Trump is venturing into FinTech? ๐คฏ๐ฑ; Revolut expands into commercial real estate lending ๐๐ ; Digital banking pioneer Nubank hits 10 million customer milestone in Mexico ๐ฒ๐ฝ๐ฆ
You're missing out big time... Weekly Recap ๐
๐ Hey, Linas here! Welcome back to a ๐ weekly free edition 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:
The ultimate list of resources for building and scaling billion-dollar companies ๐ฆ [1,500+ pages of knowledge, data, and advice to launch & scale your next unicorn startup in 2025]
AI 100: Top Artificial Intelligence Startups of 2024 ๐ค๐ธ [these companies raised $28B already. Find whose backing them, unlock their exclusive pitch decks & learn from the best]
11 Finance & General Purpose AI Agents You Should Try ๐ค [discover the next generation of automated intelligence for money management, data analysis, and beyond]
Elon Muskโs ๐ partners with Visa, marking a major step towards the Everything App vision ๐ณ๐ธ [what itโs all about, why it matters & whatโs next for ๐ Money + bonus deep dives into Elonโs grand vision for the Ultimate Super App]
Mastercard continues being payments powerhouse with expanding moat & compelling growth runway ๐ณ๐ [breaking down their latest numbers, what they mean & whether Mastercard is worth your time and money in 2025 + bonus deep dives into its competitors]
American Expressโ Q4 2024: premium FinTech powerhouse poised for profitable growth ๐๐ณ [breaking down their Q4 2024 financials, what they tell us & whatโs next for AmEx + a bonus dive into their competition]
a16z exits UK market as crypto-friendly policies draw VC giant back to US ๐๐ฌ๐ง [what it tells us & what can we expect next + bonus VC resources for founders]
SoFiโs Q4 2024: a digital financial powerhouse emerging from its lending roots ๐๐ฆ [breaking down their latest financials, what they mean & whether SoFi is worth your time and money in 2025]
LendingClubโs Q4 2024: a digital banking evolution story with improving economics, though execution risks remain ๐ค๐ฆ [uncoring latest financials, what they mean + bonus deep dive into its biggest competitor]
Credit card crisis looms as record number of Americans make minimum payments ๐๐ณ [why it matters & whatโs next]
Global 6,200+ Investor Database to Fast-Track Your Funding in 2025 ๐ธ [shorten your fundraising time, find your perfect investors, and close rounds faster]
As for today, here are the 3 fascinating FinTech stories that were transforming the world of financial technology as we know it. This was yet another insane week in the financial technology space space so make sure to check all the above stories.
Trump is venturing into FinTech? ๐คฏ๐ฑ
The news ๐๏ธ First, it was Elon and now itโs his buddy Donald Trumpโฆ ๐
Trump Media & Technology Group (TMTG) DJT 0.00%โ just announced the expansion into financial services through its new Truth.Fi platform, committing a whopping $250 million to launch investment products aimed at conservative customers.
The move represents a strategic pivot for the company, which originally started as the parent company of the Truth Social media platform.
Letโs take a look at this, see why it matters, and what it tells us about the future of FinTech.
More on this ๐ The initiative will unfold in two phases. Initially, TMTG will invest up to $250 million of its approximately $680 million cash holdings through Charles Schwab SCHW 0.00%โ, focusing on cryptocurrencies, exchange-traded funds (ETFs), and other investment vehicles.
The second phase involves developing and offering financial products directly to consumers, pending regulatory approvals expected in 2025.
CEO Devin Nunes positioned the venture as addressing perceived discrimination against conservatives in traditional banking, citing recent tensions between major banks and conservative customers. The company aims to invest primarily in what it terms the "Patriot Economy," focusing on American manufacturing, energy, and growth companies. Makes sense, I guessโฆ ๐คทโโ๏ธ
Zoom out ๐ The announcement triggered a notable market response, with TMTG's stock rising approximately 7-11% following the news.
The company has arranged for Yorkville Advisors to serve as the investment adviser for Truth.Fi, building on their existing financial partnership which includes a $2.5 billion standby equity purchase agreement.
โ๏ธ THE TAKEAWAY
Whatโs next? ๐ค This development is rather surprising yet surely interesting and could impact both the financial technology sector and the political-commercial landscape in several ways. First, Truth.Fi's entry into cryptocurrency and decentralized finance aligns with growing conservative interest in alternative financial systems. Given Trump's recent supportive statements about making the U.S. the "crypto capital of the planet," this platform could accelerate mainstream conservative adoption of digital assets. The initiative also represents a broader trend of politically aligned financial services, following similar ventures like GloriFi (which failed in 2022) and Vivek Ramaswamy's Strive. However, Truth.Fi's connection to Trump's substantial following and TMTG's existing technology infrastructure might provide advantages over previous attempts. When it comes to the regulatory landscape, well it presents both challenges and opportunities. To put it slightly. Itโs rather an unprecedented situation that a sitting president potentially controlling a financial company is also seeking regulatory approval, which undoubtedly should create complex governance questions. The success of Truth.Fi will thus largely depend on navigating these regulatory requirements while maintaining its political identity. Zooming out, competition with other tech platforms expanding into finance, particularly Elon Musk's X (formerly Twitter) which recently partnered with Visa V 0.00%โ, suggests an emerging pattern of social media companies diversifying into financial services. This trend could reshape how Americans interact with financial products and potentially fragment the financial services market along political lines. Interesting times ahead ๐ฟ
ICYMI: Elon Muskโs ๐ partners with Visa, marking a major step towards the Everything App vision ๐ณ๐ธ [what itโs all about, why it matters & whatโs next for ๐ Money + bonus deep dives into Elonโs grand vision for the Ultimate Super App]
Revolut expands into commercial real estate lending ๐๐
The news ๐๏ธ London-based FinTech giant Revolut is making a strategic move into commercial real estate lending, marking another significant expansion of its financial services portfolio.
The company has appointed Duncan Batty, formerly head of the real estate finance platform at M&G Investments, to build and lead this new business unit from the ground up.
Letโs take a quick look at this and see why it matters.
More on this ๐ The expansion comes at an intriguing time for the commercial real estate market. While the sector has faced challenges due to the COVID-19 pandemic's impact on office occupancy and ongoing economic uncertainty, CBRE analysts suggest the UK market reached its trough in 2024 and shows early signs of recovery.
This potential turnaround is expected to be driven by lower interest rates and reduced debt costs.
Zoom out ๐ This initiative aligns with Revolut's broader strategy of diversifying its services and moving upmarket. The company has recently launched several high-end financial products, including a private banking division targeting individuals with over $1 million in liquid assets.
ICYMI:
Revolut has also expanded geographically, applying for a banking license in New Zealand and enhancing its trading capabilities in the UK through a new Financial Conduct Authority license.
โ๏ธ THE TAKEAWAY
Whatโs next? ๐ค At this core, this move represents a significant shift in how digital banks are evolving, moving beyond their initial consumer-focused services to compete directly with traditional financial institutions in more complex, high-value sectors. One must note that the timing of this move is particularly strategic. By entering the commercial real estate market as it potentially rebounds from its post-pandemic low, Revolut positions itself to capitalize on the recovery while potentially offering more competitive and technologically advanced lending solutions than traditional banks. The initiative could therefore also herald a new era in commercial real estate lending, where digital-first institutions leverage their technological capabilities to streamline the traditionally complex and time-consuming commercial lending process. This could effectively lead to more efficient underwriting processes, better risk assessment through data analytics, and more flexible lending terms. Looking ahead, it will be interesting to see whether this move will prompt other major FinTech players (i.e. Monzo or N26?) to consider similar expansions into commercial lending. The commercial real estate sector, which has historically been dominated by traditional banks, could see increased competition and innovation as technology-driven lenders enter the market.
Digital banking pioneer Nubank hits 10 million customer milestone in Mexico ๐ฒ๐ฝ๐ฆ
The news ๐๏ธ Banking giant Nubank NU 0.00%โ has achieved a significant milestone in Mexico, reaching 10 million customers just five years after entering the market.
This achievement represents a doubling of its customer base over the previous 12 months and now serves approximately 12% of Mexico's adult population. Solid ๐
Letโs take a quick look at this.
More on this ๐ The digital bank's expansion in Mexico exemplifies its successful strategy of combining technological innovation with financial inclusion. Starting with a credit card offering in 2019, Nu has systematically expanded its product portfolio to include savings accounts with their distinctive "Cajitas" (Money Boxes) feature, debit cards, and personal loans.
This comprehensive approach has yielded impressive results, with the company accumulating $3.8 billion in deposits by Q3 2024. Not too shabby!
Nu's digital-first model has enabled unprecedented market penetration, reaching over 98% of Mexican municipalities, including traditionally underserved areas without conventional bank branches. Recognizing the cash-dependent nature of the Mexican market, Nu has adapted its strategy by building a network of over 30,000 physical contact points, notably through a partnership with OXXO retail stores for cash deposits and withdrawals.
The company's impact on financial inclusion is particularly noteworthy in a country where 42% of the population lacks access to financial services. Nu has enabled first-time access to credit for approximately 50% of its customers, while 63% are earning yields on their savings for the first time.
This is FinTech at its finest ๐
โ๏ธ THE TAKEAWAY
Whatโs next? ๐ค First and foremost, Nu's rapid growth demonstrates the viability of digital-first banking models in markets traditionally dominated by conventional banks. This success is likely only to accelerate digital transformation across the financial sector. More importantly, with a $1.4 billion investment in Mexico and strong customer adoption, Nu has established a replicable model for other markets in Latin America. This could thus drive similar expansion efforts in other countries with large unbanked populations. Looking ahead, Nu is well-positioned to continue its growth trajectory. The pending banking license will enable expansion into new services like payroll accounts and additional credit options. Most importantly, the company's success in Mexico could serve as a blueprint for digital banking expansion throughout Latin America, potentially reshaping the region's financial services landscape. Bullish ๐ค
ICYMI: Latin America's digital banking dragon Nubank breathes fire with 30% ROE ๐ค๐ง๐ท [breaking down their latest impressive Q3 2024 financials, what they mean & whatโs ahead for NU + some bonus reads inside]
๐ What else Iโm watching
Robinhood Crypto Launches in Spain as Part of European Expansion ๐ช๐ธ Robinhood HOOD 0.00%โ has announced the launch of its trading application in Spain, marking its latest expansion in Europe following the implementation of the EU's Markets in Crypto-Assets regulations. The commission-free trading platform first entered the European market in late 2023 and has since gradually introduced localized versions of its app in countries like Italy, Poland, and Lithuania. Robinhood aims to meet the evolving needs of its clients while ensuring regulatory compliance. The company also plans to offer cryptocurrency futures in the US and Europe after completing its $200 million acquisition of Bitstamp, expected in the first half of 2025.
Pleo Enters Treasury Space with New Cash Management Offering ๐ฆ Pleo, a spend management platform, is expanding into the treasury space with a new cash management offering aimed at helping UK businesses navigate the challenging economic landscape of 2025. A survey of 500 UK finance professionals revealed that 56% expect 2025 to be tougher than 2024, and 37% lack confidence in their businessโs financial agility. The economic uncertainty has increased the importance of stress-testing financial health and making quick financial decisions. However, many finance leaders are burdened by time-consuming manual treasury tasks, wasting an average of 163 working days a year. Pleo's new suite of treasury tools aims to address these challenges by providing a consolidated overview of funds, multi-currency accounts, FX trades, automation for cash management, and more.
CFPB Fines Wise $2.5 Million for Misleading Customers ๐ธ The Consumer Financial Protection Bureau (CFPB) has fined money transfer platform Wise $2.5M for misleading customers about fees and charges. The CFPB alleges that Wise illegally advertised inaccurate fees and failed to properly disclose exchange rates and other costs. The company misled U.S. customers by promoting lower ATM fees, free withdrawals, and other perks that did not apply to them. Additionally, Wise did not disclose accurate fees for credit card funding through Apple Pay or Google Pay, failed to properly disclose exchange rates, and did not refund fees when funds were unavailable by the promised date. The CFPB has ordered Wise to pay $450,000 to affected customers and $2.025 million to the regulator's victims relief fund.
๐ธ Following the Money
NatWest Group has made a minority investment in Serene, an early-stage AI platform dedicated to tackling financial vulnerability.
Irish fintech Swoop has secured a $6M investment from Sandbox Industries to fund its expansion in the US market.
French banking-as-a-service platform Swan has raised a further โฌ44M to support its EU expansion and product diversity strategy.
๐ Thatโs 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:
This is great and timely - thank you.