Mary Ann<\/em><\/a><\/p>\nLast week, I wrote four companies that had an insurance technology angle. One thing they all had in common? They each had a very specialized focus.<\/p>\n
This is notable if you consider the fact that many general insurance technology companies have struggled over the past year. As my colleague Alex Wilhelm points out in Friday\u2019s Equity podcast: Root has zeroed out value, and Metromile subsumed into Lemonade, which has lost most of its value. This led him, Natasha Mascarenhas and me to ask: Since broad-based consumer neo-insurance providers have failed to generate value, will the niche players do better?<\/p>\n
While we don\u2019t know the answer to that question, we do<\/em> know that investors seem to be digging the niche insurtech players.<\/p>\nOn September 19, I reported how Boundless Rider<\/strong> and CoverTree<\/strong> each raised millions of dollars to provide insurance for very specialized products. Boundless Rider was founded specifically to serve riders of motorcycles, e-bikes and power sport vehicles. In particular, the company sees huge potential in the e-bike market, which is expected to surge in the coming years. CoverTree\u2019s only focus is on residents of prefab or manufactured homes.<\/p>\n\u201cIf it\u2019s built in a factory \u2014 and this includes modular homes, tiny homes and ADUs \u2014 we help insure it,\u201d former LinkedIn product manager Adarsh Rachmale told me in an interview. \u201cAnd because we\u2019re so focused, we do it so much better.\u201d<\/p>\n
Then, midweek, I covered Pie Insurance\u2019s<\/strong> massive $315 million Series D raise. As I tweeted in 2021, the size of this round wouldn\u2019t have turned heads. But in today\u2019s environment, where investors are pulling back and venture funding has slowed considerably, a $315 million raise stands out. That company, too, has a very specialized focus: providing workers\u2019 compensation insurance to small businesses. The Washington, D.C., company told me that in the first four months of 2022, it increased its annualized run rate premium (ARR) to nearly $300 million. It also more than doubled its gross written premium in the first quarter of 2022 compared to the same period in 2021.<\/p>\nAnd last but certainly not least, I wrote about how engineer Mark Shaw \u2014 who co-founded activity and fitness tracking app Strava and insurance software company Guidewire \u2014 raised $15 million for his latest venture: Inclined<\/strong>. Shaw\u2019s third startup lends against whole life insurance policies, with the goal of digitizing \u201cmany of the traditional time-intensive operations\u201d involved in the process.<\/p>\n\u201cThere\u2019s a trillion dollars of cash value in whole life in the U.S alone,\u201d co-founder Josh Wyss told . \u201cWe want to lean into this huge opportunity.\u201d<\/p>\n
The current whole life lending market today against that $1.1 trillion is $150 billion, and that\u2019s Inclined\u2019s initial focus. Wow. Who knew??<\/p>\n
Weekly News<\/h2>\n
Seen on <\/em><\/p>\nConnie Loizos reported that \u201cKlarna<\/strong>, the 17-year-old Stockholm, Sweden\u2013based buy now, pay later outfit\u201d told employees on Monday in a video message from COO Camilla Giesecke that it is reducing staff again to \u201creflect\u201d its new and \u201cmore focused nature.\u201d Around 500 Klarna employees were \u201cinvited to watch Giesecke deliver the news, including in IT and recruiting, though Klarna tells us in a separate statement that the job cuts will impact fewer than 100 employees globally.\u201d<\/p>\nFrom Carly Page: \u201cFintech startup Revolut<\/strong> has confirmed it was hit by a highly targeted cyberattack that allowed hackers to access the personal details of tens of thousands of customers. Revolut spokesperson Michael Bodansky told that an \u201cunauthorized third party obtained access to the details of a small percentage (0.16%) of our customers for a short period of time.\u201d Revolut discovered the malicious access late on September 11 and isolated the attack by the following morning.