Mastercard is winning the Web3 Wars too 😎; Web3 infrastructure was hot, but few expected it to be this hot 🤯; Goldman Sachs ditches their branded credit card 💳
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:
Cash App is turning into a FinTech beast we've not seen before 😳 [deep dive into Block’s latest earnings + 3 more bonus reads]
Coinbase’s latest results provide mixed feelings 🧐 [a closer look at the numbers + why the bullish case for Coinbase is still valid]
Venture Capital funding has fallen off a cliff 😳 [what can & should you do + 2 bonus reads on how significantly improve your chances of getting funded]
Stripe expands its reach with Tap to Pay for Android 🌍 [why it's big; Stripe’s biggest mistake ever + 3 more bonus reads]
January was great for Robinhood. But it's not good enough 🤷♂️
When corporate innovation works, or how Zelle is dominating P2P payments 💸
NFT lending platform from ex-Coinbase employees. The next big thing? 🤔
Spotify’s NFT-powered playlists 🎶 [why they matter; what are Spotify’s Web3 plans + lessons for FinTechs from Spotify’s quest into audiobooks]
As for today, here are the 3 FinTech stories that were changing the world of finance as we know it. It was the craziest week in 2023 so far, so definitely check out all the above stories.
Mastercard is winning the Web3 Wars too 😎
The news 🗞 Payments giant Mastercard MA 0.00%↑ is now accepting payment in digital assets making the first major step forward for normalizing crypto usage.
More on this 👉 Mastercard has teamed up with Web3 tech innovator Immersve to process online purchases made using crypto wherever the Mastercard payment option is available.
How it will work? 🤔 The partnership between the two entities will enable users to conduct crypto payments by leveraging USD Coin tokens. To be specific, once a transaction is completed on the user’s end, USD Coin tokens are converted to fiat and used to settle transactions on Mastercard’s network. USD Coin (USDC) is a Circle-issued stablecoin backed by the US dollar.
In order to settle these real-time cryptocurrency transactions, Mastercard and Immersve rely on a series of decentralized protocols. The collaboration will help users to make direct crypto payments through their existing Web3 wallets without having to rely on the collateral of a third party, as Immersve will partner with a third-party settlement provider and allow its customers to use USDC for all purchases.
Clients will be able to access the new system via their Web3 wallets and use their private keys to approve payments. Furthermore, Web3 wallets and decentralized finance protocols can integrate into Immersve’s APIs and smart contracts in order to enable transactions anywhere Mastercard is accepted.
✈️ THE TAKEAWAY
What it means? 🤔 This move is important not only because it’s a strong step towards normalizing crypto usage. More importantly, it could further cement Mastercard’s leadership in the new digital economy. It has pretty much won the BNPL wars, so now it’s crypto’s time!
Remember: The real winner of the Crypto Wars is… Mastercard? 🤔
Web3 infrastructure was hot, but few expected it to be this hot 🤯
Following the money💰 Web3 infrastructure firm Nefta raised a $5 million seed round led by Play Ventures at a $32.5M valuation, The Block reported.
The firm was last valued at $10M last June when it raised $1M in pre-seed funding from Picus Capital. That's a 225% jump in valuation in just 8 months 🤯🤯🤯
The USP 🥊 Founded last year, Nefta provides tools to businesses looking to enter and grow in the Web3 space.
These tools include bespoke APIs, software development kits, and white-label services to help businesses integrate digital assets, multi-chain wallets, and custom marketplaces.
✈️ THE TAKEAWAY
Recession-proof vertical ✅ Since the beginning of 2023, I’ve covered a number of Web3 companies that are becoming quite buzzy. Let’s take a big-picture view now so we could understand why it’s happening. One of the key things to understand is that despite the rise of Bitcoin and Ethereum, along with the emergence of new categories like DeFi, NFTs, etc., Web3 developers still represent less than 1% of the 31.1M software developers globally. The core reason is simply that the tools and infrastructure available to Web3 developers are much less robust than that of Web2. This, therefore, makes it more difficult to get started building, experimenting and deploying in Web3. That’s all quickly changing, however, as the number of monthly active Web3 developers hit all-time highs at the end of 2021. And to support this growing contingency, we need a robust infrastructure that could power the next stage of Web3 growth and innovation. Although historically, infrastructure projects in crypto have raised around $19 billion between 2017-2022, the most of any category, we’re still very early. If we believe that Web3 is the future, it’s not only a recession-proof vertical. More importantly, now it’s the best time ever to build that infrastructure and define the future going forward.
