Shift4 to acquire rival POS firm Revel further strengthening market position 💸; FIS streamlines focus, preps for FinTech acquisitions 👀; Tokyo firm adopts Bitcoin as reserve asset 🇯🇵
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:
Top resources for building and scaling billion-dollar startups 🦄 [600+ pages of knowledge and advice to launch & scale your next unicorn in 2024]
Visa unveils next-generation payment innovations to revolutionize commerce 🛍️💳 [what it’s all about & why it’s huge + bonus deep dives in both Visa & Mastercard]
Nubank 1Q 2024: outpacing LatAm FinTechs& positioned for sustainable profitability 🟣📈 [looking into the most important numbers, uncovering what they mean so we can see why NU is just too good to be ignored right now]
Paysafe is gaining momentum, but challenges remain 👀 [analyzing and breaking down their latest numbers, what challenges are ahead & why I’m cautious about the stock + 4 bonus deep dives into FinTech stocks you can’t ignore right now]
dLocal weathers short-term headwinds, but emerging markets opportunity remains intact 📊 [& why the long-term investment thesis centered around the massive growth potential of emerging markets remains well intact]
FinTech startup aiming to disrupt QuickBooks with embedded accounting for SMBs 👀
Lydia splits into two apps as it launches challenger bank Sumeria 🏦
As for today, here are the 3 fascinating FinTech stories that were transforming the world of financial technology as we know it. This is one of the most thrilling and intense weeks this year thus far, so make sure to check all the above stories.
Shift4 to acquire rival POS firm Revel further strengthening market position 💸
The deal 🤝 Payment processing company Shift4 Payments FOUR 0.00%↑ recently announced its plan to acquire point-of-sale (POS) company Revel Systems for $250 million in cash.
The acquisition, expected to close by July 1, is part of Shift4's strategy to enhance its market position and tap into new growth opportunities.
Let’s take a quick look at this.
More on this 👉 Revel Systems, known for its iPad-based POS systems, currently serves about 18,000 merchant locations, representing a $17 billion payment opportunity for Shift4.
By integrating Revel's capabilities into its own SkyTab POS system, Shift4 thus aims to streamline its product offerings and cross-sell payment services to Revel's existing customer base.
Zooming out, this acquisition follows Shift4's recent purchases of Appetize and Focus POS, demonstrating the company's commitment to expanding its reach and strengthening its position in the market. The combined sales efforts in the U.S. and partnerships in Europe are expected to drive further growth for Shift4.
✈️ THE TAKEAWAY
What’s next? 🤔 Looking ahead, the acquisition of Revel Systems is a significant step for Shift4 as it continues to build a comprehensive and competitive POS and payment processing ecosystem. By leveraging Revel's expertise and customer base, Shift4 is well-positioned to capitalize on the growing demand for integrated payment solutions and expand its market share. The successful execution of this acquisition could pave the way for future growth opportunities and solidify Shift4's position as a leader in the industry. Bullish? Absolutely.
ICYMI: Shift4: poised for stellar growth despite recent selloff 🚀 [breaking down their latest numbers & why it’s one of the most undervalued FinTechs on the market right now]
FIS streamlines focus, preps for FinTech acquisitions 👀💸
Following the trends 👀 Finance giant Fidelity National Information Services (FIS) FIS 0.00%↑ is set to embark on a new phase of growth and acquisitions following the sale of a majority stake in its WorldPay business to private equity firm GTCR.
Under the leadership of CEO Stephanie Ferris, FIS has positioned itself for future success by reducing its debt load and focusing on its core strengths in banking and capital markets services.
Let’s take a look a quick look at this.
More on this 👉 The divestment of WorldPay has allowed FIS to allocate approximately $1 billion annually to strategic acquisitions. The company is targeting smaller, synergistic products that complement its existing offerings or fill gaps in its portfolio.
Ferris has indicated that FIS is particularly interested in acquiring businesses with proven revenue and EBITDA, as well as those that align with the company's growth areas, such as digital and payments capabilities in banking and commercial lending technology in capital markets.
FIS expects its banking services division to grow between 3.5% and 4.5% by 2026, driven by recurring revenue, core digital and payments revenue, and strategic acquisitions. The capital markets division is projected to grow even faster, with an expected increase of 7.5% to 8.5% next year, also aided by targeted acquisitions.
As one of the world's largest financial services companies, FIS plays a critical role in the industry, with its technology powering many of the biggest private equity firms and banks globally. The company's stability and reliability were highlighted during the regional bank collapses in March 2023, when many bank CEOs reached out to Ferris to ensure their systems remained operational.
✈️ THE TAKEAWAY
What’s next? 🤔 Looking ahead, FIS's ability to execute its growth plan and integrate acquisitions seamlessly will be critical to its long-term success. As the fintech space continues to evolve at a rapid pace, FIS will need to remain agile and adaptable to stay ahead of the curve. With Stephanie Ferris at the helm, FIS appears well-positioned to navigate the challenges and opportunities that lie ahead, shaping the future of financial technology and services. Given that the stock is slightly undervalued now, I’m definitely keeping a closer eye on them going forward:
Tokyo firm adopts Bitcoin as reserve asset amid Japan's economic woes 🇯🇵
The news 🗞️ Metaplanet Inc., a Tokyo-listed investment and consulting firm, has announced its adoption of Bitcoin as a strategic reserve asset in response to Japan's persistent economic challenges.
Let’s take a quick look a this and see why it matters.
