{"id":619998,"date":"2023-03-20T09:49:45","date_gmt":"2023-03-20T14:49:45","guid":{"rendered":"https:\/\/news.sellorbuyhomefast.com\/index.php\/2023\/03\/20\/silicon-valley-banks-crash-is-providing-valuable-lessons-all-over-the-world\/"},"modified":"2023-03-20T09:49:45","modified_gmt":"2023-03-20T14:49:45","slug":"silicon-valley-banks-crash-is-providing-valuable-lessons-all-over-the-world","status":"publish","type":"post","link":"https:\/\/newsycanuse.com\/index.php\/2023\/03\/20\/silicon-valley-banks-crash-is-providing-valuable-lessons-all-over-the-world\/","title":{"rendered":"Silicon Valley Bank\u2019s crash is providing valuable lessons all over the world"},"content":{"rendered":"
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Welcome to <\/em>The Interchange<\/em><\/a>! If you received this in your inbox, thank you for signing up and your vote of confidence. If you\u2019re reading this as a post on our site, sign up <\/em>here<\/em><\/a> so you can receive it directly in the future. <\/em>Mary Ann<\/em><\/a> is on a much deserved break this week, so I am filling in for her, bringing you the hottest fintech news of the previous week. Now let\u2019s dive into the fintech news because you are probably wondering what\u2019s up with your favorite bank, and I promise to get to that first. Let\u2019s go! \u2014 <\/em>Christine<\/em><\/a><\/p>\n

We\u2019ve learned a lot more about the Silicon Valley Bank collapse<\/a> since the last time you read this newsletter (lots<\/a> and lots<\/a>).<\/p>\n

The latest being that SVB Financial filed for Chapter 11<\/a>. And First Republic Bank, which was ensnared in all this mess<\/a> earlier this week, found some saviors in the way of some of the nation\u2019s largest banks that reportedly came together to bolster the bank with around $30 billion in rescue deposits<\/a>.<\/p>\n

This week, some of my colleagues took a deep dive into the effects on consumers, businesses, banks, investors, and so on \u2014 all over the world \u2014 who had made deposits with SVB. If anything, it shows just how connected the startup ecosystem really is.<\/p>\n

Annie Njanja and Tage Kene-Okafor got the scoop on African companies affected by the SVB collapse.<\/a> For example, they spoke to Nala, a mobile money transfer startup, which was able to pull its funds out of SVB before it collapsed. In contrast, Chipper Cash was among several startups that could not access a portion of their funds at the time.<\/p>\n

They noted how prolific SVB was in the startup ecosystem when it came to companies opening SVB bank accounts, especially those who were part of a U.S. accelerator program, even explaining how difficult that process was when potential account holders didn\u2019t have a Social Security number or established U.S. address. They also wrote that this type of incident, along with existing high-risk banking options, \u201chave reinforced the need to build homegrown solutions\u201d in Africa.<\/p>\n

\u201cIf you want U.S.-based banking, which does instill credibility (still) with investors, those are your options,\u201d said Stephen Deng, co-founder and general partner at Africa-focused early-stage VC firm DFS Lab. \u201cI think what changes is that founders must know how they manage counterparty risk. Sweep networks, and treasury management, are all top of mind.\u201d<\/p>\n

Meanwhile, Brian Heater reached out to founders and investors in the robotics sector, typically a capital-intensive industry, about what the fallout could mean for them in terms of access to future capital and continuing to diversify sources of funding.<\/p>\n

An interesting comment came from Peter Barrett at Playground Global, who said, \u201cIf SVB rises from the ashes \u2014 and we act to mitigate the weaponization of concentrated digital media \u2014 money may not become impossibly expensive for capital intensive technologies like robotics. On the other hand, now that we have motor memory for bank runs, things could get messy. How best would an adversary attack innovation in robotics? We saw how destructive a handful of influential tweets and emails could be in unwinding a valued and respected 40-year-old institution. Why bother with a cyberattack when a few well-placed uppercased words from apparently reputable sources can wound thousands of our most innovative companies?\u201d<\/p>\n

Indeed. As you can imagine, all of this is continuing to develop, so stay tuned for more.<\/p>\n

Moving on, we are constantly told to diversify our holdings in the financial world \u2014 have money in a number of different mutual funds or have some money in checking and other money in savings. Over in TechCrunch+, all of this SVB business got Natasha Mascarenhas thinking about how to do this.<\/p>\n

She spoke with some founders and investors about the concept of \u201csingle points of failure<\/a>.\u201d Specifically, where else a business can diversify \u2014 for example, founding team and succession plans \u2014 to make sure it doesn\u2019t have its eggs all in one basket.<\/p>\n

Before I get into more news, I wanted to mention that while people have been pulling money out of SVB, there are some still supporting the bank. For example, Brex announced that it was depositing $200 million of its money into SVB <\/a>\u2014\u00a0pulling it from other big banks to do so. CNN also reported on others<\/a>.<\/p>\n

