FinTech Collective

As a new U.S. administration takes the helm, tech luminaries - or adversaries - such as Elon Musk are poised to wield an even more pronounced influence on the policy landscape. The implications of this dynamic are profound: Musk’s visions extend far beyond electric cars and into realms that redefine national priorities, from space colonization and AI development to reimagining sustainable energy grids. With his unique cocktail of audacity, innovation, and market dominance, Musk is not just a CEO; he's a power broker capable of nudging the federal agenda toward futuristic ambitions that once belonged to science fiction. However, such influence invites a double-edged scrutiny. While Musk's disruptive prowess aligns well with aspirations for a high-tech, eco-friendly future, it raises questions about the concentration of power among the tech elite. The current and future administrations, already navigating a complex socioeconomic landscape, must balance Musk's increasingly outsized influence with broader democratic oversight. The intersection of public interest and private enterprise in policymaking could lead to pioneering advancements—or, unchecked, to regulatory blind spots that favor the visionaries over the vigilant. In this new era, where innovation fuels both policy and profits, Musk will surely bring a spark to the national conversation. But will he bring his sink too? Featured Companies: MoneyLion, ORDA, Ocrolus https://bit.ly/4flSmdU #fintech #fintechnews

On October 20, 2014, Apple Pay launched for US consumers and this week, it turned 10 years old. While digital payments came about far before that, contactless payments gained mass consumer adoption over the past decade, and Apple Pay showcases what a partnership between mobile phone providers and payments technology could look like. Today, Apple Pay is live in 76 countries globally, supports 11,000 banks and 20 payment networks, according to Forbes.   The continued evolution of digital payment technology is not only important for fintech companies, but perhaps even more so for large financial institutions.    But Apple Pay isn’t the only birthday this week. 40 years ago, Microsoft founder Bill Gates worked on an exciting project - Excel - which would be officially launched in 1985. Today, ~1.1b people across the world use the software, and it is considered a key job requirement for many office workers. What started as software for accountants has become a generalist application grounding key decisions for large enterprises and consumers alike. Happy birthday - what a long way we’ve come! Featured Companies: Octane®, Ocrolus, Ziina زينة https://bit.ly/4eagmze #fintech #fintechnews

The 2024 US presidential election is shaping up to be a historic one — not just for the candidates, but for how we predict the outcome. For the first time, prediction markets like Polymarket are competing head-to-head with traditional polls, offering real-time odds and massive financial stakes. One of the four accounts on Polymarket fueling speculation with large bets on a Trump victory recently took even bigger wagers, increasing the collective potential payout from $30m on Friday to nearly $43m by Monday morning, according to Polymarket’s activity tracker.   This election will be the first where both polls and prediction markets vie for supremacy in forecasting the outcome. Polls, long the go-to for political analysis, may soon face competition from these markets, which many argue can be more accurate since they aggregate the real-time "wisdom of the crowds." With such large sums on the line, bettors tend to weigh their decisions more carefully. Polymarket, for example, called J.D. Vance as Donald Trump’s vice presidential pick before any major news outlets, and it has been pricing Joe Biden's potential withdrawal from the race with greater certainty than traditional media.   But it will be interesting to see whether prediction markets can truly outpace polls when the stakes are this high. Will bettors with large financial resources manipulate public perceptions by shifting odds? Or will polls, bolstered by decades of methodology, still reign supreme?   In the meantime, we’re learning that some of the biggest wagers are coming from overseas accounts, like “Freddi9999,” a French ex-trader who’s placed $45m on a Trump victory. He’ll likely be watching the results unfold from across the Atlantic, picking up his baguette from the local store before settling in to see if his bet pays off. Featured Companies: MoneyLion, Performativ - Wealth Management Software , qlub https://bit.ly/3YmtFqp #fintech #fintechnews

