Connect with us


Inside Rent Butter: Why credit scores shouldn’t tell the whole story



Welcome back to The Interchange, where we take a look at the hottest fintech news of the previous week. As we head into a long holiday weekend here in the U.S., we look at — among other things — a surprising tie-up between Amazon and Shopify, Klarna’s Q2 results, and a startup out to make the rental application process more equitable and not so reliant on a credit score. On another note, if you want to receive The Interchange directly in your inbox every Sunday, head here to sign up!

Credit score, schmedit score

We here at TechCrunch have long been vocal about our distaste for the credit score system in the U.S. We feel like it doesn’t give a big or accurate enough picture of a person’s financial health. That’s why a startup called Rent Butter caught our attention. The company, which recently raised $3 million in a funding round led by RET Ventures, wants to give landlords insight into applicants’ behavior — and not just their three-figure credit score. The thinking is that a person with a 700 score might necessarily be a less risky applicant than someone with a 625 score. For example, the 700-score person might have recently increased their spending and have only been at their current job for six months (they usually only have to show two recent paycheck stubs, so a landlord might not necessarily know that). Whereas the 625-score person may have just run into hard times in the past due to, say, a medical illness but is back on track with no debt and having worked at the same job for three years. RET liked the company because its LPs are mostly large institutional owner/operators of multifamily and single-family real estate, most of which are target customers of Rent Butter’s.

You can read more about the company here, and listen to Alex Wilhelm and I riff on the topic on the Equity Podcast (below). — Mary Ann

Klarna’s good Q2

This week I covered Klarna’s second-quarter earnings. If you follow CEO Sebastian Siemiatkowski on X, then you probably already know how excited he was to share the results. I’m going to let you read all about it in the story, but I did want to share some of the conversation Siemiatkowski and I had that didn’t make it into the story.

For example, buy now, pay later as a concept is great — you buy something now and have time to pay if off. However, what has ended up happening, similar to credit cards, is that people didn’t pay. Or they financed a $10 T-shirt when they didn’t need to and ended up paying interest that doubled the price. It’s not all bad, though.

I asked Siemiatkowski, who incidentally also tweeted about it, how Klarna addresses the comparison to credit cards. He said that the problem with the credit card industry is that some of the players have applied bad practices and tried to trick people. Buy now, pay later often gets looped into that discussion.

“You have to be mindful of who you underwrite,” he said. “If I tried to make the argument that people shouldn’t use credit cards at all, I am not going to win. We are not using revolving lines, we are mindful of interest rates and we take real-time transactions into account. That leads to our average balance being $100 compared to the average balance of $5,300 for credit card users.” — Christine

Weekly News

Sarah Perez writes about Amazon‘s and Shopify’s announcement of “a significant integration that will now allow Shopify merchants to offer ‘Buy with Prime’ on their Shopify stores. The Buy with Prime feature allows online consumers the option to purchase their items using the store payment method in their Amazon wallet when processing payments through Shopify’s checkout . . . The tie-up is notable given Shopify has been positioned in the past as a challenger to Amazon’s business.” More here.

Manish Singh reports on India’s PhonePe entering the stock and mutual fund investment sector. He noted it was the latest in a string of new strategic expansions the payment app was doing to retain its 450 million-plus user base and win in new categories. Read more.

Also from Manish comes a story on Jio Financial Services’ plans to expand to merchant lending and insurance. Jio Financial is a unit of Indian conglomerate Reliance Industries. At Reliance’s general meeting, CEO Mukesh Ambani said this move would “massively increase financial services penetration by transforming and modernizing them with a digital-first approach that simplifies financial products, reduces cost of service and expands reach to every citizen through easily accessible digital channels.” Read more.

From Ivan Mehta, Hallmark is getting hip with the times. It partnered with Venmo to enable you to gift money to your loved one through a Hallmark card. You can think about it as Hallmark upgrading the card with the “check fold,” except targeted toward those who probably have never written a check. Check it out for yourself.

“What impact do startups have on the world? Often, a heck of a lot. And when a group of startups works on a similar set of problems, they frequently bring about massive shifts in how day-to-day life is lived. In the case of financial access in Latin America, new data indicates that startups have had a large, and measurable, impact.” Alex Wilhelm and Anna Heim dig deep here.

