BlackRock’s appetite for Bitcoin mining stocks ⛏; All-in-one banking for the middle class 👀; Coinbase’s crypto diversification play 😎
Good Morning FinTech. 28/30
Good morning Everyone,
And happy Monday! I hope you had some time to relax and get your steem out. Here’s a mix of 3 FinTech stories to start off your week:
BlackRock’s appetite for Bitcoin mining stocks ⛏
SEC filing 🔮 BlackRock, the world’s largest asset manager, had nearly $400 million invested in Bitcoin mining companies at the end of the second quarter, according to U.S. Securities and Exchange Commission (SEC) filings.
Two companies ⛏ The SEC filings dated June 30 show BlackRock held stakes of 6.71% in Marathon Digital Holdings and 6.61% in Riot Blockchain, Forbes reported.
The money 💸 The total amount invested in the two companies amounts to just under $383 million. The investment is spread across a number of BlackRock's mutual funds and exchange-traded funds (ETFs), such as its iShares Russell 2000 ETF.
Still a drop in the ocean 🌊 Given that BlackRock has around $9.5 trillion in assets under management, $400M is less than 0.1% of their portfolio and is just a small drop in the ocean. On the other hand, you gotta start somewhere… 👀
✈️ THE TAKEAWAY
Mainstream FinServ players go crypto? BlackRock’s stakes in the crypto mining firms are very very small but they are starting to reflect a bigger trend. One can remember that earlier this month, fellow asset manager Fidelity Investments also disclosed an investment in Marathon Digital. This is reflecting the increased interest mainstream financial services companies are taking in the crypto sector. Who’s next? 🤔
All-in-one banking for the middle class 👀
The fundraise 💸 One, a startup that aims to bring ‘all-in-one banking’ to the middle class, has raised $40M in a Series B round of funding.
Progressive Investment Company (the insurance giant’s investment arm) led the round, which included participation from Obvious Ventures, Foundation Capital, Core Innovation Capital, and others. The financing brings One’s total raised since its 2019 inception to $66M.
The product 📲 Over the past 11 months, the startup has worked to enhance its core product offering, launching overdraft protection, an auto-save feature that rewards automatic savings contributions at 3.00% APY, cash flow-based credit lines and a credit builder product to help its customers build financial health. One claims that it has helped its users automatically save nearly $20M collectively since its launch, a number that grows daily.
According to the founders, stretched middle-income households and working families deal with financial stress on a daily basis and are largely unsupported by current offerings. Hence, One was born in 2019, with public availability in 2020.
✈️ THE TAKEAWAY
It’s all about the UX 🙌🏼 One differs from the challenger banks in the market in that they have created a “superior mobile banking experience” for the 80% of the market that is not super prime or subprime. They have both a debit and credit offering and a vastly better user experience (vs. traditional banks or challengers like Chime and/or Aspiration). That’s their USP. But will better UX and a modern tech stack will be enough to win the neobank race in the US? That’s a big big question…
Coinbase’s crypto diversification play 😎
The approval 🥳 Crypto brokerage firm Coinbase has been given the green light from its board to purchase more than $500M worth of crypto on its balance sheet, according to a tweet from its CEO Brian Armstrong.
Not only BTC 😌 A blog penned by Coinbase's chief financial officer Alesia Haas indicated that the purchase would include Ethereum as well as other assets tied to the decentralized financial world.
"We will become the first publicly traded company to hold Ethereum, Proof of Stake assets, DeFi tokens, and many other crypto assets supported for trading on our platform, in addition to Bitcoin, on our balance sheet," she added.
Helping the big guys 👀 Coinbase, which tapped the public markets in April, has helped companies including MicroStrategy and Tesla make large crypto purchases. Firms like MicroStrategy view the move as a way to protect capital from potential inflation, The Block reported.
Getting ready for the crypto winter 🥶 As reported by the Wall Street Journal, Coinbase has also stockpiled billions of dollars worth of cash in the event of a crypto winter or regulatory crackdown. It could also put that capital to work to make acquisitions.
✈️ THE TAKEAWAY
Diversification, diversification, diversification. The recent moves by the crypto giant Coinbase is a clear diversification play to be less reliant on their trading commissions. The recent developments are quite obvious, given that in their recent earnings Coinbase stated that the upcoming quarter might not be that good. The growing competition in the digital assets space makes players like Coinbase think of alternative ways how to earn money. Putting crypto onto their balance sheet is probably the easiest one (though the risks are high). I sense more M&As are soon to come too.
🔎 What else I’m watching
Wells Fargo goes Bitcoin 👀 Wells Fargo has registered a private Bitcoin fund with U.S. regulators, becoming the latest bank with an indirect crypto investment vehicle for its wealthiest clients. NYDIG and FS Investments are partnering on the offering. The new fund is passive, a break from earlier reports that Wells Fargo would pitch wealthy investors with an actively managed offering, a source familiar with the matter told CoinDesk.
SEC wants to regulate DeFi 🤔 The Securities and Exchange Commission (SEC) has its eye on the decentralized finance (DeFi) space but has yet to figure out how to develop a regulatory framework. SEC Chairman Gary Gensler told the Wall Street Journal that some DeFi schemes have the characteristics of systems that would fall under the agency’s oversight.
Adyen’s growth 📈 Adyen saw a 67% increase in processed volume during the first half of 2021, the payments company said in its earnings report. According to the Dutch firm’s letter to its shareholders, Adyen processed 216B euros ($252B) in the first six months of the year. Adyen attributed that growth to three factors. First is the continuous addition of well-known brands to its platform along with minimal churn. Among the newest clients is global delivery giant Just Eat Takeaway. Online commerce still has lots of room for growth 🚀
Argo goes Nasdaq 💸 Argo Blockchain, the only crypto miner listed on the London Stock Exchange, filed for U.S. Securities & Exchange Commission approval to sell American Depositary Shares (ADS). The shares will be listed on the Nasdaq Global Market under the ticker "ARBK." Details of the proposed offering, such as the price range and number of shares on offer, have yet to be determined, the company said.
Neobank for musicians? 🤔 Nerve has announced one of the first neobanks created specifically for musicians. Nerve’s mobile app merges user experience and financial technologies to help artists build stronger communities and sustainable careers.
💸 Following the Money
Brazil-based online retailer Nuvemshop has become the latest unicorn startup in Latin America, after raising $500M in a recent round of fundraising.
Pakistan-based ecommerce platform Airlift has raised $85M in its Series B financing round at a valuation of $275M. Airlift operates a quick commerce service in eight cities, including Lahore, Karachi and Islamabad in Pakistan. Users can order groceries, fresh produce, and other essential items, including medicines, as well as sports goods from the Airlift website or app and have it delivered to them in 30 minutes.
Travel FinTevh Hopper has raised $175M in a Series G funding round bringing its total raised to date to $585M.
Nacelle, an ecommerce infrastructure, has closed on a $50M Series B round from Tiger Global. This is just six months after its $18M Series A round, led by Inovia, and follows a $4.8M seed round in 2020. Moreover, Nacelle grew 690% in 2020 in terms of revenue, and customers are signing multiyear contracts.
👋 That’s it for today! Thank you for reading and have a productive Monday! And if you enjoyed this newsletter, invite your friends and colleagues to sign up:
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