Nubank gets green light to offer savings accounts in Colombia 🇨🇴; Historic: US SEC approves 11 spot Bitcoin ETFs 👏; Drama @ Carta, & killing the dream of being the “Nasdaq for private markets” 😳
You're missing out big time... Weekly Recap 🔁
👋 Hey, Linas here! Welcome back to a regular 🔓 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:
The Microsoft of Banking just made history 😳 [a closer look at JPMorgan’s crazy performance in 2023 and what’s ahead in 2024 + some good bonus reads]
It’s happening: Elon Musk’s 𝕏 will launch P2P payments this year 😳 [what it’s all about & why it could be huge + some solid deep dives]
Investors bet on Stripe IPO in 2024 🔔 [what’s happening & what it’s telling us + a bonus dive into Stripe]
BlackRock is betting Big on Infrastructure with a $12.5B GIP deal 🤯
BTC ETF wars will have one big winner - it’s not what you think 😎
The Ultimate Africa Investor List 🌍 [200+ VC & PE firms and 70+ Angel Networks shaping the entrepreneurial landscape in Africa]
As for today, here are the 3 thrilling FinTech stories that were changing the world of finance as we know it. This week was crazy intense in the financial technology space, so make sure to check all the above stories.
Nubank gets the green light to offer savings accounts in Colombia 🇨🇴
The news 🗞️ Brazilian digital bank Nubank NU 0.00%↑ has received approval from Colombian authorities to operate as a financing company, paving the way for the fintech giant to expand its offerings in the country beyond credit cards.
Let’s take a look.
More on this 👉 We can remember that Nubank first entered the Colombian market in 2020 with the launch of a credit card product that now boasts around 800,000 customers.
The approval from Colombia's Financial Superintendence thus allows Nubank's local subsidiary Nu Colombia to introduce a savings account called Cuenta Nu.
According to Nu Colombia's general manager Marcela Torres, Cuenta Nu will help Colombians reach their saving goals and financial plans and will allow us to broaden our impact to millions of people.
The move comes as Nubank commits significant capital to its Colombian operations, recently announcing $150 million in investments over the next two years. Combined with prior capital injections since 2021, Nubank's total commitment to Colombia approaches $450 million.
✈️ THE TAKEAWAY
Why this matters? 🤔 The ability to offer savings products is key to NU’s growth strategy for Colombia and its goal of becoming a leader in digital financial services in the country. Savings accounts represent an attractive product for consumers, not to mention it also gives Nubank an opportunity to cross-sell other offerings. Furthermore, expanding the product portfolio also positions Nubank to better compete with traditional banks in Colombia as it aims to grow its customer base beyond the 800k credit card holders it currently serves (still impressive though). Zooming out, it’s clear that with 39 million credit card customers and 65 million savings account holders in its home market of Brazil, Nubank's approval to offer similar products in Colombia signals the FinTech giant's ambition to replicate its success across Latin America (first)*. And savings accounts lay the foundation for it to become an integral part of consumers' financial lives. Big.
*the rest of the world might be next.
ICYMI: Nubank and Circle partner up to unlock stablecoin potential in Brazil 🇧🇷 [why this is good]
Nubank continues strong growth and profitability momentum 🚀 [a closer look at their latest numbers, what’s driving crazy revenues + more bonus reads & deep dives]
Historic: US SEC approves 11 spot Bitcoin ETFs 👏
The news 🗞️ The U.S. Securities and Exchange Commission has approved 11 spot Bitcoin exchange-traded funds, including those of Grayscale, Bitwise, and Hashdex, according to a statement on Wednesday.
More on this 👉 Notably all 11 issuers are listed in this order/filing and no one is being left behind at the starting gate:
Quick refresher ♻️ What is a Bitcoin ETF & why BTC ETF approval matters? In case you’re my first-time reader, a Bitcoin ETF is a type of exchange-traded fund that tracks the price of Bitcoin, allowing investors to gain exposure to the cryptocurrency without directly it. This investment vehicle offers a more convenient and regulated way for institutional and retail investors to invest in Bitcoin, as it can be traded on traditional stock exchanges.
The approval of a Bitcoin ETF is a significant event for the crypto industry, as it signals a growing acceptance of cryptocurrencies by regulators and the broader financial community. This development is expected to increase the liquidity and accessibility of Bitcoin, making it easier for a wider range of investors to participate in the cryptocurrency market.
