Welcome to interchange! If you got this in your inbox, thank you for signing up and for your vote of confidence.If you are reading a post on our site, please register here Then you can receive it directly. Each week, I take a look at the top fintech news from the previous week. This will include everything from funding rounds to trends to analysis of specific sectors to buzz about a particular company or phenomenon. There’s a lot of fintech news out there and it’s my job to stay on top of it – and understand it – so you stay informed. — marianne
One of the biggest news stories of the past week was Plaid lays off 260 employees, accounting for about 20% of its total workforce. This may come as a surprise to many, but not everyone.
Rumors of about 200 layoffs at Plaid began as early as late May. At the time, when asked, the company denied it would lay off any workers.But as time went on and the macro environment became more challenging, a tartan pattern seemed inevitable — it was Worth $13.4 billion Last year – will join a long list of fintech giants laying off workers.
Notably, in outlining the layoff decision, CEO and co-founder Zach Perret said he “made the decision to hire and invest ahead of revenue growth, which the current economic slowdown means did not materialize as quickly as expected”
Lately, it has become a common narrative – CEOs are responsible for overhiring, and, to some extent, optimistic about revenue growth. Optimistic or short-sighted? There seems to be a thin line.
Still, I think one of the most surprising things about the recent layoffs in fintech is how many of them are happening at some of the highest value startups. Klarna was valued at $45 billion last year.This year, it saw a Valuations plummeted and downsizing More than once. Brex valued at $12.3 billion earlier this year. and then a lay off. Stripe was valued at $95 billion last year.then a mass layoffs. Chime was valued at $25 billion last year.then a mass layoffs. Now grid.
Are they all ahead of their time? Are they trying to do too much too quickly? (Brex Co-CEOs and Henrique Dubugras same admit On stage at Disrupt. ) Do they all think the pandemic-induced boom will continue indefinitely? Do they all think venture capital will flow freely forever?
Also, maybe some of these companies really just believe they need so many workers. I mean, who knew there would be such a severe recession?
Maybe it’s a combination of all of the above. Obviously, each company’s situation is different, and I don’t know their internal discussions (although I’d love to know!). But it’s clear that a reset could be in order.
As a tech journalist, hearing and writing about layoffs at so many high-profile companies has sobered me up. I can only imagine how sobering this is for other startups in the space. My humble opinion is that we should all learn from the mistakes of others. I’m not blaming the above companies specifically. I mean average.
Of course, I’m not the founder or CEO, and probably never will be. But here are some unsolicited (probably obvious) suggestions from people who have covered startups for years:
- Stay focused. It’s easy to get caught up in a competitive landscape and want to outdo your competitors. But really, before you start expanding into new niches one by one, make sure you’ve really nailed down the ones you’re already working on.
- Hire responsibly and discreetly. No, that doesn’t mean you should have employees doing the work of two or three employees. This means that each open position should be considered carefully. Do you really need it? Can this hire wait until we get further along? Does it make more sense to hire a contractor temporarily?
- Stay humble. Don’t boast. Kicking ass and taking names? good for you. Don’t slap your chest too loudly. Confidence is one thing. Arrogance is another matter.
- Limit/reduce trash talk. It’s easy, especially on social media, to get caught up in discussions about how or why you think your company is better than other companies in your field. It’s okay to talk about why you think your product is better than others in a general sense. But calling names and trying to make someone look bad?Most of the time it will have the opposite effect and just make the you It looks bad.
- This is true. Whether it’s on social media (Twitter, Mastodon, LinkedIn or Post — wherever you’re more likely to share), or when talking to the press. Authenticity is huge, and as far as myself and my fellow TC journalists are concerned, it’s greatly appreciated and valued – especially considering it’s not as common as we’d like it to be. Transparency goes hand in hand with this, especially on the inside. Don’t keep your employees in the dark or mislead them.
- Oh, don’t lie and cheat.
While I didn’t start this newsletter thinking I’d be making a list of what a CEO should and shouldn’t do, here we are. 🙂 Thanks for pampering me.
weekly news
“Fintech was hot in 2021, but looking back… maybe too hot? industry explosion Last year, global investment hit a record $132 billion, according to CB Insights, with many startups reaching lofty valuations, including stripe $95 billion, Klarna $45 billion and lattice $13 billion. While these companies have very real customer bases and products, it’s not hard to imagine at least some of these valuations being fueled by hype. ” Rebecca Szkutak reports how hard Fintech Valuations Decline This year.
Robin Hood Last week it launched a waitlist for its new product, Robinhood Retirement, which it describes as the “first and only” individual retirement account (IRA) with a 1% match on every eligible contribution. The move is a big bet by the fintech giant that traditional 9-to-5 workers are no longer the norm, as it targets gig workers and contractors, who have historically found saving for retirement without benefits beneficial. Challenging full-time work and employer-sponsored programs.It’s also likely a tactic designed to help retain users, considering the company reported a 12.8% quarter-on-quarter decline in monthly active users of 1.8 million in the third quarter to 12.2 million, “the lowest level since a public company went public. ,”according to yahoo news. more of mine here.