Web3 infrastructure firm MoonPay has launched an investment arm that will focus on early-stage startups in web3, gaming and adjacent fintech categories, Jacquelyn Melinek exclusively reported. More here.

Teamshares might seem like a private equity firm with the way it has been acquiring mom-and-pop companies. However, Silicon Valley editor — and soon to be our editor in chief — Connie Loizos speaks with co-founder and CEO Michael Brown about how Teamshares is a fintech company out to generate revenue from a growing array of fintech products that it sells to the businesses it buys. Read what Brown had to say.

Meanwhile, the sessions on the fintech stage at Disrupt are shaping up to be ones you won’t want to miss. Get the scoop on what we’ve been working on.

And last but not least, there are some changes afoot here at TechCrunch. Editor in chief Matthew Panzarino is stepping down after an amazing 10 years with the company, and Connie Loizos, founder of the fabulous StrictlyVC newsletter, is stepping up.

Other items we are reading:

The 54 most promising fintechs to watch

Fed warned Goldman’s fintech unit on risk, compliance oversight

Robinhood buys back shares once owned by Sam Bankman-Fried

JPMorgan increases stake in Brazilian digital bank C6 to 46%

Cover Genius appoints David Rudow as chief financial officer

BMO launches mobile wallet for virtual cards with Mastercard and Extend


From Jason Mikula: The smallest bank in Tennessee, renamed Lineage Bank, grew an astonishing 790% in two years, powered by cheap deposits gathered via BaaS platforms Synapse and Synctera

From Natasha Mascarenhas: “Rho confirms my scoop from June”

Image Credits: Jason Mikula/X

Blogging around:

What’s next for FedNow. Want more? Read TechCrunch’s coverage of FedNow.

Apple Pay and the DAN. There’s lots to know about Apple Pay. Keep up with TechCrunch’s coverage of Apple Pay.

Fundraising and M&A

As seen on TechCrunch

Ivy raises $20M to take open-banking payments international

MFast get backing from Wavemaker Partners to increase financial services access in Vietnam

Seen elsewhere

Eyeing to help companies sell more, US-based Mediafly raises $80M

Parallel raises $1.85 million pre-seed investment

Discover the Fintech Stage at Disrupt 2023

Check out the Fintech Stage at TechCrunch Disrupt 2023, taking place in San Francisco on September 19–21, where we cover web3, banking, and more. Last-minute passes are still available. Save 15% with code INTERCHANGE. Register now!

Image Credits: Bryce Durbin

Disclaimer – This is just shared content from above mentioned source for knowledge sharing.


Procurement is painful, so Pivot wants to simplify it



Earlier this year, a big French tech company started requiring an email to the CEO for every purchase above €1,000. That’s because they didn’t have the right tool to manage procurement.

Meet Pivot, a new French startup that wants to overhaul spend management solutions. Pivot wants to work with young companies that are growing fast and feel like they need a procurement solution. Instead of picking a legacy business spend management system from an ERP vendor, Pivot wants to be the first (and last) procurement system for these companies.

At the helm of the startup, you will find three experienced co-founders. Romain Libeau was one of the first employees at Swile and more recently acted as the Chief Product Officer for the French unicorn. Marc-Antoine Lacroix has spent several years working for Qonto as the Chief Technology Officer and then Chief Product Officer. Estelle Giuly has been a workflow engineers for several enterprise companies and for

“I worked a lot on operations at Swile, and especially on all the internal tools. I actually saw a sequencing where first we tried to get as many customers as possible, so first we focused on all the tools for our go-to-market strategy and sales — basically Salesforce. Then, you have a lot of customers, and you want to keep them happy. So we structured our customer service, our customer success team,” Romain Libeau told me.

“And then you get to the last brick, which is how well you manage all your financial flows,” he added. And that’s where Pivot comes in.

When companies hire a head of procurement, that person usually starts by listing all the requirements and issues a call for tenders. Usually, they get to choose between Oracle NetSuite’s procurement component or maybe Coupa. It then takes several months to integrate the product in the company and procurement teams feel like they are only using 10% of the feature set.

Pivot isn’t the only startup trying to improve procurement. In the U.S., Zip and Levelpath have both raised tens of millions of dollars. “There are some regional features, European features when it comes to compliance and the payment ecosystem,” Libeau said.