\u201d<\/p>\nManish Singh writes: \u201cIn just six years, UPI<\/strong> has become the most popular way Indians transact online. The mobile electronics payments system was used for over 6.57 billion transactions in the world\u2019s second largest internet market last month. Now, it\u2019s taking steps to supercharge its growth\u2026The central bank is working to expand UPI to \u2018several nations in Asia and the Middle East and other parts of the world,\u2019 and is setting up an international subsidiary.\u201d<\/p>\nSeen on +<\/em><\/p>\nFrom Anna Heim: \u201cIn 2021, we wondered whether Brazil could be in for an IPO bonanza. It hasn\u2019t happened: Not only is Latin America\u2019s largest economy going through the same IPO drought as the rest of the world, but also one of its highest-profile public listings, Nubank<\/strong>, is coming to a sudden end.\u201d<\/p>\nFrom Alex Wilhelm: \u201cIn late 2020 and 2021, companies offering consumers savings, investing and trading products were hot shit. Coinbase, Robinhood, M1 and others grew rapidly; hell, startups were born and scaled that offered other<\/em> companies the ability to bake services like equity trading into their platforms! We all know what happened next: 2022 brought a change in market conditions and consumer interest \u2014 or, perhaps, ability \u2014 to save, invest and trade declined. This led to Coinbase, to pick a well-known entity in the consumer fintech market, rapidly flipping from impressive profits to stiff losses in the space of a few quarters. Robinhood saw its market value fall sharply, and M1 laid off staff<\/a>.\u201d For a quick checkup on consumer fintech activity ahead of Q3 data, head here.<\/p>\nTo get a more in-depth look at the state of the Earned Wage Access<\/strong> space, how it should be classified and where the money is going, Karan Bhasin spoke to a few active investors in the space. Read more here.<\/p>\nAnd elsewhere<\/em><\/p>\nFrom Engadget: \u201cYou no longer need to live in the US to use Affirm\u2019<\/strong>s buy-now-pay-later services for much of your online shopping. Affirm is expanding to Canada through a partnership with Amazon. Spend $50 or more at Amazon.ca and you can choose Affirm\u2019s pay-over-time option at checkout to split the bill into monthly payments. As in the States, there aren\u2019t any late fees or surprise charges. The payment option will be available within a month. The Canadian rollout comes roughly two years after Affirm bought local equivalent PayBright \u2014 this is effectively a rebranding. Affirm serves Australia as well, but only for people buying Peloton exercise equipment.\u201d<\/p>\nFrom Robinhood\u2019s<\/strong> blog: \u201cToday we\u2019re introducing a new Robinhood Gold benefit that enables members to earn 3% interest on their brokerage cash \u2014 up from 1.5% for non-Gold members. With the new interest rate, Gold customers can now earn even more income on their uninvested cash while they plan their next move and collect 23x more in interest when compared to the national average savings rate. The added benefit comes on the heels of the Fed rate hike earlier this week.\u201d<\/p>\nHR startup Rippling<\/strong> announced last week that it was branching out into fintech by getting into the increasingly crowded spend management space. In a blog post, product lead Rishab Hegde announced the launch of the company\u2019s new offering, which includes corporate cards, expense management, and bill pay. The company is banking on the fact that since Rippling\u2019s spend management product is tied to a company\u2019s HR system and employee data, it gives the business a way to \u201cview and manage\u201d all of its monthly cash burn \u201cin one place.\u201d<\/p>\nFrom PYMNTS: \u201cFinance super app for businesses Flexbase<\/strong> is now offering B2B merchants a buy now, pay later (BNPL) solution called Flexbase Pay. With this product, merchants can get paid immediately while also giving their business customers the option to get 60 days of interest-free financing\u2026In practice, merchants need only add a \u2018Pay in 60 days with Flexbase\u2019 button to their checkout to enable the Flexbase Pay option, and then Flexbase handles the underwriting process and offers the merchants\u2019 customers financing within five minutes.