Tage Kene-Okafor reports: “chipper cashAn African cross-border payment company valued at US$2.2 billion last year has laid off some employeesThe news was revealed last week on LinkedIn by a number of affected and non-affected employees. TechCrunch has learned from sources that more than 50 employees across multiple departments were affected; the engineering team was hit the hardest, with about 60% of the layoffs coming from that department, according to people familiar with the matter. “
From Manish Singh: “Financial Services Corporation of India Alipay is considering repurchasing its shares, following the trembling year Its shares fell more than 60%. Paytm said it will discuss with the board on December 13 the proposal to buy back the company’s fully paid-up shares, the Noida-based company disclosed in a stock exchange filing.more here.
Focus on fintech Gilgamesh Ventures named Paulayu As its newest (and third) partner and COO, oversees the development of the platform. The move comes as the firm approaches the second anniversary of its first fund. Since its founding in 2020, Gilgamesh has raised over $10 million and invested in nearly 30 early-stage fintech companies in the Americas, including Xepelin, Klar, Pomelo, Glean, and Modern Life.
from best: “A mobile-only UK bank Crewe Launched its flagship current account, offering customers 2% interest on up to £85,000. According to Kroo’s analysis of Bank of England data, as of September 30, 2022, British households had 271 billion pounds of non-interest-bearing demand deposits sitting idle. Targeting millennials and Gen Z, Kroo said it will open every new customer who opens a checking account through its philanthropic partner, One Tree Planted. “
Adam Neumann’s Newest Startup, Residential Real Estate Upstart flowYes Cooperation with fintech startups link Create a digital wallet for Flow’s residents. The planned digital wallet will be embedded in a variety of financial products, and the specific functions will be announced later.In case you somehow missed it, Neumann — you may remember his days at a small ol’ proptech called WeWork — made headlines (and got a lot of pissed off) in August when he Raised $350 million With a $1 billion valuation, Flow was a unicorn before it even started operations.
Earlier this year, Mastercard launched the Start Path open banking program, which aims to provide open banking startups with “practical mentorship, co-innovation opportunities, and engagement with Mastercard’s global network of banks, merchants, partners, and digital players” to help expand their businesses. business. On Friday, Mastercard selected the following eight open banking startups to join the program: AIS Gateway (Poland); Cullensi (U.K); Fego.ai (India); fluidity (Chile); Kao Shi (U.S); grade (U.K); percentage (USA) and rez (Canada).more here.
According to reports Reuters:”d local (DLO.O)The Uruguayan fintech, facing allegations of potential fraud by short sellers, has applied for a UK regulatory license, its chief executive told investors in a recent conference call seen by Reuters, claiming it relied on Maltese regulators to circumvent strict supervision. “
Brazilian fintech startups Materato create instant payment and QR code technology for financial institutions, Moved headquarters to San Francisco. The company told me via email that the move “is part of a massive adoption pixel, An instant payment system implemented by the Central Bank of Brazil in 2020 and used by 70% of Brazilians. Specifically, Matera provides instant payment software for banks utilizing Pix, in addition to providing core banking services to more than 250 global banks, credit unions and digital banks — serving more than 55 million accounts. The U.S. market “will allow it to empower more financial institutions to expand their payment capabilities. “
from Forbes: “In a year of big losses in financial markets, these entrepreneurs, traders and investors deftly navigate choppy waters and make a big impact.”
Paula You of Gilgamesh Ventures
Financing and M&A
See on TechCrunch
Ocho wants to rethink (and reinvent) personal finance for business owners
Andreessen Horowitz leads $43M Series A in Setpoint, which aims to be a ‘stripe of credit’
TripActions secures $400 million line of credit from Goldman Sachs and SVB
SBM Bank India is building a BaaS platform, seeks funding at $200 million valuation
and elsewhere
Hotel Payment Software Platform Selfbook Announces Strategic Investment from Amex Ventures. TechCrunch Covers Previous Raise here.
SME-focused challenger bank Allica secures £100m Series C round led by TCV
Avant Secures $250 Million in Funding from Ares Management Corporation
Uplinq raises $5.6M for SMB bookkeeping and analytics platform
Staking infrastructure platform Pylon raises $8.5 million in seed round
Carputty wins millions from investors to take out auto financing pain points
Then, I will sign. I’ll just put out one more newsletter towards the end of the year and then take a break for the holidays. Until then, have a great week. xoxoxo, marianne
Got a news tip or inside information on a topic we cover? We’d love to hear from you. You can reach me at maryann@techcrunch.com. Or you can drop us a line at tips@techcrunch.com. If you wish to remain anonymous, Please click here to contact usThese include SecureDrop (Instructions here) and various encrypted messaging apps. )
