Klarna makes deeper cuts and now counts ~1000 people laid off in 2022 😔; The platformization of financial technology 🚀; FTX acquires Voyager Digital for basically $0 🤑
You're missing out big time... Weekly Recap 🔁
👋 Hey, Linas here! Welcome back to a 🔓 weekly free edition 🔓 of my daily newsletter. Each day I focus on 3 stories that are making a difference in the financial technology space. Coupled with things worth watching & most important money movements, it’s the only newsletter you need for all things when Finance meets Tech.
If you’re not a subscriber, here’s what you missed this week:
Amazon launching with Affirm in Canada is a brilliant case study of how to grow a FinTech product 🚀
The Future of Finance is Integrated: Mollie launches Mollie Capital 💸
Apple's latest move into NFTs could be a game changer for Web3 🤯
Square + Apple, or the Beginning of the End of Physical Payment Terminals 📲
Banks are becoming crypto companies while crypto companies are becoming banks ₿🏦
Samsung is taking a page out of Apple's playbook and launching a credit card idia 💳
Shopify is a FinTech company that you should be paying attention to 🚀
JPMorgan's push into co-branded cards, & why it can be huge 💳
and more!
As for today, here are the 3 FinTech stories that were making a huge difference this week. It undoubtedly was the most interesting week in the space this month so far, so definitely check out all the above stories.
Klarna makes deeper cuts and now counts ~1000 people laid off in 2022 😔
Cut, cut, cut 🎬 Swedish BNPL giant Klarna is going to do layoffs. Again.
More on this 👉 According to Sifted, the 17-year-old company told employees in a video message from COO Camilla Giesecke that Klarna is reducing staff again to “reflect” its new and “more focused nature.”
Around 500 Klarna employees were invited 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.
Once Europe’s most valuable startup, Klarna employed 7,000 people at the beginning of this year, now it has “around 6,000” employees.
✈️ THE TAKEAWAY
Anti-example 😔 They say if you’re going to cut, cut deeply so you only have to do it once. It seems that most companies are ignoring this wisdom, with Klarna in particular as the new cuts come just 3 weeks after CEO Sebastian Siemiatkowski told Bloomberg that the company was done making layoffs. Ouch! 😬 Zooming out, it’s clear that Klarna is currently experiencing one of the worst momentum in its entire existence. In May, the company shrunk its global workforce by 10%; it also raised funds at a $6.7B valuation in an $800M round, down from the somewhat aspirational $45.6B valuation that Klarna was assigned by SoftBank. It’s getting more and more clear that 2023 will be a critical year for Klarna - it will either break or make the BNPL giant.
More on Klarna:
As Klarna's losses quadruple, 2023 will make or break once BNPL’s top star 😵
Klarnageddon begins as Klarna will lose 85% of its valuation with the fresh funding 🤯
Will becoming a Super App save Klarna? 🤔
1000+ FinTech, Tech & Crypto Talent Ready to Grow Your Business 🚀
The platformization of financial technology 🚀
The role 💼 Commerce technology company Payoneer PAYO 0.00%↑ has hired Assaf Ronen, a veteran of SoFi, Amazon, and Microsoft, to lead a newly established division that integrates Payoneer’s technology, product, and high-value service units.
Ronen has become the company’s first chief platform officer and will head its new platform division.
More on this 👉 As head of the new platform division, Ronen will lead it in its mission of expanding Payoneer’s high-value service offerings — including B2B accounts payable (AP) and accounts receivable (AR), working capital, and merchant services — and enhancing and building new financial products.
The company reported that B2B payables and receivables grew 66% during the most recent quarter, driven by increased use of the virtual Payoneer Commercial Mastercard and improvement in cross-border travel.
✈️ THE TAKEAWAY
Why does this matter? 🤔 This news from Payoneer is a very clear signal that we’re seeing a strong trend towards platformization of FinTech. In other words, more and more FinTechs are evolving to become platforms and ecosystems. And when you think about it, it’s probably the most promising and solid long-term strategy to win big. Stripe, Affirm, Block/Square (probably the strongest one out there) and now Payoneer are all moving there. What about you?
Bonus: Amazon launching with Affirm in 🇨🇦 is brilliant case study of how to grow FinTech product 🚀
Affirm + Stripe shows why ecosystems are crucial in FinTech 🕸
PayPal's biggest threat is coming from around the Block & it's called Cash Pay 💳
FTX acquires Voyager Digital for basically $0 🤑
The prize 🤑 Crypto exchange giant FTX has won the auction for the assets of bankrupt crypto lender Voyager Digital with a bid worth just over 1.42 billion.
More on this 👉 The winning bid includes about $1.31B for the fair market value of Voyager's digital assets and an additional consideration estimated as providing approximately $111M of incremental value.
Voyager says that FTX US's trading platform will enable customers to trade and store cryptocurrency after the conclusion of the company's chapter 11 cases. The deal will be presented to a US bankruptcy court next month and the sale of the assets is still dependent on a vote by creditors.
✈️ THE TAKEAWAY
That’s a steal! 🤯 Let’s do a quick refresh first. Voyager filed for Chapter 11 bankruptcy protection in July, listing assets of between $1B and $10B and liabilities in the same range. This occurred because the company suffered a blow when Three Arrows Capital went bust a week earlier, defaulting on a loan of 15,250 BTC and $350M USDC. When it comes to the deal itself, it’s a real steal. FTX got Voyager basically for free by paying $1.4B for $1.3B in crypto assets + $111MM thrown in to save them the embarrassment. That’s how you do business these days 😎 The best thing? Rumor has it that Celsius might be next… Which again brings us to this:
Reread: FTX is Crypto’s Berkshire Hathaway while its CEO is the new J.P. Morgan 🎩
🔎 What else I’m watching
The lows of lows 😬 The Grayscale Bitcoin Trust (GBTC), which has been trading at a discount since the beginning of 2021, hit a record low last week. GBTC's discount fell to -35.26% — its lowest point ever, according to The Block's Data Dashboard. This means the market price of GBTC shares is over 35% lower than its net asset value or NAV. Grayscale’s bid to convert its product into a spot ETF was rejected based on the regulator's conclusion that the company hadn’t shown sufficient planning to prevent fraud and manipulation. Grayscale later filed a lawsuit against the SEC after the decision. Crypto winter is real…
Bitcoin is greener than you think 👀 A Cambridge Centre for Alternative Finance (CCAF) report recently found that bitcoin mining accounted for roughly 48.35 million tons of carbon dioxide annually (0.1% of global greenhouse gas emissions), which is -14.1% lower than its estimates in 2021. The report based its estimates on the geographical distribution of bitcoin mining in January 2022. CCAF combined its most recent data with public information on the electricity generation methods in different regions. The institute estimated that 37.6% of the energy the industry uses comes from sustainable sources, down from the 59.5% figure that the Bitcoin Mining Council reported for 2Q 2022 (which means that the numbers could be even better). Notably, the figures don't capture "activities that might be expected to reduce emissions," like the use of flare gas, the energy produced behind the meter, and waste heat recovery, due to a lack of data. All in all, it seems that BTC is greener than most people think… 🤷♂️
💸 Following the Money
Two Revolut alumni bag $3M for new startup. Tilt is a shopping app designed like a social media app — think the love child of Instagram, TikTok, Depop, and a flurry of Chinese livestream shopping channels.
Aviva has invested $10M in a VC fund that backs female entrepreneurs in the fintech industry across the UK, Europe, Canada, and the US. Founded in September 2019, the Anthemis Female Innovators Lab Fund is anchored and co-founded by Barclays.
German venture capital firm Point Nine, which backs companies including Delivery Hero, Revolut, and Typeform, has raised €180M in a new seed fund to support business-to-business (B2B) marketplaces and software-as-a-service (SaaS) startups.
👋 That’s it for today! Thank you for reading and have a relaxing Sunday! And if you enjoyed this newsletter, invite your friends and colleagues to sign up: