The collapse of the Silicon Valley bank provides valuable lessons around the world
you welcome in exchange! If you received this in your inbox, thank you for signing up and for your vote of confidence. If you are reading this as a post on our site, sign up Gentlemen So you can pick it up directly in the future. Mary Ann She’s on a much-deserved break this week, so I’m bringing you all the last week’s fintech news. Now, let’s dive into the fintech news because you’re probably wondering what happened with your favorite bank, and I promise to get to that first. Let’s go! – Christine
We learned a lot about Silicon Valley bank collapse Since the last time I read this newsletter (Saucepan And Saucepan).
The last one SVB Financial filed for Chapter 11. and First Republic Bank, which was I got caught up in all this chaos Earlier this week, some rescuers found themselves in the way of some of the largest banks in the country who reportedly came together to bolster the bank with approx $30 billion in rescue deposits.
This week, some of my colleagues took an in-depth look at the effects on consumers, businesses, banks, investors, etc. – all over the world – who place deposits with SVB. If anything, it goes to show how connected the startup ecosystem really is.
Annie Nganga and Taj Ken-Okafor get the scoop African companies affected by the collapse of the SVB. For example, they spoke to Nala, a mobile money transfer startup, which was able to withdraw its funds from SVB before it collapsed. In contrast, Chipper Cash was among the many startups that did not have access to a portion of their funds at the time.
They pointed out how pervasive SVB is in the startup ecosystem when it comes to companies opening bank accounts in SVB, especially those that were part of the US acceleration program, they even explained how difficult the process was when prospective account holders didn’t have a social security number or Established US address. They also write that this type of incident, along with existing high-risk banking options, has “reinforced the need to build homegrown solutions” in Africa.
“If you want US-based banking services that instill (still) credibility with investors, these are your options,” said Stephen Ding, co-founder and general partner at Africa-focused early stage VC Lab firm DFS Lab. “I think the changes are that founders need to know how to manage counterparty risk. Survey networks and treasury management are top of mind for us.”
Meanwhile, Brian Heater reached out to founders and investors in the robotics sector, typically a capital-intensive industry, about what the fallout could mean for them in terms of accessing future capital and continuing to diversify funding sources.
An interesting comment came from Peter Barrett of Playground Global, who said, “If SVB rises from the ashes — and we mitigate the weaponization of concentrated digital media — money may not become impossibly expensive for capital-intensive technologies like bots.” On the other hand, Now that we have bot memory to run the banks, things can get messy. What’s the best way for an adversary to attack a botnet innovation? We’ve seen how devastating a handful of influencer tweets and emails can be in cannibalizing a valuable and respected organization of its age. 40. Why bother with a cyberattack when a few big, capital letters from seemingly reliable sources could injure thousands of our most innovative companies?”
actually. As you can imagine, this is all continuing to evolve, so stay tuned for more.
Going forward, we are constantly being asked to diversify our holdings in the financial world – having money in a number of different mutual funds or having some money in checking and other money in savings. Over at TechCrunch+, all this SVB work got Natasha Mascaren thinking about how to do it.
I talked to some of the founders and investors about the concept of “Single points of failure. Specifically, in other places the company may diversify—for example, the founding team and succession plans—to ensure it doesn’t have all of its eggs in one basket.
Before I get into any more news, I wanted to mention that while people have been withdrawing money from SVB, there are still some that support the bank. For example, Brexit announced that it was Depositing $200 million of her funds into SVB – Withdrawal from other major banks to do so. CNN has also reported on others.
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Some startup banking companies have stepped up in the wake of the Silicon Valley bank collapse to offer their services and help companies maintain cash flow. Mary Ann mentioned about a few companies, such as ruwhich saw a spike in new customers, incl Mercurywhich moved quickly over the weekend to launch a new product called Mercury Volt. This product offers customers expanded FDIC insurance of up to $3 million via a new product following the Silicon Valley bank. Collapses. That’s 12 times the industry standard for organizations with $250,000 in FDIC insurance offered by other organizations.” Then on Friday the company raised that, Announce on Twitter that “By Monday, Mercury customers will have access to up to $5 million in FDIC insurance — 20 times each bank’s limit.”
Strips He was very active this week. I updated an earlier story Mary Ann worked on about using Stripe to get additional funding. At the time, it was expected to bring in about $2 billion, but instead, Stripe ended up with $6.5 billion But at a discounted valuation of $50 billion. Series 1 proceeds will go to “providing liquidity to current and former employees and addressing employee withholding tax obligations related to stock awards, retiring Stripe shares that will offset the issuance of new shares to Series 1 investors.” Also, Stripe was chosen for Working with OpenAI To monetize ChatGPT and DALL-E.
Manish Singh reports: “the phone he have It raised another $200 million As part of an ongoing tour, a move that has now helped her Withdrawing $650 million in recent weeks Despite the slump in the market with the Indian fintech giant raising its war chest afterwards Recently separated from parent company Flipkart. Walmart, which majority owns PhonePe, has invested $200 million in the startup. The ongoing round values the Bengaluru-based company at $12 billion up front. The startup said it plans to raise up to $1 billion as part of the ongoing round.
Natasha Mascarenhas reports: “The founders are still flick after a week Silicon Valley bank collapse. rumors swirling about who might be looking to buy the beleaguered bank’s assets. Some big companies have urged their portfolio managers to do so diversify their assets While the bank was collapsing, it continues to do so, despite regulators stepping in to ensure all depositors have access to their stored money. While diversifying assets seems obvious in retrospect, following those tips is actually harder than it seems.”
according to screening‘s Q1 2023 Digital Security and Trust IndexBuy Now, Pay Later (BNPL) Payment fraud companies saw a whopping 211% increase in 2022 compared to 2021. The report looked at over 34,000 websites and apps and highlighted some specific scams that fraudsters use to steal from BPNL companies and merchants. For example, Telegram is one platform where Sift said “the rapid spread of fraudsters advertising services they can provide with stolen information,” including fake credit cards and selling compromised email credentials. In one scheme, Sift noticed a scammer posting “unlimited access” to an account on three major BNPL providers for just $35.
Farewellproviding comprehensive payment capabilities It has advanced further with its digital authentication solution, which combines security and seamless payment experiences for its customers. During testing, Adyen was able to authenticate the consumer on behalf of the issuer, while they remained on the merchant’s checkout page, helping merchants get up to 7% conversion.
Finance and Mergers and Acquisitions
Seen on Techcrunch
Wingspan raises $14M for comprehensive contractor payroll platform
Here’s a New Company Card Startup, Backed by $157M in Equity and Debt, Post-Brex, Ramp
Payment platform Metaverse Tilia receives strategic investment from JP Morgan
Indonesia-based Broom is building automated asset-backed lending for used car dealers
Nigerian credit-led FairMoney has acquired PayForce in play banking for retailers
And in other places
Mastro secures $43 million in growth equity investments led by FTV Capital
Cover Genius, a built-in protection insurance technology, is acquiring Clyde
Greece’s Natech acquires €10m convertible bonds for expansion
Payments infrastructure startup Payabli closes $12 million
Apexx Global, a payments organization startup, has raised $25 million
Chile-based recurring payments company Toku raised $7.15 million
That’s it for now. I hope you enjoyed my take on Mary Ann’s Column. Don’t worry, she’ll be back in the March 26th issue! Have a great week, Christine