Consumer lending startups are increasingly adopting creative strategies to offload risk and move loans off their balance sheets. Upstart, for example, recently struck a deal with Blue Owl Capital to sell up to $2b of its consumer loans over the next 18 months. Through this forward-flow agreement, where loans are pre-sold before origination, Upstart can continue expanding its lending operations without the financial burden of holding the loans themselves.   Klarna and SoFi are following similar paths. Klarna, the buy-now, pay-later giant, recently sold a significant portion of its UK loan portfolio to Elliott Advisors, freeing up £30b in capital to support its ongoing growth and gear up for a potential IPO next year. SoFi, on the other hand, reached a $2b deal with Fortress Investment Group to fund the origination of personal loans, allowing it to focus on less capital-intensive operations as part of its broader strategy to diversify revenue.   These deals highlight a broader trend among consumer fintech lenders: selling loans to private credit and hedge funds. For these investors, it’s an opportunity to capture a share of the consumer lending market traditionally dominated by banks. For lending startups, however, it’s a chance to better manage risk and free up equity capital to fund other priorities. Shares of Upstart and SoFi surged following their announcements, signaling market confidence in this off-balance-sheet approach. Sometimes it’s smarter to let someone else hold the bag. Featured Companies: Diesta, Contabilizei, Plaid, Flutterwave, Embroker, Sabi https://bit.ly/3NDdAYc #fintech #fintechnews

We are excited to announce FinTech Collective’s lead investment in Diesta’s $3.8m Seed raise. The London-based software solution for the insurance industry is focused on streamlining premium payment reconciliation for brokers and MGAs, bringing a long awaited revitalization to a massive, global industry that is stuck in the 90’s. The new capital will be used to scale Diesta’s product suite and geographic footprint. Congratulations to Julian Schoemig and Chris Davis and the entire Diesta team! Read more here: https://lnkd.in/eQYMhfcz #fintech #UK #payments #insurance

As new regulation has sprung up throughout the US surrounding the protection of children online, social media platforms may be able to take a page from the financial services industry’s playbook. For the first time a broader array of digital platforms are being asked to do what legislation has always mandated for financial institutions: protecting people from themselves.   Understandably, age thresholds are necessary to access everything from credit cards, to mortgages, to investment accounts. The silver lining? These restrictions also create the opportunity for a new subset of products and services to meet the unique needs of this generation.    In addition to the questions surrounding subjective parental controls as a better alternative to government-imposed restrictions for non-financial topics, constitutionality is also becoming a more relevant consideration. The key concerns: are the harms to children significant enough to justify these laws, and do these new laws place undue burdens on free speech and the right to access information? Or perhaps most importantly – will these laws even be successful, or will children just become more adept at posing as adults to gain access? Featured Companies: Plaid, MoneyLion, CapIntel, Termii Group, mattilda., Antler, Octane®, Extend https://bit.ly/4eHRzDy #fintech #fintechnews

Eurozone house prices have risen for the first time in over a year, according to the FT, likely fueled by lower mortgage rates. Beginning in early 2022, demand for European property saw steep declines as European Central Bank rates steadily hiked in the effort to combat inflation. As those same rates were cut once in June, once in September and likely another time in November, house prices increased 1.3% year-on-year this quarter.    European property prices are still far from recovered. In Germany, one of the most hard-hit markets and Europe’s largest economy, housing prices are still 12% below their peak in 2022 and are still down 2.6% year-on-year even as they increased quarter-on-quarter. Despite this, property owners are starting to be back in favor with credit investors as bonds of European residential property companies are now seeing significant price increases. In particular, so-called “hybrid bonds” - a form of junior debt without a maturity date - are seeing some of the strongest recoveries against an improving macro backdrop.   Real estate bonds are an important component of European high-yield funds, and asset managers have found European property bonds becoming a consensus long in the market, even as many property managers are still suffering from conditions in the past year. Recovery across different European countries and regions is likely to happen at different paces and to different extents - somewhat akin to the EU’s motto: united in diversity. Featured Companies: Vestwell, NEXU, OXIO https://bit.ly/3BuMhwt #fintech #fintechnews

