Amazon + Stripe = Marriage made in Heaven ๐; Sequoia doubles down on early-stage founders ๐; Book Now, Pay Later ๐จ
You're missing out big time... Weekly Recap ๐
๐ Hey,ย Linas here!ย Welcome back to a ๐ weekly free editionย ๐ 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, itโs the only newsletter you need for all things when Finance meets Tech.
If youโre not a subscriber, hereโs what you missed this week:
Genesis files for bankruptcy. Here's why it's alarming๐จ [deep dive with lots of fascinating things]
PhonePe raises $350M to turbocharge growth and become a Super App ๐
Major US banks want to take on Apple Pay & PayPal. Itโs understandable yet somewhat delusional ๐ฌ
When it comes to FTX, it seems that everybodyโs a creditor ๐คฏ
Cryptocurrency infra is the hottest thing in crypto right now๐ฅ
Revolut's new Ultra subscription plan is a totally useless money sink ๐คฆโโ๏ธ
As for today, here are the 3 FinTech stories that were making a huge difference this week. It was the most interesting and intense week yet, so definitely check out all the above stories.
Amazon + Stripe = Marriage made in Heaven ๐
The deal ๐ค Retail giant Amazon AMZN 0.00%โ and global payments processor Stripe have signed an agreement to expand their partnership.
More on this ๐ Amazon started using Stripe in 2017 to accelerate market expansion in Asia and Europe and support millions of Prime Day, Black Friday, and Cyber Monday purchases worldwide.
Under the new agreement, Stripe will become a strategic payments partner for Amazon in the US, Europe, and Canada, processing a significant portion of Amazonโs total payments volume. The service will be employed across Amazonโs business units, including Prime, Audible, Kindle, Amazon Pay, Buy With Prime, and more.
Stripe has used Amazon Web Services (AWS) to provide its core computing infrastructure for some time. This partnership has enabled Stripe to improve developer productivity and hasten product development. Under the new agreement, Stripe will continue to expand its usage of AWS and use its various services to improve global commerce, such as Graviton for data processing efficiency and Nitro enclaves for data security enhancement.
โ๏ธ THE TAKEAWAY
What this means? ๐ค First and foremost, this deal is what all business partnerships should be all about. In fact, Stripe + Amazon is a marriage made in heaven - Stripe just won a massive enterprise customer while Amazonโs AWS won a super fast-growing enterprise customer. Looking ahead, there are two hypotheses that this partnership has made me think about more and more: (1) Amazon might go less aggressive on payments per se and focus on AWS primarily, OR (2) deepening the partnership with Stripe is a good trial for a potential future acquisition (at current prices, Stripe is a super cheap buy for Amazon). Whichever one proves to be true, it will be an interesting watch. Stay tuned!
Bonus: Amazon + Venmo is a match made in heaven ๐ซ
Stripe just killed MoonPay, Ramp, and dozens of other FinTechs ๐คฏ
Sequoia doubles down on early-stage founders ๐
The news ๐ธ Venture firms are getting back into the funding game asย Sequoia, a long-standing venture capital firm,ย announced a new $195 million fundย for seed-stage startups, according to Forbes.
More on this ๐ Early investor in Apple, Airbnb, Stripe, Instagram, and WhatsApp, among others, Sequoia will reportedly back founders across the United States and Europe. The capital will also be used to invest in future cohorts or its Arc program, an internal Sequoia initiative that invests between $500,000 and $1 million into rising founders across the world and thatโs currently accepting applications.
BTW, Sequoia backed crypto companies such asย Chainalysis,ย Fireblocks,ย and most (in)famouslyย FTX. The latter got a $200M cheque thatโs bigger than their new fund and is currently worth $0 ๐
Despite that, Sequoia partner Alfred Linย saidย that the firm remains optimistic about crypto in an interview last week โ and partner Shaun Maguire says that he's still very drawn to the space.
