Welcome to my new weekly fintech-focused column. I’ll be posting this every Sunday, so in between posts, listen to the Share podcast and hear Alex Wilhelm† Natasha Mascarenhas and I riff on all things startup! And if you want this straight to your inbox as soon as it becomes a newsletter (soon!), sign up here†
It felt like there was way too much fintech news in the past week than there normally is – and there are always tons of them – so I’ll just cover the highlights here. Finished? Let’s dive in.
More than one proptech company has been struggling lately as the housing market has had its share of ups and downs. The COVID-19 pandemic led to a drop in interest rates and apartment fever, which in turn led more people to want to buy homes or refinance existing homes. Mortgage lenders couldn’t keep up with demand and proptech startups were raising capital left and right.
But a lot can happen in two years and we are dealing with a whole new kind of housing market. Take, for example, interest rates. Currently, the rates for a loan with a term of 30 years fluctuate around 4%. While they aren’t super high, they are clear up from the record low of 2.9% set in January 2021. In addition, many major markets across the country are experiencing inventory shortages. So even people who still want to to buy a house have trouble even find a.
So, what does this mean for proptech startups, you might ask? Unfortunately, lately, rounds of layoffs for one. I broke the news about Better.com’s 9%, or 900-person, staff reduction, in Dec. Then, on February 11, I also broke the (sad) news that a startup called Homie (cute name) based in Utah had lay off about a third of the workforce, or about 90 to 100 people. The company did not respond to my requests for comment, but in a LinkedIn message it cited “changing market conditions” for the move. Like many other online real estate agents, Homie promised lower commissions and a more streamlined process. Also, like many other real estate agents, it has sought to become a one-stop shop for home buyers and sellers by expanding into loan, insurance and title services.
But at least one broker I spoke to believes the startup’s strategy of turning agents into employees is part of the problem. To be clear, it’s not the only company doing this. Redfin has been paying agents a salary for years. Notably, the stock has taken a beating over the course of the 12 months as it also appears to have been impacted by the market shifts. Shares of Redfin closed at $29.84 Friday, slightly above the 52-week low of $25.25, but a whopping 70% below the 52-week high of $98.44. Grant Clayton, a Louisiana real estate agent, believes that strategy is to give agents a salary that has played a part, at least in part, in Homie’s recent challenges. He told me:
†I believe that once agents have turned into employees, they are no longer busy. If agents don’t take care of business, that means the company has to spend their money to provide it, which is a much less efficient way of doing business.
Oh and speaking of Better.com, I did hear some news about one of its former top executives. On February 3, I reported that: Sarah Piercewho served as executive vice president of customer experience, sales and operations at the online mortgage lender, had said goodbye to the company following his fired debacle and reported disagreements with CEO Vishal Garg and the company’s board of directors.
On February 10, Pierce announced on LinkedIn that she has joined Sealed as Chief Revenue Officer. The startup describes itself as “a home wellness company on a mission to make homes healthy, comfortable and cleaner for the planet.”
In a LinkedIn post, Pierce wrote: Having worked in the real estate industry for the past six years, I was shocked to learn that 20% of all greenhouse gas emissions come from heating and cooling our homes.
Sealed’s financial and service model eliminates upfront costs, making it easy and affordable for homeowners to use efficient technology such as air-to-water heat pumps, reduce energy emissions at home and, ultimately, reduce reliance on harmful fossil fuels. Reduce. As an Iron Man fan, I am extremely pleased that Sealed is supported by Robert Downey Jr’s Footprint Coalition Venture and Fifth Wall†
Sounds like a cool gig (no pun intended)!
Alchemy and its dizzying rise in appreciation
On February 8, I reported thatstartup blockchain infrastructure Alchemy had closed on a $200 million Series C expansion which valued the company at $10.2 billion (a round reportedly closed in December 2021 but undisclosed as of yet). The decacorn’s status has been impressive, as the startup was only valued at $3.5 billion in October a $250 million Series C round (up 3.5x) and $505 million after a $80 Million Series B investment (up 19.8x) closed just over 9 months earlier.
But it turns out that the valuation spikes were even bigger than we realized.
A trusted source, preferring to remain anonymous, told me that when Alchemy — which has been described as the “Microsoft of cryptocurrency” — closed its Series A in December 2019, it was valued at just $72 million. That means the startup was still valued at $72 million in March 2021, just before it closed its Series B. So an increase of That to a valuation of $10.2 billion represents: a stunning 142x toename increaseor a jump of $9.48 billion, in about nine months.