But the fact that some American startups are thriving also proves that there is a real market opportunity. That’s why Pivot has already raised a $5.3 million pre-seed round (€5 million) from several VC firms (Visionaries, Emblem, Cocoa, Anamcara and Financière Saint James) as well as entrepreneurs and investors such as Loïc Soubeyrand (founder of Swile), Steve Anavi (co-founder of Qonto), Hanno Renner (co-founder of Personio), Oliver Samwer (co-founder of Rocket Internet), Pierre Laprée, Alexis Hartmann and Alexandre Berriche.

And things have been advancing at a very rapid pace. After this funding round in April, the company started developing the product over the summer and launched it in September with a first client — Voodoo.

“We’re rolling out gradually, because, as I always tell our team, more haste, less speed. But we’re going to end the year with around ten customers. So we’ve got the deals, but we don’t want to rush into anything,” Libeau said.

A PO workflow for humans

If you work for a big company and you often fill out purchase orders, you know that it’s a painful process. There are too many fields, you’re not sure what you’re supposed to write in each field and you would rather find a workaround to avoid purchase orders.

Pivot is well aware of that and has designed a tool that makes the PO workflow less painful. Admins can set up workflows from Pivot’s interface directly — no coding skills required. For instance, a very large purchase with a software vendor might trigger a security review, an IT review, a legal review, etc. That’s why Pivot is betting on third-party integrations and an interface that works for everyone.

Pivot integrates directly with your existing tech stack. It fetches the company’s org chart for the approval workflow from the HR system, it retrieves budgets from Pigment, Anaplan, etc. It then communicates with your communication tools, such as Slack, Microsoft Teams and Jira.

And, of course, Pivot integrates with ERP software (NetSuite, SAP…) so that vendors, cost centers, compliance rules and more are instantly propagated once a purchase order is validated.

Too many companies waste time in approvals and endless workflows. Pivot wants to add a layer of spend management without slowing down business teams. And the timing seems right as many companies are reviewing how they spend money.

Image Credits: Pivot

Disclaimer – This is just shared content from above mentioned source for knowledge sharing.

Continue Reading


Why we’re seeing so many seed-stage deals in fintech



Welcome back to The Interchange, where we take a look at the hottest fintech news of the previous week. If you want to receive The Interchange directly in your inbox every Sunday, head here to sign up! It was a relatively quiet week in fintech startup land, so we took the time to scrutinize where we’re seeing the most funding deals.

Seed deals everywhere

Across the board in all industries, except perhaps AI, we’ve seen a big drop in later-stage funding deals and no shortage of seed-stage rounds.

When it comes to fintech, I can tell you at least anecdotally that the vast majority of pitches that hit my inbox are for seed rounds. It is very rare these days to get pitched for Series B or later, or even for Series A rounds.

Venture banker Samir Kaji, co-founder and CEO of Allocate, points out that the private markets often take their cues from the public markets and as such, it’s no surprise that we’re seeing far fewer later-stage deals and a plethora of seed rounds. The Fintech Index — which tracks the performance of emerging, publicly traded financial technology companies — was down a staggering 72% in 2022, according to F-Prime Capital’s State of Fintech 2022 report.

“Seed is typically the least affected because those companies are just too early to really feel like you have to worry about where the public markets are,” he told me in a phone interview last week. “We’re so far divorced from the time period where these companies are going to be large enough where the public market sentiment is going to really matter.”

Allocate, which recently just closed on $10 million in capital, is currently an investor in about 60 funds. But Kaji is seeing the tide beginning to turn.

“The investment pace in 2022 was just so slow, and the beginning of 2023 was incredibly slow as well, but we’re starting to see things pick up as people are now starting to see that the bid ask on deals at the Series A and later are starting to narrow,” Kaji added. “And I think entrepreneurs have started to capitulate to this new environment. This always is the case — it’s like an 18- to 24-month lag in the public markets. So I would expect much more later-stage activity again in the next 18 to 24 months.”

I asked our friends at PitchBook what they’re seeing, and unsurprisingly, in the second quarter, there were more seed deals forged in the retail fintech space (135) compared to any other stage. When it came to the enterprise fintech space, early-stage deals accounted for most of the deal activity (239) with seed-stage coming in a close second (221), according to PitchBook.

Will we start seeing more later-stage deals in 2024? I sure hope so. Will we see any fintechs actually go public? That’s probably less likely. But you can be sure we’ll be on the lookout.