\u201d<\/p>\nThe Information reports that while \u201cStripe<\/strong> founders John and Patrick Collison have indicated the payments software pioneer, valued in its last fundraising at $95 billion, is in no rush to go public\u2026a new listing could solve one looming problem for the 13-year-old startup: Stock awards to some of its earliest employees face a deadline next year\u2026If those original Stripe employees exercise the options before they expire, they\u2019ll need to come up with cash to pay a steep tax bill based on the private value of Stripe\u2019s shares. Stripe could arrange for another secondary offering to buy these loyal employees\u2019 private stock, money the employees could then use towards their tax bills. Alternatively, an initial public offering or direct listing would allow staff \u2014 as well as Stripe\u2019s investors \u2014 to cash out.\u201d<\/p>\nJeff Bezos\u2013backed Chipper Cash<\/strong>, a cross-border payments app used by over 5 million people throughout Africa and its diaspora, announced a partnership with card issuance platform Highnote<\/strong>. The companies said in a news release that the new service will give U.S.-based Chipper Cash customers a way \u201cto access their digital wallets to make transactions in the US and abroad that require a card payment, such as e-commerce purchases.\u201d<\/p>\nStash<\/strong>, which has built an investing and banking app with over 2 million customers and nearly $3 billion in assets under management, says it has launched a new product called Stash Core, which it describes as a \u201cnew, proprietary infrastructure platform that underpins the service for Americans who bank like investors.\u201d<\/p>\n\n
Image Credits:<\/strong> Richard Drury (opens in a new window)<\/span> \/ Getty Images<\/p>\n<\/div>\nFundings and M&A<\/h2>\n
Africa<\/em><\/p>\nGhanaian fintech SecondStax allows investors to access capital markets outside their countries, raises $1.6M<\/p>\n
Asia<\/em><\/p>\nSingapore\u2019s Arbor Ventures notches $193M toward next early-stage fintech fund<\/p>\n
Zopper raises $75 million to solve India\u2019s insurance problem<\/p>\n
Europe<\/em><\/p>\nSequence orders up $19M led by a16z for a new approach to B2B fintech<\/p>\n
European digital bank Monese nabs $35M from HSBC<\/p>\n
Latin America<\/em><\/p>\nHSBC, Goldman, Santander ink $810 million in financing for Kavak<\/p>\n
United States<\/em><\/p>\nNoble emerges from stealth to help companies extend lines of credit to their customers<\/p>\n
Fintech app Portabl raises $2.5M to help consumers securely store financial data<\/p>\n
Healthcare financier Scratchpay secures $35M Series C<\/p>\n
Remofirst raises $14.1M to make it cheaper and easier for businesses to hire remote workers globally<\/p>\n
Sardine raises $51.5M led by a16z to sniff out fishy fintech transactions<\/p>\n
Proptech Rook raises $4.1M to grow its \u201cShared Value Investment\u201d program<\/p>\n
Property management startup DoorLoop raises $20M<\/p>\n
![\"globe](\"https:\/\/www.ghanamma.com\/gp\/wp-content\/uploads\/2022\/09\/GettyImages-168635061-e1660907417140.jpg\")
<\/p>\n
Image Credits:<\/strong> PonyWang \/ Getty Images<\/p>\n<\/div>\nA Little About Me<\/h2>\n
Did you know that The Interchange was cited as \u201cRecommended Reading\u201d in a recent Financial Times newsletter? I was psyched by the mention!<\/p>\n
I was a guest on the One Vision podcast! I chatted with Unconventional Ventures\u2019 Bradley Leimer about how I view the current fintech landscape and how I approach \u201cthe craft and responsibility of reporting the changing face of technology.\u201d To listen to the episode, click here.<\/p>\n
To learn a little more about me, check out this MuckRack Q&A, where I talk about everything from what I look for when considering pitches to some random personal facts.<\/p>\n
Also, a point of clarification: While crypto arguably falls under the \u201cfintech\u201d umbrella, we have a team of writers (Anita Ramaswamy, Lucas Matney and Jacquelyn Melnik) who are more focused on crypto, whereas I am more focused on fintech other than crypto. In other words, send your crypto pitches their way, not mine! Oh, and TC has a crypto newsletter as well! Sign up here to get Chain Reaction in your inboxes.<\/p>\n
And that\u2019s all for this week. Thank you for your support in reading, and sharing, this newsletter. I know there are many fintech newsletters out there, so I\u2019m honored that you\u2019ve chosen to read mine. Until next time\u2026xoxoxo Mary Ann<\/p>\n<\/div>\n