That’s insane, even in today’s crazy times.
One of the biggest and earliest players in the buy now, pay later space had a turbulent week after releasing its earnings report. As our own Alex Wilhelm reported on February 11†Excluding yesterday’s declines of more than 20%, Affirm’s stock is down about another 15% today at the time of writing, valued at just $49.70 per share.
I found this particularly interesting as I have been following the BNPL space for a while (a selection of my previous articles on the subject can be found here† here and here† Alex shared some thoughts in his piece about what Affirm’s stock dip could mean for startups, so I won’t go into too much detail. While I think BNPL is disruptive, here to stay and could be helpful to many consumers and merchants alike – there’s no denying that it’s still a form of debt and those who lack self-discipline can easily find themselves beyond their means and in more than their heads.
When Affirm first dropped its S-1 in November 2020, it also revealed that a significant portion of its sales (28%!) came from Peloton, meaning the company had to be careful not to put all its eggs in one basket. . the newest revenue report contained some superficial positive numbers: number of active sellers grew to 168K, up 2,030% year-over-year from 7,900; active consumers grew 150% year-over-year to 11.2 million: GMV grew 115% year-over-year to $4.5 billion and total revenue was $361 million. But one has to ask if/how much Affirm feels a negative impact of Peloton’s misery and what the future holds for the BNPL giant.
Meanwhile, in more positive news for space, our own Romain Dillet reported on French BNPL raise payment startup Alma another round of $130 million in the direction of his effort “to build a new ‘buy now, pay later’ giant in Europe,” showing that startups in the industry are still raising large sums of capital.
Financing frenzy continues
We’ve published too many fintech rounds this week to count on Referus – from all over the world, yay! – and there were others we didn’t reach. I’ll put a link here to some of that funding news:
Vivid Money, a financial super app, has raised $114 million at a valuation of $886 million to expand in Europe
Nigerian fintech Gray Finance received support from Y Combinator
Vietnam-focused investment app Infina raises its starting round to $6 million
Selina has raised $150 million to issue flexible loans that leverage equity
CRV led a $25 million round for Northspyre Note: I wanted to discuss this but just ran out of time… Northspyre, as described by Anna Khan of CRV, is a vertical SaaS real estate game from NYC. She told me, “The CEO is really special and has done a lot of great things in the field of diversity – almost 50% of their tech team are women!” CEO William Sankey co-founded Northspyre in 2017 after working for six years as a real estate developer and project manager in New York City.
Egyptian investment app Thndr has won $20 million from Tiger Global, Prosus and others
YC-backed Duplo has raised a $1.3 million pre-seed to build a financial operating system for B2B companies in Nigeria
Brick Closed $8.5 Million Seed Fund to Enable Open Financing in Southeast Asia
French startup Seyna has raised Eur $33 million to modernize insurance industry infrastructure
Happy Money Reached Unicorn Status, Raising $50 Million Series D-1 Led by Anthemis Group
Financial Venture Studio (FVS) Names Fintech Startup Founder Cameron Peake As Latest Partner
Neo.Tax has raised $10 million to make taxes more of an asset than a liability for startups. Some way it does this? They help access R&D tax credits.
Amira Yahyajoui wants Mos to become a ‘radical’ fintech startup
And finally but certainly not the least, the very talented Tage Kene-Okafor reported on how African startups has raised a record $4.3 billion to $5 billion in 2021 with fintech startups receiving a large portion of that capital.
In other fintech news…
As expected and previously reported by Referus, Apple announced a tap-to-pay feature that allows iPhones to accept contactless payments. Sam Shawki, co-founder of startup magic cubehas thoughts about that, which he shared here†
Alex and the Brilliant Anna Heim continued their insightful coverage of the insurtech space in this article, “Which Insurtech Startups Will Thrive?”
American Express launched its first fully digital consumer checking accountreported TCs Aisha Malik†
Addition Wealth launched to the public with its free, holistic financial planning services, according to TC .’s latest staff reporter Anita Ramaswamy, which will cover fintech and crypto! Can you see how happy I am that she is here? There is simply TOO MUCH fintech news to cover.
Aaand, Aisha also wrote about how Meta’s messenger is unroll the “Split Payments” feature for all iOS and Android users in the United States.
Oof. That was fun – thanks for reading and please share! Also, stay tuned for a very comprehensive Fintech Investor Survey I conducted that will be published on TC+ this week. Good stuff! Have fun watching the Super Bowl if that’s your problem. See you next week!