In this week’s edition of The Interchange, we touch on the resilience of BaaS in a sometimes messy fintech space, earnings highlights, and much more. If you want to receive this in your inbox every Sunday, sign up here.
It’s hard to believe it but TechCrunch Disrupt — only one of the most engaging, fun, well-attended startup events in the world — is around the corner, taking place September 19–21! Here’s a sneak peek at how it all comes about.
We are particularly excited this year because we have our very own Fintech Stage! This is a first. Outsiders may not realize just how much work goes into planning Disrupt. We start the process as early as January, brainstorming topics for panels and fireside chats and then working to find industry experts to hop onstage with us.
While we’re not completely done programming the stage, we have most of it figured out and are so excited, we just have to share it with you!
We’ll be hosting firesides with the likes of Plaid CEO and co-founder Zach Perret, Checkout.com president Céline Dufétel, Robinhood CEO and co-founder Vladimir Tenev and Andreessen Horowitz’s Arianna Simpson. Venture capitalists such as Index Ventures’ Mark Fiorentino, Flourish Ventures’ Emmalyn Shaw and Cowboy Ventures’ Jillian Williams will talk about how fintech investing is not for the faint of heart.
Discussing the topic of banking in a post-SVB world, we’ll have Mercury’s Immad Akhund onstage with JPMorgan Chase’s Melissa Smith and Piermont Bank’s Wendy Cai-Lee. And joining us on the subject of making money move with embedded finance are Synctera’s Peter Hazlehurst, Alloy’s Laura Spiekerman and Unit’s Amanda Swoverland.
Not to mention you’ll be able to catch all our awesome podcasts — including Equity, Chain Reaction and Found — live, and have the opportunity to connect with startups and investors from all over the world.
Last year was our first time attending Disrupt in person and the energy was on fire! There were over 10,000 attendees gathered at Moscone Center in San Francisco, and the networking opportunities are unparalleled. Come join us, and be sure to use the Code Word “Interchange” to get a 15% discount on your tickets.
Hope to see you there! — Mary Ann and Christine
In we-can’t-believe-this-is-actually-happening news, digital mortgage lender Better.com’s proposal to combine with Aurora Acquisition Corp. via a SPAC (special purpose acquisition) was approved by shareholders. According to a Securities and Exchange Commission (SEC) filing, Better.com will combine with Aurora, or go public, “on or about August 22, 2023.” Better.com had originally began making plans to go public via a $6 billion SPAC in May 2021. Things took a dramatic turn for the worse later that year, and the SPAC was delayed more than once. Mary Ann digs in further here.
Amid the layoffs, M&A and regulatory struggles within banking-as-a-service, I spoke to a number of experts to help make some sense of what’s going on in this sector and if BaaS is an outlier to the fintech mess. Check it out — you’ll need a TechCrunch+ subscription, but it’s worth it!
Aisha Malik reported that with the addition of Alaska, Instacart is now accepting EBT SNAP payments in all 50 states. The grocery delivery company started working on this nearly a year ago after it began accepting Electronic Benefits Transfer (EBT) for the Supplemental Nutrition Assistance Program in 2020. Read more.
Earlier this summer, Mary Ann sat down with Marie-Elise Droga, SVP and head of global and NA fintech partnerships at Visa. In that interview, which TechCrunch published last week, Droga described the payment giant’s fintech partnership practice as “the growth engine of the organization.” More details on that and what else they discussed here.
Insurance technology startups have a new place to pitch: American Family Ventures announced its AFV Fund IV with $444 million in capital commitments to invest in early-stage startups innovating insurance as well as risk management in the areas of proptech, artificial intelligence and enterprise software. Dan Reed, managing director, said in a statement: “Insurtech is going through its latest inflection point, and at American Family Ventures, we believe this is a time to be bold. Opportunities and returns will be unevenly distributed in favor of those who move. To us, Fund IV is a tool for moving LPs and startups forward into the next phase of the industry’s transformation.” Read more.
ICYMI: As reported by PaymentsDive, Stripe announced on August 3 that Steffan Tomlinson will take over as the company’s CFO in September. Specifically, the publication reported: “Tomlinson, who currently serves as CFO of software provider Confluent, is headed to Stripe with two decades of corporate finance experience at startups and Fortune 25 companies across the technology landscape. . . . Besides Confluent, he has also worked for tech titan Google. . . . Tomlinson will succeed former Stripe CFO Dhivya Suryadevara, who announced earlier this year that she was stepping down ‘to attend to family matters.’”
Adding your child to your credit card account is a practice of trust and patience. I have one on my account, so I know of what I write. Greenlight Financial Technology has always been about parents and children working together to help learn about our financial system, and the company’s newest offering is some of the same. Its Greenlight Family Cash Mastercard is a departure from the typical debit card most companies offer to teens. This isn’t a card that you give to your kids and set them loose; it’s a credit card that parents get and add their children to the account so that everyone can build their credit together. And get 3% cash back on all purchases. Get the scoop. — Christine
A number of fintech companies released earnings in recent weeks. Here are some highlights:
- PayPal, which rolled out a stablecoin this week, beat analysts’ estimates as revenue grew to $7.29 billion in the second quarter, up from $6.81 billion during the same period in 2022. The company also turned its net loss from last year into a profit. However, analysts didn’t like what happened to PayPal’s lower operating margins, and that news sent shares of PayPal into an 80% decline from the stock’s all-time high, according to The Motley Fool.
- Marqeta reported a 24% year-over-year increase to $231 million in net revenue for the second quarter, though its net loss widened to $58.7 million, up from $44.6 million. In addition, the card-issuing platform extended its partnership with Block’s Cash App through 2027. Read about Marqueta’s Power Finance acquisition from earlier this year.
- Former Snap Inc. chief strategy officer Imran Khan has acquired a 2.5% stake in Dave Inc. The neobank also announced its GAAP revenue in the second quarter was up 34% to $61.2 million and that non-GAAP variable profit climbed to $32.9 million, which, according to Dave, represented “a 53% margin relative to our non-GAAP revenue compared to 39% margin a year ago.” Meanwhile, the company said its delinquency rates remained low — at 2.83%. Read TechCrunch’s Q&A with founder Jason Wilk from earlier this year here.
- Flywire said it had a good quarter, signing on over 165 new clients during the three-month period and overall exceeding analysts’ expectations. Meanwhile, revenue was up 50.3% to $84.9 million while gross profit jumped to $48.8 million, resulting in a gross margin of 57.5%. The company also partnered with Tencent Financial Technology, Tencent’s fintech arm, to extend Weixin Pay (also known as WeChat Pay) as a payment option for Chinese students and families making tuition payments abroad.
Other news on our radar:
WeWork goes from $47B valuation to ‘substantial doubts’ about its future (Not fintech, but hey, still interesting!)
Fundings and M&A
As seen on TechCrunch
Chargeflow, which taps AI to fight chargebacks, raises $14M
Identity management platform Veza secures $15M from Capital One and ServiceNow
Join us at TechCrunch Disrupt 2023 in San Francisco this September as we explore the impact of fintech on our world today. New this year, we will have a whole day dedicated to all things fintech, featuring some of today’s leading fintech figures. Save up to $400 when you buy your pass now through September 18, and save 15% on top of that with promo code INTERCHANGE. Learn more.