March 27th: Introducing FTT Watercooler — Acquisitions in Fintech? 

Hey everyone, nice to see y’all for the second time this week! Not much fintech related content today—we’re gonna be talking about Fintech Today stuff!

FTT+ This Week:

Julie VerHage (who joined Fintech Today from Bloomberg earlier this’s our post about it if you missed it) published her first piece for us this week. It’s a great overview on COVID-19’s impact on fintech companies. Julie talks about the potential impact on companies that already sold too, like Plaid and Credit Karma, and then wrote up an anonymous Q&A with industry experts, execs, founders, and VC’s in the fintech space. 

I also wrote about high yield savings accounts and how’ve they been getting hammered recently. Almost all the fintech companies I’ve been tracking—from neobanks like Chime to roboadvisors like Wealthfront and Betterment have been dropping precipitously thanks to the Federal Reserve dropping interest rates. While most fintech companies have been using high yield savings accounts as a way to acquire customers for the past year, but it seems like that strategy is out the window now. Chatting with Gil at Astra the other day seems to imply that my thesis was right—Astra’s has seen a direct correlation between users moving deposits to other accounts after companies have dropped their APY. 

Sign Up For FTT+!

FTT+ is $50/month, but as an introductory price, if you sign up now, you’ll get locked in at $25/month for the first year.

FTT Virtual Events: 

Events were such a fun part of FTT. But just because we’re not allowed to congregate physically doesn’t mean we can’t hang out! We’ve been having some happy hours in the FTT Slack, and I really want to open it up to the FTT community. Fill out the survey below if you want to get involved. The world might be cancelled, but FTT isn’t!

Fill out our virtual events survey here!

FTT Jobs:

In today’s economy, finding jobs seems harder than ever. With companies laying off experienced and talented employees because of market pressure. But companies are still hiring, and we really want to connect talent with great roles.  

We’re exploring ideas around how we can help. If you’re looking for a job or looking to hire, fill out the survey below!

Fill out our jobs survey here!

Sponsorships and Consulting:

We’ve been inundated with sponsorship interest over the past few weeks, and we’re really excited to start working with companies and help them grow and get their messages out to the broader fintech community through Fintech Today. 

We’ve also started incorporating consulting into our sponsorship packages around: product strategy, user research (internal or external), content and social strategy, consumer growth strategy, and custom market research reports. If you’re interested, please reach out to! 

FTT Watercooler: 

The interest in the Slack has been awesome, but unfortunately large Slack groups historically don’t work. 

That’s why we’ve partnered with Comradery to launch FTT Watercooler—a product to foster the FTT+ community. Watercooler is only for premium members that have subscribed to the FTT+ tier or above, and has a number of features that I’m excited about:

Group Chat: The chat feature works a lot like Discord. It’s accessible for anyone in the ecosystem and we can chat about whatever is going on—whether that’s fintech related or otherwise. The #general chat in the FTT Slack has been the most active, so this is just one way to replicate that engagement. 

Channels and Posts: A lot of content gets lost in Slack, because things move so quickly. Users can post topics and content around whatever they want—reports they found, articles they found interesting, random stuff—and people can comment and post about it below. The comparison here is probably close to a custom, fintech-focused Quora. 

It’s won’t just be fintech content though—there will 1000% be a music channel, don’t worry.  

People Directory: For me, the best part about FTT is meeting new people and new companies. I’ve really wanted to replicate that with FTT, through events and such, and I think the Watercooler has a lot of potential to bring a digital layer through that. Not all of us are in the same city—fintech is so spread out between SF, NYC, London, Latin America, and other regions across the world, a digital community makes sense. And for offline events like Money 2020 becoming increasingly overwhelming for people and ticket costs rising dramatically, there needs to be an alternative. When you sign up for Watercooler, you’ll be asked to fill out your profile so people can get in touch with one another and just chat. There’s also a private messaging feature too, so you can connect within Watercooler.

We’re also planning a lot of programming, around monthly AMA’s and such. We’ll be rolling this out slowly, first to the initial FTT+ subscribers and expanding from there. Expect an email from me with details over the next week or so.

FTT+ is $50/month, but as an introductory price, if you sign up now, you’ll get locked in at $25/month for the first year.

Sign Up For FTT+ Today!

Story of the Week:

The news about Brex earlier this week was intriguing to me—TechCrunch reported that three companies, and a total of 12 employees, were joining Brex: Neji, Compose Labs, and Landria. 

All three companies will be amplifying Brex’s product in some regard. Neji, which focuses on securing customer data, will be focused on Brex Cash. Compose Labs, which be helping “grab data and analytics from Brex’s e-commerce credit card,” according to Techcrunch. Data can impact the underwriting process for this card, and CEO Henrique Dubugras told TechCrunch the e-commerce card has been a “fast growing vertical.” Landria helps companies manage their SaaS tools and will help Brex make sure transaction data is accurate for customers. 

Frankly, the acquhire’s aren’t that interesting—they seem pretty standard and Henrique told TC that discussions began in the fall and just closed this quarter.

But! It made me wonder whether there might be more acquihires and other small acquisitions in the fintech space by bigger, better capitalized companies, to shore up and hire engineering talent easily. Finding 12 engineers in SF nowadays is an arduous task; if companies can snap up whole teams for cents on the dollar, why not? 

There’s already been a little of this in the broader tech world: OfferUp raised $120 million and bought a competitor, Letgo. From what I’ve heard it wasn’t an ideal exit for Letgo. 

This might apply to later stage companies too—where the macroeconomic enviornment seems to have the biggest impact in terms of private investing. Companies that are well capitalized might look to buy competitors, or bigger institutions might look to buy fintech companies. 

None of this is going to happen tomorrow btw, the macro environment is way too murky, and companies still (hopefully) have runway. But if the downturn continues, especially after COVID-19’s immediate issues are resolved, then we might be M&A activity return to pre-COVID levels later on this year. 

Funding of the Week:

Fast, a universal login and checkout service, has raised $20 million, led by Stripe, with participation from previous investors Index Ventures and Susa Ventures.