Embedded finance can help small businesses manage their money end-to-end, but not all companies are equipped to offer it properly.
Assurance came on my radar courtesy of Financial Technology Partners, which was the investment banker on Assurance's $3.5 billion sale to Prudential. Notably, the company is just 3 years old -- which comes out to a cool billion of enterprise value per year, likely a record comparable to the very few Ant Financials. Depending on the details, this is about $25 million of value per employee. So what does the company do? Simple, really. It is a destination website licensed to sell all types of insurance product (e.g., life, health, auto), with a clean onboarding questionnaire like any other roboadvisor, which then matches against policies on offer from third parties. AI and data science are used as the recommendation engine. It is a Kayak or Money Supermarket of insurance, simply designed, cleverly wired, with killer founders.
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.
This week, we get philosophical and look at:
Embedded finance and how it will be woven into the fabric of the Internet
Applying the philosophies of existentialism, nihilism, and absurdism to Finance
Parsing symptoms in decentralized finance (Based Protocol) as artistic protest
Finding Dadaist beauty in chaos
Embedded lending technology now allows any brand to offer high margin lending products quickly and easily.
Advances in embedded lending provide better options for consumers and higher sales with more certainty for merchants. It's a win-win.
I dig deeply into the $5.3 billion acquisition of data aggregator Plaid by $500 billion payments network Visa. We examine why this deal is worth 25-50x revenue, while Yodlee's sale to Envestnet was priced much lower. We also look at how Plaid could be an existential threat to Visa, and why paying 1% of marketcap to protect 200 million accounts may be a good bet. Broader implications for product manufacturers across payments, investments, and banking also emerge -- the middle is getting carved out, and infrastructure providers like Visa or BlackRock are moving closer to the consumer.
Embedded finance and buy now, pay later (BNPL) are hotbeds of innovation, and Marqeta is in the middle of the action, CEO Simon Khalaf said.
As Banking-as-a-Service develops into Embedded Finance, who holds the responsibility of compliance gets decidedly murky.
The financial sector is set to see a shift in the light of proposed data rate rules. The impact on embedded finance may be unexpected.