More on this 👉 The move comes as the country grapples with the highest government debt-to-GDP ratio among developed nations at 254.6%, according to the International Monetary Fund. Ouch.
Japan's economic difficulties have thus contributed to the yen's recent plunge to a 34-year low against the U.S. dollar, despite the government's decision to raise interest rates in March.
Metaplanet thus sees Bitcoin as a "non-sovereign store of value" that has appreciated against fiat currencies and offers a hedge against Japan's fiscal imprudence and currency volatility.
The company has acquired 117.7 BTC (worth circa $7.2 million as of right now) and plans to hold the cryptocurrency for the long term to minimize taxable gains. Metaplanet also intends to grow its bitcoin reserves by issuing long-dated yen liabilities when opportunities arise.
Zooming out, we must note that the firm's decision to adopt Bitcoin as a reserve asset isn’t unique and is reminiscent of the strategy pursued by U.S.-listed MicroStrategy MSTR 0.00%↑ , which has acquired billions of dollars worth of the cryptocurrency.
Having said that, it just highlights the growing acceptance of Bitcoin as a legitimate asset class and a potential hedge against economic uncertainties.
✈️ THE TAKEAWAY
What’s next? 🤔 Looking ahead, one thing is clear - Metaplanet's adoption of Bitcoin could inspire other companies, both in Japan and globally, to consider diversifying their reserve assets with cryptocurrencies (remember, even Tesla & Block hold BTC). As more institutions embrace Bitcoin, it may lead to increased mainstream acceptance and further development of the cryptocurrency ecosystem. And the maturing market is always good. Moreover, this development underscores the potential for Bitcoin and other cryptocurrencies to play a more significant role in the broader FinTech and finance space. Looking at the big picture, as traditional financial systems face challenges, such as high government debt and currency volatility, it’s getting more and more clear that alternative assets like Bitcoin may gain traction as a means of preserving value and mitigating risks. Maturity.
ICYMI: Bitcoin breaks records again: the relentless rally fueled by institutional demand 📈💸 [analyzing the latest data, thinking about what’s next + two investment thesis for Bitcoin]
🔎 What else I’m watching
Broadridge to Integrate JPM Coin on DLR Platform 🤝🪙 Broadridge has partnered with JPMorgan JPM 0.00%↑ to offer JPM Coin as a settlement mechanism on its Distributed Ledger Repo (DLR) platform. The DLR platform leverages distributed ledger technology to provide clients with intra-day, overnight, and term repo capabilities. This collaboration marks the first time JPM Coin, developed by JP Morgan's blockchain unit Onyx, will offer settlement capabilities to an external digital platform. Available by June, the solution synchronizes settlement across two blockchain networks, achieving delivery vs. payment cross-chain. Synchronized Settlement solutions using JPM Coin aims to be a leading provider of Cash-on-Chain solutions for digital asset platforms globally. ICYMI: AI is eating Finance: JPMorgan is getting into LLMs 😳 [what it’s all about & why it makes sense + more reads on how AI is eating finance] &
JPMorgan doubles down on growing the old-fashioned way: branches 🏦 [why it makes sense + a deep dive into JPM and how it recently made history]
dLocal & Deel Expand Partnership 🌐🤝 Cross-border payment platform dLocal DLO 0.00%↑ has announced an expansion of its partnership with Deel, a global HR and payroll platform, to deliver their services in 15 additional countries. The new markets include Indonesia, Malaysia, Thailand, Vietnam, Ghana, Jordan, Kenya, Morocco, Saudi Arabia, South Africa, Turkey, UAE, and Brazil (with PIX payouts). The collaboration, which began in 2020, has already resulted in increased payment volumes, improved delivery rates, and reduced support issues. Both companies are committed to supporting remote workforces and solving compliance and payroll challenges, with dLocal focusing on connecting global merchants with consumers in Africa, Asia, and Latin America. ICYMI: dLocal weathers short-term headwinds, but emerging markets opportunity remains intact 📊 [& why the long-term investment thesis centered around the massive growth potential of emerging markets remains well intact]
AI Revolutionizes Daily Work at Klarna 🤖💼 Up to 90% of Klarna employees now use generative AI daily, with high adoption rates in non-technical groups like Communications, Marketing, and Legal. Klarna's custom-built AI assistant, Kiki, uses OpenAI's Large Language Models to answer staff queries, handling 2,000 questions daily and providing personalized, context-dependent answers. CEO Sebastian Siemiatkowski says AI boosts productivity and allows employees to focus on strategic tasks. Klarna's communications department uses ChatGPT for unbiased press article evaluation, while the legal team employs ChatGPT Enterprise to draft common contracts, reducing the process from an hour to ten minutes. AI empowers employees and enhances performance at Klarna. ICYMI: Klarna's Resurrection: narrowing losses and preparing for the biggest IPO of 2024 🤑🔔 [a deep dive into their latest numbers to see what they mean & what’s next for Klarna + some solid bonus reads & further dives inside]
💸 Following the Money
Egypt-based fintech startup MNZL has raised $3.5M in a funding round led by P1 Ventures, Ingressive Capital, and Localglobe.
Polymarket has raised a $45M Series B funding round led by Peter Thiel’s Founders Fund and existing investors 1confirmation and ParaFi, with participation from Ethereum co-founder Vitalik Buterin, Dragonfly and Eventbrite’s co-founder Kevin Hartz.
Mexican BNPL platform Aplazo has raised $70M in equity financing, including a $45M Series B.
👋 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:
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