Bank lending is often the least expensive form of financing but it is not often a consideration at the point of sale. Advances in embedded lending now makes this possible.
The new Mighty Oak Visa debit card from Acorns has a solid foundation for success says a representative from long-time partner Helix by Q2. GM Ahon Sarkar said he’s not surprised by Acorns’ prosperity since the two companies first partnered seven years ago, which is an eternity in fintech.
This week, we look at:
Embedded finance as a growing theme with the $10B Affirm IPO and Stripe's launch of Treasury
The customer types that each of these firms is attempting to convert into their product, and what this tells us about economic growth
A framework for understanding the emerging value chain of digital finance, and the role of platforms and marketplaces
Consumers have enjoyed the fruits of the embedded finance revolution but not so small businesses. It is time to rectify that.
In this conversation, Will Beeson and I break down a few important pieces of recent news — the SPACs for SoFi and Bakkt, and Plaid/Visa falling apart.
SoFi is going public with a SPAC deal worth over $8 billion. A few things we touch on in detail: (1) this is still largely a lender, (2) there is a gem of an embedded finance play called Galileo that SoFi owns, and (3) the multiple is a little over 10x T12 revenues, which is not crazy expensive, but not cheap.
Speaking of Galileo and finance APIs, we transition to Plaid, and how it is is not going to be one of the networks in Visa’s network of networks. Who wins and who loses in the equation? And last, we cover the Bakkt SPAC of over $2 billion and our view on its future.
I have been reading Alibaba: The House that Jack Ma Built this week, something everyone interested in understanding the future of Google, Goldman, Uber, or Amazon should do. The narrative starts with China's small business explosion, and Ma's genius is to tap into global demand for the products of those businesses through an online marketplace and associated financial services. But I am getting ahead of myself. Let's pause to acknowledge a massive, systemic transaction that was announced this week: payments processing company Global Payments acquiring TSYS (Total Payments Systems) for $21.5 billion.
I look at two mental models explaining why and how financial APIs have led to the creation of billions in enterprise value. The driving news is that Square Cash is competing with Robinhood in free trading, powered by trading API company DriveWealth. Last week, we saw that Chime, Robinhood, and Monzo were powered by payments API company Galileo. Should these enablers be worth the billion-dollar valuations of their clients? Are APIs inevitable technology progress? Or are we just seeing venture financing spilling desperately into a rebundling play to find profitability?
Embedded lending technology now allows any brand to offer high margin lending products quickly and easily.
A report from Viola Fintech shows why companies must go beyond embedded to contextual finance if they want their share of a $588 billion pie.
In this conversation, we chat with Chris Dean, who is the Founder & CEO at Treasury Prime. Previously, Chris was the CTO & VP of Engineering at Standard Treasury, which was acquired by Silicon Valley Bank for an undisclosed amount.
More specifically, we discuss all things banking-as-a-service, FinTech APIs, embedded finance, and the general evolution of the FinTech banking industry over the last decade.