The Fintech Week in Review: Brex Exodus, Buy Now Pay Later for Tech, and Mega-Raises
Welcome to TechCrunch Fintech! This week, we’re exploring a noteworthy jump from a Brex executive to a venture firm, a Klarna divestment that sends ripples through the payments landscape, and a flurry of impressive funding rounds.
The Big Story: Brex’s Brain Drain Continues?
Ali Rathod-Papier, the Global Head of Compliance at corporate card expense management startup Brex, has left the company to join Andreessen Horowitz (a16z) as a partner and compliance officer. This move comes at a critical time for a16z, which recently faced backlash after its investment in Synapse, a banking-as-a-service startup, went belly up in April, leaving an estimated $85 million in customer funds missing.
This isn’t the first high-profile departure from Brex to the venture capital world. Sam Blond, the former Chief Revenue Officer at Brex, also transitioned into venture capital, initially joining Founders Fund. But after a brief stint, Blond stepped down, citing that full-time investing wasn’t a good fit for him.
The series of high-profile exits from Brex, particularly to the venture capital space, raises questions about potential challenges within the company and the allure of venture capital, especially given the uncertainty surrounding a16z.
Analysis of the Week: Gynger Brings Buy Now Pay Later to Technology Purchases
Gynger, a platform that provides capital to companies for technology purchases, has secured $20 million in Series A funding led by PayPal Ventures. Gynger’s model is unique in its approach, working with both buyers and sellers of technology. The startup offers vendors a way to embed financing through an accounts receivable platform, providing businesses with flexible payment terms. Gynger’s success, facilitating thousands of payments for its customers across hundreds of vendors like AWS, Google Cloud, and Okta, highlights a growing need for flexible financing options in the tech space.
Dollars and Cents: A Flurry of Funding for Innovative Fintech Startups
The fintech landscape remains active, with several startups securing significant funding:
- Finbourne, a platform that helps financial companies organize and use their data in AI and other models, snagged $70 million, pushing its post-money valuation to over $356 million.
- Cadana, a provider of APIs and white-label products for global workforces to integrate payments and payroll management into existing systems, emerged from stealth mode with $7.4 million in funding.
- Hero, a Paris-based startup building a banking product for small businesses, secured $12.2 million in all-equity funding led by Valar Ventures.
- Materia, a company that integrates into existing accounting workflow software and applications to tackle data silos, emerged from stealth mode with $6.3 million in funding.
These funding rounds underscore the constant innovation and appetite for investment within the fintech sector, with a focus on solutions that streamline operations, improve financial accessibility, and leverage data effectively.
More Than Money: What Else is Making News
- Société Générale is selling Shine, a French fintech startup offering bank accounts to freelancers and small businesses, to Ageras. Société Générale acquired Shine in 2020 for €100 million, highlighting a changing landscape for challenger banks and the potential for consolidation.
High-Interest Headlines
- Klarna announces its exit from the checkout business, citing a conflict of interest with competitors like Adyen and Stripe. This news throws a wrench into Klarna’s growth strategy, indicating a shift in its focus.
- New documents reveal a sharp decline in X (formerly Twitter) revenue, potentially hindering Elon Musk’s ambitious plans for the platform.
- Revolut is seeking a valuation exceeding $40 billion in an employee share sale, indicating a continued push for growth even amidst economic uncertainty.
- Celcoin received a $120.5 million investment to fuel further mergers and acquisitions.
- Clip, a Mexican fintech unicorn, secures $100 million in investment, highlighting the growing fintech market in Latin America.
- Amplify Life Insurance raises $20 million in Series B funding, solidifying its position in the life insurance market.
- Zilch, a Klarna rival, raises $125 million, aiming to triple sales and accelerate its path to an IPO.
- Verituity, a company focused on payout verification, secured $18.8 million in funding, demonstrating the growing importance of fraud prevention in the digital era.
Fintech continues to evolve at a rapid pace, with new entrants, innovative solutions, and ongoing consolidation. Stay tuned for more developments in the coming weeks!