Good timing โฐ According to new data from AngelList, fewer startups went out to raise in the latter half of 2022, and of those that did, a significantly smaller percentage raised at a markup.
This means that increasingly less favorable market conditions for startups are actually good news for investors. While median and average valuations increased YoY, they showed marked declines in 4Q22, indicating the market is becoming more buyer-friendly, as per AngelListโs data.
โ๏ธ THE TAKEAWAY
Time to build ๐ Firms like Sequoiaย are starting 2023 with around $1.3 trillion in dry powder, but are constrained by a dizzying financial market. Thatโs actually a brilliant piece of news for the early-stage founders. Not only because of the new Sequoia fund. More importantly, as you can see from the above data, pre-seed valuations have barely moved since Q421. This means that both founder and investor expectations should be similar, with little to no pushback from both ways. In fact, we can clearly see this happening across various FinTech verticals, including crypto and Web3. Hence, itโs a brilliant illustration that now is a perfect time to build. To make it a bit easier, leverage these resources so you would increase your chances of success:
Raise 20% more cash for your startup with this trick ๐ค
And to grow your chances of getting funded even more, read this:
Increase your chances of getting funded with this cheat sheet ๐ธ
Book Now, Pay Later ๐จ
The deal ๐ค US-based online travel agency KAYAK has partnered with Affirm AFRM 0.00%โ to give travelers more spending power and payment flexibility when booking through KAYAK.
More on this ๐ By selecting Affirm at checkout on KAYAK.com, approved KAYAK travelers can split the total cost of flights, accommodations, and rental and car sharing over $150 into monthly payments. From there, travelers will see the total cost of their purchase and will never pay more than they agree to upfront, as there are no late or hidden fees when paying over time with Affirm.
โ๏ธ THE TAKEAWAY
The BNPL effect ๐ฅ Love it or hate it, but BNPL is here to stay. You canโt build a sustainable business on it alone, but if you donโt have a BNPL strategy as part of your roadmap you are definitely going to miss out. KAYAK seems to get it.
Bonus: reread my FinTech predictions for 2023:
๐ What else Iโm watching
Baller move ๐๐ Founders Fund made a $1.8 billion return on crypto. The venture capital firm founded by billionaireย Peter Thiel, closed its eight-year bet on crypto,ย sellingย the majority of its entire crypto portfolio by the end of March 2022. The fund made its first investment in bitcoin in 2014. Around two-thirds of its overall investment was thenย usedย to buy the currency, according to a Financial Times report. The fund completely sold up its crypto portfolio and made a solid $1.8 billion return on its investment. Founders Fund is now in talks to take an equity stake inย OpenAI, the developer behind chatbotย ChatGPT.
Klarna โค๏ธ Spotify. Klarna has taken a leaf out of Spotify's playbook with the launch of Money Story, a personal summary of 2022 that provides consumers with useful insights into their spending habits Money Story uses the animated 'story' format popularised by social media, to provide users with spending insights that they can convert into financial goals for 2023. The package visualizes spending patterns and presents animated quiz questions that prompt users to reflect on where they think they spent their money in 2022. Next to their total spending for 2022, consumers also receive insights segmented by month, retailer, and category. Each userโs Money Story also includes nudges to discover and test Klarnaโs money management tools, such as the budget tracker and the monthly spending breakdown.
๐ธ Following the Money
US-based payments companyย Linkย has raised $30M to date, after a $20M Series A and a $10M seed round, to expand merchantsโ access to direct bank payments.
Private sharding startup andย Nearย protocol spinoffย Calimero Networkย raised $8.5M, The Block reported. Khosla Ventures,ย Lyrik Ventures,ย and theย Near Foundationย were co-leading.
HatchiFi,ย a company that helps users connect crypto accounts to apps, also raised a $1.2M seed round, per a press release.
๐ Thatโs it for today! Thank you for reading and have a relaxing Sunday! And if you enjoyed this newsletter,ย invite your friends and colleagues to sign up: