwork.ai is after smaller, growing ones saying that its goal is to “alleviate the pain founding teams experience wrangling the complexity of finances and forecasts while running fast-growing businesses.”

In the case of Clockwork.ai, its founders are – in the company’s words – “a Black former banker and an Arab fractional CFO” who “lived the pain small businesses have managing their finances and cash flow every day.”

Spain’s Ritmo closed a $200 million debt funding round led by i80 Group and Avellinia Capital, in what it claimed was “one of the largest funding rounds of any e-commerce finance business in Europe and Latin America (LATAM).”

Founded in 2021 by Raimundo Burguera, Iñaki Mediavilla and Iván Peña, Ritmo says it provides working capital financing and an automated Buy Now, Pay Later (BNPL) payment system for e-commerce businesses “to overcome supply chain challenges, ensuring they can better manage cash flow and scale faster.” 

The company says that in the past seven months, it has achieved “a 12x growth rate” with more than 600 loans made in five countries across two continents. 

– Per FinSMEs, EnKash, a Mumbai, India-based “Spends Management Platform and Corporate Cards company,” raised $20 million in a Series B funding round. The company has close to 120 employees and says it processes annualized spends worth about $2 billion on its platform.

The credit-oriented fintech platform Liquidity Group, which funds later-stage technology companies, announced a new raise of $775 million from private equity house Apollo and MUFG Bank., writes TechCrunch’s Mike Butcher.

Founded in 2018, Liquidity employs machine learning and real-time data to automate the full credit investment lifecycle, committing more than $1 billion in capital. Investments to date include Etoro, Zetwerk and Homer.

Axios Pro and former TC reporter Ryan Lawler covered renovation financing startup RenoFi’s $14 million Series A funding round led by Canaan, with Nyca Partners and CMFG Ventures participating. He wrote: “The company aims to make the surging demand for home improvements affordable by providing financing to its customers.” This caught my eye because I had actually covered RenoFi’s $6.4 million financing in June of 2020. Canaan led that round, too. At that time, Justin Goldman, the company’s CEO and co-founder, emphasized that RenoFi was not a lender. Instead, he said, it partners with mortgage lenders such as credit unions, which offer “RenoFi Loans.” 

In other news

– On April 4, writes TC’s Tage Kene-Okafor, Clara Wanjiku Odero – a former employee of African payments giant and unicorn Flutterwave – accused the company’s chief executive officer Olugbenga ‘GB’ Agboola of bullying and harassing her for years. She made the allegations in a Medium post and series of tweets that came after. Get all the details in Tage’s comprehensive piece here.

On April 5, Block confirmed a data breach involving a former employee who downloaded reports from Cash App that contained some U.S. customer information. In a filing with the Securities and Exchange Commission (SEC) on April 4, Block — formerly known as Square — said that the reports were accessed by the insider on December 10. TC’s Carly Page breaks it down for us here.

– Unsurprisingly, fintech startups were well-represented in Y Combinator’s W22 batch, with 35 international companies participating and 25 more tagged as crypto-focused. One trend that caught our eye was that at least five startups – from several different regions – referred to themselves as the “Brex for” their particular geography. Alex and I took a fun look at the phenomenon in this piece.

– Forbes contributor and fellow fintech enthusiast Ron Shevlin on April 4 wrote about the fact that “in JPMorgan Chase’s recent earnings call, the $3.76 trillion (in assets) bank announced its plans to increase its annual technology budget to $12 billion, 26% more than it spent in 2020.”

Twenty-six percent would not be a big jump, IMHO. But I’m a little confused because in January 2021, when I interviewed Rohan Amin, Chief Information Officer (CIO) of Chase’s Consumer & Community Banking (CCB) unit, I was told that the bank’s tech budget was $12 billion. Looks like I may need to put a call into the bank to see what’s what. But either way, as we all know, the pandemic pushed banks and other financial institutions to up their digital game. And $12 billion is still A LOT of money.

Shevlin, in his snarky manner, drills down on what the bank thinks about all sorts of fun things like embedded finance, DeFi and blockchain, APIs and artificial intelligence. A fun and informative read.

-Cross-border HR service Deel announced last week that it had launched in Korea with the goal of helping companies in the country onboard workers, run payroll and comply with local labor regulations “to encourage global expansion.”

I’ve written about fast-growing Deel numerous times as the company is one of those startups that has seen rapid growth over the past year. Last October, I wrote about how Deel – nearly exactly six months after raising $156 million at a $1.25 billion valuation – announced it had raised $425 million in a Series D funding round that gave it a valuation of $5.5 billion.

During that same six-month period, Deel CEO and co-founder Alex Bouaziz  told me  the startup saw its global customer base jump from 1,800 to over 4,500, including companies such as Coinbase, Dropbox and Shopify, among others.

It’s in a similar space as Remote, mentioned in the funding round section above, proving that remote work is no passing trend.

Card issuance company Highnote and fintech GoDo partnered to create what they call a “GoDo Card,” and describe as a “fully functioning debit card” that offers underbanked workers earned wage access, meaning cardholders can access a portion of their wage as soon as they finish work, as opposed to waiting on a traditional pay cycle.

Some banks charge account holders who are unable to maintain a minimum balance. The partnership aims to boost inclusion by eliminating minimum balance and overdraft fees and helping cardholders avoid predatory lenders and thus, minimize debt.

– MissionOG, a Philly-based growth equity firm, announced last week that it closed on $167 million for MissionOG Fund III, its fourth investment fund, exceeding its target of $150 million. 

In pitching the news, the firm’s comms team told me that MissionOG is different from many in that it has an “exclusive focus on financial services and related data and software opportunities.”

Its team has “deep” operating experience – hence the “OG” in its name, which stands for “operating group.” Portfolio companies include Alkami (which went public in April 2021), Global Processing Services (“GPS”), Autobooks, Featurespace and Venminder.

With its latest fund, MissionOG is looking to invest $8 million to $12 million into “high-growth companies” that have successfully commercialized their solutions within a small portion of a large addressable market.

– Let’s end this edition on a positive note. In a generous gesture, Stripe waived the identity fees for Ukraine Take Shelter. According to the Business Post, the site is an online platform that is linking Ukrainian refugees to host families across Europe. Stripe’s move came reportedly after the website ran up a big bill using the payments company’s identification tool to verify people.

Thanks, as always, for reading. Hope you enjoy the rest of your weekend! See you next week.





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