Slope continues its climb

It’s always great to see startups rise through the ranks, especially at a time when fintech hasn’t been doing so well. One of the companies I have had the pleasure of following is Slope. The company, founded by Lawrence Murata and Alice Deng, developed a business-to-business payments platform for enterprise companies.

When covering the company’s initial $8 million seed round in 2021, I learned that Slope’s origins came from Murata watching his wholesaler family struggle with an easier way to manage payments. He and Deng built the company so that moving to a digital order-to-cash workflow was seamless.

Last year, Slope raised another $24 million in Series A funding, and this week banked $30 million in a venture round led by Union Square Ventures, which co-led the Series A. It also included participation from OpenAI’s Sam Altman and a list of other heavy VC hitters. Read more. — Christine

co-founders Lawrence Lin Murata and Alice Deng, B2B payments

Slope co-founders Lawrence Lin Murata and Alice Deng. Image Credits: Slope

Weekly News

TechCrunch Opinion: Fintech actually has a value system: Here’s how we can reclaim it

Introducing the a16z Global Payments Hub

Other items we are reading:

Apple is ordered to face Apple Pay antitrust lawsuit

Greenlight celebrates launch of web-based financial literacy library

Funding and M&A

As seen on TechCrunch

Pan-African contrarian investor P1 Ventures reaches $25M first close for its second fund

QED and Partech back South African payment orchestration platform Revio in $5.2M seed

Crediverso takes on legal after $3.5M capital infusion

Series, which aims to replace ERP systems, lands $25M

Seen elsewhere

Luge Capital: $71M first close of second fund completed

Colektia completes purchase of non-performing loans for $72M

Mexico’s albo receives $40m in Series C funds, striving for neobank profitability

Grow Credit Inc., a top 30 fintech app, secures $10m funding with USAA as lead investor in Series A round

StretchDollar raises $1.6M in pre-seed funding

WealthTech Vega exits stealth with over $8M funding

Farther closes Series B funding round to gain $131M valuation — This new round comes a little over a year after the wealth tech firm raised a Series A on a $50 million valuation. Check out TechCrunch’s earlier coverage of Farther.

Image Credits: Bryce Durbin

Disclaimer – This is just shared content from above mentioned source for knowledge sharing.

Continue Reading


How to raise a Series A in today’s market



If you’re an early-stage founder, the crazy days of 2021 are a distant memory. Money is tight, and the process of getting more is as unsettled as ever.

The past few tumultuous years have tossed out the milestones that defined previous Series A benchmarks. But that doesn’t mean the game is lost. At this year’s TechCrunch Disrupt, three investors shared their perspectives on what’s changed, what’s working today, and what advice they’re giving founders who are looking to raise a Series A.

“As companies mature to seed and Series A, a year and a half ago, if you were at a million or even approaching a million in revenue, a Series A would come together in a snap. That has changed really quickly,” Maren Bannon, co-founder and managing partner at January Ventures, told the audience. “Now it’s probably more like 2 [million] to 3 million in revenue where those rounds come together in a snap.”

For founders, the moving goalposts can be incredibly frustrating — especially since the reasons for it are beyond their control. After a remarkable 13-year bull run, uncertainty crept into the market last year, dampening investor appetite for risk. Rising interest rates compounded the problem.

As a result, Series A investors have pulled back dramatically. “What we’ve noticed in the statistics is that the Series A deployment is down 60% over the last year and a half. The amount deployed per Series A is down 25% from $10 million to $7.5 million. And the number of deals getting done is much fewer,” said James Currier, general partner at NFX.

“The bulk of seed stage companies were [successfully] raising off of story, not traction,” Loren Straub, general partner at Bowery Capital, said of market conditions two years ago. “I think there’s been a real shift in focus towards traction, momentum, legitimate product-market fit.”

“A lot of the Series A investors are understandably looking for a higher bar,” she added.

A market crowded with venture capitalists hasn’t helped, either, Currier said. Back in the ’90s, there were about 150 general partners in the U.S., he said. Today, there are more than 31,000 listed on Signal, a network of investors his firm runs.

Disclaimer – This is just shared content from above mentioned source for knowledge sharing.

Continue Reading


Copyright © 2023 All Rights Reserved, Noor Marketing