Of the $2.6t settled in stablecoins this year, much of it supported practical use cases beyond trading. A recent study surveying 2,500 crypto users across several large emerging market countries showed stablecoin volumes grew steadily even during market downturns, suggesting broader utility for everyday financial needs. The appeal of a currency that can weather both storms and slumps seems to be mounting. Key findings show that 57% of respondents reported increased stablecoin usage over the past year, with 72% expecting this trend to continue. Beyond facilitating cryptocurrency trades, the most popular use cases include currency conversion, remittances, paying for goods, and salaries.    Recent developments in the fintech space further emphasize this shift. Companies like Robinhood and Revolut are exploring their own stablecoin offerings amid evolving regulations, while Circle, a major player in the stablecoin industry, launched the “Circle Compliance Engine” this week to support on-chain compliance needs. Talk about making moves—both literally and figuratively! Featured Companies: NYDIG, mattilda., Flutterwave, Vestwell https://bit.ly/4dqOlDe #fintech #fintechnews

Citadel and Millennium traders are catching the startup bug, leaving behind their high-stakes trading pods to launch their own hedge funds. This year alone, over 20 traders have reportedly left – or are expected to leave – Citadel and Millennium to raise their own funds, following the path paved by Bobby Jain, Diego Megia, and Todd Barker, who collectively raised $14b this year.    This surge of trader-turned-founders echoes the rise of Julian Robertson’s "tiger cubs," former Tiger Management traders who launched legendary firms like Lone Pine Capital and Viking Global Investors. Now, Citadel and Millennium are incubating the next generation of hedge fund founders, where their high-pressure "pod" structure is training traders to thrive when they set off to launch their own funds.   This trend isn’t unique to hedge funds. A similar trend is unfolding across successful fintech startups, where employees from major players like Mercado Libre, Square, Rappi, and Stripe are striking out on their own. Recent research published in Forbes shows that 37 Mercado Libre alumni, 32 from Square, 28 from Rappi, and 25 from Stripe have gone on to launch fintech companies.   Whether it's traders from top hedge funds or employees from fintech giants, the lesson is clear: elite firms are fertile breeding grounds for the next generation of entrepreneurs. The PayPal Mafia might need to scoot over—there’s a new mafia in town. Featured Companies: Axoni, Octane®, MoneyLion, Flutterwave https://bit.ly/3XE4saq #fintech #fintechnews

Since our first visit to the Kingdom of Saudi Arabia in 2016, FinTech Collective has been deeply committed to the region’s transformative journey. This week, we had the privilege of co-hosting an event in Riyadh with 24 Fintech titled “Shaping the Future of Financial Services in MENA,” we were honored to kick it off with a keynote from His Excellency Yazeed Al-Nafjan, CFA We were joined by a fantastic audience of senior representatives from the Saudi Central Bank – SAMA , the Capital Market Authority, key leaders from local financial services firms, investors, and entrepreneurs driving innovation in the space. Our outstanding portfolio companies qlub, Pemo, WheeKeep, and Ziina زينة all helped steer insightful discussions across three critical areas: 1) Building a Global Fintech Company from MENA: Exploring the opportunities and challenges of scaling fintech from the region to the world. 2) SAMA’s Role in the KSA Ecosystem: Understanding how Saudi Arabia’s regulatory environment shapes fintech's future. 3) Attracting Foreign Investors to MENA: We discussed how we created a first-of-its-kind framework, adapting standard U.S. and U.K. venture capital documents to align with KSA’s local legal requirements. It was a remarkable day of thought leadership, collaboration, and a shared vision for the future of financial services in KSA and the broader Gulf Cooperation Council (GCC) region. As our colleagues Jean Abillama, CFA, Faisal Kawar, and Zein Dayekh would say.. Yalla 🚀 🚀 🚀