Early-stage fintech startups just got more funding sources

Welcome back to The Interchange, where we take a look at the hottest fintech news of the past week. We wish you and your families a Happy New Year! If you want to get The Interchange straight to your inbox every Sunday, head here to sign up! And just a warning that while the newsletter will continue to progress, starting next week we will have a brand new name and a different look. Stay tuned!

New funds

We started the year with news of some new venture funds that will be writing checks to fintech startups. First of all, I pulled the news of the previous one Anthemis Group Partner Ruth Foxe Blader has started her own company, Fox Capital. Joining her in the new venture, which will also focus exclusively on fintech, are former Anthemis investment partner Kyle Perez and former director Sophie Winwood.

I had the pleasure of interviewing Ruth at TechCrunch Disrupt 2022 and was impressed with her knowledge and insight into venture capital. So it was no surprise that he wanted to grow and invest independently.

What was a little unusual about the move, however, is that he will continue to invest on behalf of Anthemis, at least for the first year, effectively developing the remaining capital of the vehicle he was hired to manage in 2017. He will be compensated by Anthemis as sub-consultant. It’s unclear whether the firm will back her as an LP when she starts making new investments. Although he didn’t say, I suspect he was bound by contractual obligations, so this deal worked around them.

London-based Anthemis has had its share of turmoil over the past year. Last April, TechCrunch broke the news that Anthemis had completed a restructuring that resulted in the departure of 16 employees, or about 28% of its staff.

A company spokesman said at the time that the move was an effort to “better reflect current market conditions and shape the business for future growth” against its “strategic priorities.” Sources familiar with internal events at the company told me at the time that there was plenty of drama going on behind the scenes, including allegations of mismanagement by company leaders and inflated salaries.

When asked if her departure had anything to do with what was happening internally at Anthemis, Blader told me, “My decision was based on my desire to try my hand at running my company, my level of personal ambition and the my love for close cooperation. with founders”.

I also wrote about Exponent Founders Capital closing on its second fund of $75 million. It was a fun story to write considering I had gotten to know Charley Ma, one of the company’s co-founders and managing partners, when he was working at Alloy and also while he was an angel investor. He and Mahdi Raza quietly founded Exponent in 2021 and invested in about 40 companies from their first fund of $50 million. Interestingly, the two first met “on opposite sides of the negotiating table” while Ma was at Plaid and Raza at Robinhood. Both have experience as operators and angel investors. And like Ruth, Charlie just seems like a good person.

It’s also always interesting when corporate alums start their own things. There has been talk of a PayPal mafia for years, but it appears that there are a number of other such mafias, albeit on a smaller scale, made up of alums of other later-stage fintech companies who also become investors. – Anna Maria

You can hear Alex and Mary Ann talk about it all on Friday’s episode of Equity.

Weekly News

Senior reporter Romain Dillet lays out some pros and cons HSBCNew international payments app Zing and how it compares to Wise and Revolut. Zing is currently limited to those in the UK. Among them, Romain writes about Zing’s different approach to forex commissions. His overall view? “Immigrants and frequent travelers will appreciate that there is a new contender in the space.” Read more.

We watch for the aftermath of the split between Synapseits banking partner Evolve Bank & Trust and the startup banking platform Hermes. In October, I reported on this after talking to Synapse, which operates a platform that allows banks and fintech companies to easily deploy financial services and Evolve. This arose from allegations involving who was to blame for a shortfall in customer funds. Most recently, Mercury is seeking, among other things, to recover about $30 million as part of a lawsuit against Synapse, as the first reported by Fintech Business Weekly in December. The lawsuit was filed in California Superior Court for San Francisco County on Dec. 13. In response, Synapse founder and CEO Sankaet Pathak called Mercury’s claims “baseless” long Medium suspension On December 28th. He also says that Mercury would rather “tarnish Synapse’s reputation than seek genuine legal recourse.” What’s next? I guess we’ll find out later this month. — Christine

Especially, Deel CEO and co-founder Alex Bouaziz posted on X last week that his company opened 1,000+ roles this year. Naturally, our first thought was, “Did Deel raise more capital?” I reached out to Alex to ask, and he said the company hadn’t raised more funding, but was profitable as of September 2022, adding, “Just a lot of new products and ambitious goals!” Meanwhile, VC Rex Salisbury posted on X in response, saying he was aware of “several late stagers doing 1k+ headcount expansion.” This is crazy. – Anna Maria

Meanwhile, Mary Ann looked back at The biggest fintech hits and misses of 2023. Remember when Apple launched its competitive interest rate savings account? A battle has begun, in a way, for fintechs to overtake the consumer tech giant. We also saw WeChat Pay and Alipay cashless. And who can forget when Carta CEO Henry Ward drew more attention to some bad news. There have also been a number of acquisitions. What do you think was the biggest fintech story of the year? Hit us up in the comments or email us!

And Mary Ann joined editors Brian Heater and Zack Whittaker to remember the startups we lost in 2023. Fintech companies included Braid, Daylight and ZestMoney.

Other items we read:

Prediction: 15 Companies We Think Might Really, Really, Finally Go Public in 2024. Venture capitalists are also predicting more exits in 2024, as colleague Rebecca Szkutak reported for TechCrunch+. Here’s what they have to say.

Walmart adds Affirm’s buy now, pay later option to self-checkout. Catch up on Christine’s conversation with Affirm’s Head of Product, Vishal Kapoor, where she discussed a new approach to the company’s ongoing buy now, pay later innovation.

Baaskit Launches in Chile with Financial Market Commission Approval, Introducing ‘Banking as a Service’ for Businesses Using API Technology

Neobanks vs legacy banks: Drawing the battle lines in 2024

Neobank Bunq introduces a customer-facing AI tool

Robinhood acquires Chartr as it expands media portfolio

FinTech IPO index jumps 55% in 2023 as platforms post triple-digit gains