Graph: Web3 developer stack by Coinbase
Goldman Sachs ditches their branded credit card 💳
The news 🗞 Investment banking giant Goldman Sachs GS 0.00%↑ has abandoned developing a branded credit card for retail customers powered by the same tech it built for the Apple Card, according to CNBC.
What happened? 🤔 Scrapping its credit card idea, which first arose in October 2021 to increase profits and loyalty for its retail business, was all about strategy change.
Fears of a potential economic downturn last year and mounting losses from Marcus, its consumer banking brand (Marcus brand lost $1.2B in the first 9 months of 2022), led Goldman to say enough and it overhauled the entire unit.
✈️ THE TAKEAWAY
What it means? 🤔 Despite being a well-known, multibillion-dollar financial institution (FI), Goldman still struggled to penetrate the consumer credit card market, which we expect to hit $3.15 trillion in volume this year. That’s massive! This goes on to show again that consumer FinTech is super competitive and really really hard. It’s definitely not for everyone and Goldman found it the hard way.
Bonus: RIP Goldman Sachs (Marcus)🪦
🔎 What else I’m watching
Adyen is coming for Stripe’s lunch? 🤔 Payments superstar Adyen is inviting applications for its first North American accelerator event. The financial technology platform said in a press release that this edition of the Adyen Accelerator program is designed for startups that are focused on social impact initiatives in the United States, Canada, and Mexico. Applicants must be direct-to-consumer (DTC) businesses that have an impact on at least one of the United Nations Sustainable Development Goals, have an existing viable product that has launched in the North American market, be looking for support to scale, and be in their pre-seed or Series A stage, according to the release. Stripe, Adyen’s biggest competitor globally, is often touted as the payments champion when it comes to SMEs (while Adyen is dominating in the enterprise). This move, although indirect, could be Adyen’s first step towards coming after Stripe’s lunch… Reread: Adyen is the fastest-growing global payments platform 🚀 [a deep dive into the payments giant you can no longer ignore]
Goodbye 👋 Crypto hedge fund Galois Capital is closing down and returning what remains of its money to investors, per the Financial Times. Galois was caught up in the FTX collapse, suffering a mortal wound given the amount of money locked up in the now-bankrupt exchange. Galois Capital confirmed the shutdown in a Twitter thread, saying, "it is true that our flagship fund is shutting down." Galois sold its bankruptcy claims for 16 cents on the dollar, per the FT report. Remember: Genesis files for bankruptcy. Here's why it's alarming🚨
Falling down 📉 Moody’s downgraded the creditworthiness of Silvergate Capital and its bank subsidiary Silvergate Bank. The move is the latest public blow to the troubled crypto-friendly bank. Silvergate reported a fall in deposits, losses, and job cuts last month, citing a “transformational shift” driven by a sea change in the digital asset market. Investment firms such as Citadel Securities and Susquehanna Advisors Group have bought significant stakes in Silvergate in recent days. Bonus: FinTech death toll rises: FTX collapse causes a massive bank run 🤯 [+6 bonus reads]
💸 Following the Money
Israel-based fintech Ledge is emerging from stealth after raising $9M in seed funding for its automated payments command centre. Led by New Enterprise Associates (NEA), Vertex Ventures, FJ Labs, and existing investors Picus Capitals, Ledge plans to use the funds to enhance its no-code finance operations platform, with greater “treasury management” capabilities.
Exchange operator Euronext has made an indicative offer to buy B2B WealthTech platform Allfunds for about €5.5B in cash and stock. In response to press speculation, both parties have issued statements confirming the takeover offer.
Kaito, an AI-powered crypto search engine, now has $5.3M in its pocket to improve browsing with AI and ChatGPT.
👋 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: