The Monday Roundup: what we are watching this week | Oct 25th

By Gaia Lamperti

The Monday Roundup sets the scene for the week’s biggest news stories, industry deals, and upcoming events. For Prime subscribers only.

Neobanks’ eye-popping rounds and IPO plans

Neobank N26 just raised $900 million at a $9 billion valuation, becoming Germany’s second-largest bank. The Series E round was led by Third Point Ventures and Coatue Management with the participation of Dragoneer Investment Group and some of N26’s existing investors. After some trouble with regulators around internal controls, now the Berlin-based challenger bank has a full banking license and the capital to get towards an IPO. Today, N26 boasts 7 million clients across 25 countries.
The View: “Today, we have the most renowned investors in the world supporting our business, and they will be instrumental in accelerating our growth strategy. We are very happy to have them on board.” – N26 Founders in a statement.

Last week, news broke that San Francisco-based digital bank Chime is planning a 2022 IPO at a $35-$45 billion valuation, targeting March 2022 for its debut. If the company hits that target, it will become more valuable than regional banks like Fifth Third, M&T and Regions. As more and more people shifted to online spending during Covid, Chime, just like many other neobanks, saw massive growth. The startup raised $1.1 billion just a couple of months ago at a $25 billion valuation.
The View: “The company’s revenue will likely reach $900 million to $1 billion this year.” – Jeff Jauflin on Forbes.

The crypto roundup

The first-ever Bitcoin ETF (BITO) launched this week, making Bitcoin spiked to a new all-time high. ETFs (exchange-traded funds) have the potential to expose Bitcoin to a much larger market, another huge milestone in the run for Bitcoin to become mainstream. The provider of the Bitcoin ETF, ProShares, said in a statement that the fund will start trading on the New York Stock Exchange, primarily investing in Bitcoin futures contracts and not directly in Bitcoin.
The View: “2021 will be remembered for this milestone. We believe a multitude of investors have been eagerly awaiting the launch of a bitcoin-linked ETF after years of efforts to launch one.” – Michael Sapir, CEO of ProShares.

After two years, Novi, Facebook’s crypto wallet, finally launched. Last week, the company started rolling out the feature in a limited global capacity, in collaboration with crypto platform  Coinbase which will support Novi with the Coinbase Custody feature to keep funds secure via its crypto transactions management software. Having delayed its plans for the Diem stablecoin (formally Libra) the social media giant adopted USDP as the core stablecoin asset for Novi’s launch. Facebook has long showed its ambitions to play a role in crypto. The e-wallet launch could be seen as the first step in that direction.
The View: “Remittances are a critical way to achieve financial inclusion. Today, we’re rolling out a small pilot of the Novi digital wallet app in two countries, the US and Guatemala. People can send and receive money instantly, securely, and with no fees.” – David Marcus, Head of Facebook Financial.

Where’s the buzz

PayPal is in late-stage talks to acquire picture storage and social sharing platform Pinterest, at around $70 per share. The move probably comes from the pressure the payments giant felt from other players, like BNPL companies, that are partnering with e-commerces to increase attractiveness to merchants. As Pinterest users show significant purchase interest (77% of weekly active pinners have discovered a new brand or product on Pinterest and are 7x more likely to purchase a product they have saved), it is clear that PayPal is moving in that direction. Embedding e-commerce offering is considered one of the key steps towards becoming the “Financial Super App” which, it looks like, is the direction where most companies in the space are going.