✈️ THE TAKEAWAY
Looking ahead 👀 First and foremost, we must repeat again that the approval of a Bitcoin ETF by the SEC is a major milestone for the cryptocurrency industry expected to bring more mainstream adoption and accessibility to Bitcoin. This development could increase the liquidity and accessibility of Bitcoin, making it easier for a wider range of investors to participate in the cryptocurrency market. Speaking about market impact, it’s not that easy. On one hand, the BTC ETF approval is likely to have a positive impact on the Bitcoin market, as it could lead to increased demand and potentially drive the price of Bitcoin higher. However, there is also the possibility of a "sell the news" event, where the price of Bitcoin could dip as investors sell their holdings to collect profits. But one thing is clear - history has been made today.
ICYMI: BTC ETF wars will have one big winner - it’s not what you think 😎 [+ more reads]
Drama at Carta, and killing the dream of being the “Nasdaq for private markets” 😳
The news 🗞️ After a weekend scandal involving allegations of misusing customer data, FinTech startup unicorn Carta abruptly exited the secondary trading business that was core to its goal of becoming the Nasdaq for private markets.
Carta CEO Henry Ward admitted defeat in a blog post, calling the failure his greatest disappointment.
Let’s take a look.
More on this 👉 The debacle started when Finnish startup Linear's CEO Karri Saarinen revealed on LinkedIn that Carta salespeople had used private cap table data to solicit Linear investors about selling their shares without Linear's consent. Though Ward blamed a "rogue employee," Saarinen identified other startups facing similar unapproved outreach to their investors. Ups.
We can remember that this secondary trading platform, Carta X, was launched in 2020 with ambitions to reinvent capital markets. However, it brought in only $3 million annually for Carta. For the perspective, the company's core cap table business generates over $250 million in revenue.
By having access to sensitive startup equity data, Carta faced inherent conflicts operating a trading platform. Customers feared their data could be exploited for financial gain, undermining trust in the company. As Ward acknowledged, "if we are trading secondaries, people will always worry that we are using the data."
Therefore, Carta decided to shut it down.
✈️ THE TAKEAWAY
Looking ahead 👀 Not sure this was the right move strategically (i.e. it could have been a chance to make it right when it comes to data privacy), but it was 100% a communication crisis. And now Carta is left trying to salvage relationships by "prioritizing trust" after this blunder. But without new growth engines, its multibillion-dollar valuation looks precarious. To say the least. More importantly, the failure of its Nasdaq dreams raises doubts over Carta's ability to expand beyond cap table management and thus justify its valuation. Looking at the big picture, it's a warning sign to all startups that handling sensitive customer data brings obligations as well as opportunities. As Ward conceded, "Having ground truth data is not an advantage if we can't use it." Well, you can always use it the right way 😉
🔎 What else I’m watching
Lightyears ahead ⚡️Investment app Lightyear saw its assets under administration soar 8x in 2022 alongside 45% employee growth and expanding into 2 new markets. Monthly growth neared 20% as the lean team rapidly launched 8 products reacting to market dynamics. Ironically, with interest paid on cash, average customer cash allocations rose from 18% to 26% amid equity market uncertainty. Tesla, Apple, and Amazon were the top-held stocks while Vanguard and iShares’ S&P 500 and dividend ETFs led in funds. After accelerating European reach in 2022, Lightyear now aims to localize offerings by country. Upcoming priorities span tax wrappers like ISAs in the UK, expanding asset selection, and new languages.
Blockchain-based media platform? 🤔 Media corporation Fox has launched a blockchain platform called Verify to manage AI usage rights for its content brands including Fox News and Fox Sports. Built with Polygon Labs, Verify negotiation licenses with AI firms and tracks content authenticity by cryptographically signing media in a database. The public beta went live on January 8th with 89,000 signed content pieces so far. Polygon Labs touts how Verify allows consumers to identify trusted content sources as AI-generated media makes truth difficult to distinguish. For Fox, the system grants traceable AI licenses while certifying original content. The move aligns with Webster's digital priorities since taking over as CEO and follows Fox Weather's launch on blockchain last year. Verify underscores media companies' growing adoption of blockchain infrastructure to control and monetize IP.
💸 Following the Money
Nigeria-based FinTech Cleva has announced that it raised $1.5M in pre-seed funding, with the round being led by 1984 Ventures.
AbbeyCross, a wholesale FX platform focused on improving the payment market infrastructure for emerging market currencies, has raised $6.5M in a seed funding round.
Mylapay, an Indian FinTech pioneer, secures $550k in seed funding.
👋 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:
Been waiting for this the whole week! Thanks a ton - reading and learning 10X.
Def my favourite newsletter