Can Fintech Change Campaign Finance?—DriveWealth Raises $54m

And Astra Launches Dev Focused API

Hi y’all, Cokie here.

So tell me… did anyone win at bingo? Tweet me, I wanna know. You remember the rules -- show me your complete bingo card and share the most egregious offense you encountered. Free FTT+ for a literal year! Leggo.

For this week’s newsletter, given our collective anxiety leading up to the election, I thought I’d talk about campaign finance. The word finance is in it, so I figured it was relevant.

Campaign finance has a long history in this country and, as you can imagine, started as a form of bribery before the revolution. “Want to keep your job? Make a donation here!”

Things have obviously changed since then. Notably, The Federal Election Campaign Act (FECA) and The Revenue Act both passed in 1971. FECA essentially demanded that campaigns keep a ledger of contributions, expenditures, and debts. It also provided the legislative framework for the establishment of PACs by unions and *clears throat* corporations. The Revenue Act, on the other hand, allowed citizens to check a box on their taxes to allow the government to use one of their tax dollars to fund presidential elections.

PACs are funded by individuals, using voluntary and publicly reported donations, that spend money to influence the outcome of an election — win or lose. PACs originally were intended to bring together like minded folks, say from a particular industry or practice, to exercise their first amendment rights. Well… in 2011, the landmark Citizens Union case went to the Supreme Court, who decided that corporations and labor unions were uniquely permitted to make unlimited campaign donations.

Oh, and get this, all PACs are required to have visible and transparent donor lists. Nonprofits don’t have the same obligation — meaning corporations can establish a non-profit to distribute campaign funds without any legal obligation to disclose the source of funds.

So, of course, as I’m studying up on campaign finance for this column because I didn’t actually pay very much attention in AP Gov (except on the days we watched The West Wing), I found myself thinking about how fintech changes the game. It’s never been easier to donate. ActBlue, an organization that collects funds for democratic nominees, allows one-click donations in most states and merchant account donations in states which legally demand them. I tried to lift the hood up on ActBlue, but their website suggests only that they “built a powerful online fundraising platform” and does not disclose any partnerships. I find this curious, because ActBlue has one of the most seamless checkouts I’ve ever experienced.

My question is—will fintech make our convoluted and controversial campaign finance regulation even more divisive? Tweet me and let me know what you think.

Anyway, enjoy your late stage capitalism and your weekend. Meditate or something, you’re gonna need it. I’ll see you on the other side.

I let y’all choose the playlist and you were predictably chaotic.

In Sunday’s FTT+ newsletter, Julie is going to be diving into the news that Square is in talks to buy Credit Karma’s tax division. Will this work? Should Square just have bought Credit Karma to begin with? Tune in Sunday.

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The News by Parker Jay-Pachirat

Jack Ma’s Ant Group raises $34b in the world’s largest IPO, bringing the valuation of the company over $310b. Ant is the fintech company affiliated with Chinese e-comm Alibaba, who also went public at a record-setting IPO in 2014. Xiaomeng Lu, the senior geotech analyst at Eurasia Group, said Ant is positioned to benefit from the Chinese government’s latest plans for economic development- being drawn up this week. "Ant is being viewed as this national technology champion — it's investing in AI, it's investing in blockchain," Lu said- which are priorities for Chinese President Xi Jinping. Geopolitical tensions between the US and China were likely a major factor in Ant’s decision to list exchanges in Shanghai and HK rather than Wall Street, following recent threats and restrictions from the US against Chinese tech companies like Huawei, TikTok, and WeChat.

The Justice Department scrutinizes Visa’s plans to acquire Plaid, citing concerns that the acquisition could limit nascent competition in the payment space. On Tuesday, the DOJ filed action against Bain & Co as part of its investigation into Visa’s proposed acquisition of Plaid, accusing Bain of withholding important documents demanded under the CID (civil investigative demand).

Lending and wealth management fintech SoFi launched their first-ever credit card this week, in partnership with Mastercard. The card carries no annual fee, provides up to 2% unlimited cash back when redeemed into SoFi Money or SoFi Invest accounts, or used to pay down SoFi student or personal loans. You can sign up for the waitlist here.

SoFi also got the go to become a national bank, receiving approval for a bank charter on Wednesday from the OCC. To run its operations, SoFi currently licenses a charter from another bank. This model is used by many challenger banks like Chime, but it undercuts profits. With the new charter, SoFi can now receive deposits and make loans autonomously.

Fundraising News

Fintech Wise raised a $12m Series A on Thursday. lead this round alongside Grishin Robotics, with seed investors Base10 Partners and Techstars also participating.Wise offers a unique go-to-market strategy, partnering with companies to offer bank accounts to their customers. For example, if you’re running an e-comm platform or marketplace that matches companies and individual customers, using Wise would allow you to offer bank accounts to your partner companies. I’ve had a look at their product and was absolutely blown away. Well done to this team and look forward to seeing all the embedding!

DriveWealth, a cloud and API based broker, raised a $56.7m Series C. DriveWealth plans to enhance its tech stack and acquire new businesses with the new funding. The round was led by Point72 Ventures, with participation from Raptor Group, SBI Holdings, Route 66 Ventures, LLC, Mouro Capital, and Fidelity International Strategic Ventures.

PrimaryBid raised $50m from the London Stock Exchange group this week. Draper Esprit, OMERS Ventures, Fidelity International Strategic Ventures also participated in the round, amongst others. The tech platform allows everyday investors access to public companies raising capital. With the newly raised funding, PrimaryBid is expected to strengthen its UK team, expand its EU customer base, and pursue relationships with other key market intermediaries.

Rocketset raised a $40m Series B, led by Sequoia and Greylock, pulling their summation of funds raised to $61.5m. Rocketset offers indexing databases to businesses, allowing them to build data applications at a cloud scale. With the new round, Rockset plans to grow its workforce, and strengthen product development, research, and go-to-market strategy.

Tel Aviv SaaS provider Salto raised a $27m series A, led by Bessemer Venture Partners, Lightspeed Venture Partners, and Salesforce Ventures. The fintech provides SaaS solutions businesses configuring applications like Salesforce, HubSpot, Marketo, and others. With this bag secured, Salto aims to launch the enterprise version of its project.

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