Weekly News<\/h2>\n

Some companies that provide banking services to startups stepped up following the Silicon Valley Bank collapse to offer their services and help companies maintain cash flow. Mary Ann reported on a few companies, like Rho<\/strong>, that saw a surge in new customers, including Mercury<\/strong>, which moved quickly over the weekend to launch a new product called Mercury Vault<\/a>. This product\u00a0\u201coffers customers expanded FDIC insurance of up to $3 million via a new product in the wake of Silicon Valley Bank\u2019s collapse<\/a>. That\u2019s 12x the industry standard for institutions of $250,000 in FDIC insurance that other institutions offer.\u201d Then Friday, the company upped that, announcing on Twitter<\/a> that \u201cby Monday, Mercury customers will have access to up to $5M in FDIC Insurance \u2014 20x the per bank limit.\u201d<\/p>\n

\n
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It\u2019s official: by Monday, Mercury customers will have access to up to $5M in FDIC Insurance \u2013 20x the per bank limit.<\/p>\n

Learn more: https:\/\/t.co\/0YSRB0AOX6<\/a><\/p>\n

\u2014 Mercury (@mercury) March 17, 2023<\/a><\/p>\n<\/blockquote>\n<\/div>\n

Stripe<\/strong> was quite active this week. I updated an earlier story Mary Ann worked on about Stripe going after additional funding. At the time, it was expected it would bring in about $2 billion, but instead, Stripe ended up with $6.5 billion<\/a>\u00a0but at a reduced valuation of $50 billion. The Series I proceeds will go to \u201cprovide liquidity to current and former employees and address employee withholding tax obligations related to equity awards, resulting in the retirement of Stripe shares that will offset the issuance of new shares to Series I investors.\u201d Also, Stripe was chosen to work with OpenAI<\/a> to monetize ChatGPT and DALL-E.<\/p>\n

Reports Manish Singh: \u201cPhonePe<\/strong> has raised another $200 million<\/a> as part of an ongoing round, a move that has now helped it pull $650 million in recent weeks<\/a> despite the market slump as the Indian fintech giant bulks up its war chest following its recent separation from parent firm Flipkart<\/a>. Walmart<\/strong>, which owns the majority of PhonePe, has invested $200 million into the startup. The ongoing round values the Bengaluru-headquartered company at $12 billion pre-money. The startup has said that it plans to raise up to $1 billion as part of the ongoing round.\u201d<\/p>\n

Reports Natasha Mascarenhas: \u201cFounders are still shaking off the dust<\/a> a week after Silicon Valley Bank\u2019s collapse<\/a>. Rumors are swirling<\/a> about who might be looking to buy the beleaguered bank\u2019s assets. Some of the top firms urged their portfolio managers to diversify their assets<\/a> as the bank was collapsing, and are continuing to do so, even though regulators have stepped in to guarantee that all depositors would get access to their stored cash. While diversifying assets feels obvious in retrospect, actually following that bit of advice is harder than it seems.\u201d<\/p>\n

According to Sift<\/strong>\u2019s Q1 2023 Digital Trust & Safety Index<\/a>, buy now, pay later (BNPL) companies saw payment fraud increase by a whopping 211% in 2022 over 2021. The report looked at over 34,000 sites and apps and highlighted some specific scams that fraudsters are using to steal from BPNL companies and merchants. For example, Telegram is one platform where Sift said \u201crapid proliferation of scammers advertise the services they could provide with stolen information,\u201d including fake credit cards and sale of compromised email credentials. In one scheme, Sift observed a fraudster posting \u201cunlimited access\u201d to an account on three of the top BNPL providers for just $35.<\/p>\n

Adyen<\/strong>, providing end-to-end payment capabilities, said it further advanced its digital authentication solution<\/a>, combining security and seamless checkout experiences for it customers. In testing, Adyen was able to authenticate the consumer on behalf of the issuer, while they remained on the merchant checkout page, helping merchants get a conversion uplift of up to 7%.<\/p>\n

Funding and M&A<\/h2>\n

Seen on TechCrunch<\/em><\/p>\n

Wingspan raises $14M for its all-in-one payroll platform for contractors<\/a><\/p>\n

Here\u2019s a new corporate card startup, backed by $157M in equity, debt, going after Brex, Ramp<\/a><\/p>\n

Metaverse payment platform Tilia gets strategic investment from J.P. Morgan<\/a><\/p>\n

Indonesia\u2019s Broom builds out automated asset-backed lending for used car dealers<\/a><\/p>\n

Nigerian credit-led fintech FairMoney acquires PayForce in retail-merchant banking play<\/a><\/p>\n

And elsewhere<\/em><\/p>\n

Masttro secures $43 million growth equity investment led by FTV Capital<\/a><\/p>\n

Cover Genius, an insurtech for embedded protection, acquires Clyde<\/a><\/p>\n

Greek fintech Natech grabs \u20ac10M in convertible bond to expand<\/a><\/p>\n

Payments infrastructure startup Payabli closes $12M<\/a><\/p>\n

Apexx Global, a payments orchestration startup, raised $25M<\/a><\/p>\n

Chile-based recurring payments company Toku raises $7.15M<\/a><\/p>\n

That\u2019s it for now. I hope you enjoyed my takeover of Mary Ann\u2019s column. Don\u2019t worry, she will be back for the March 26 edition! Have a great week, Christine<\/p>\n

\"Read<\/a><\/p>\n<\/p><\/div>\n

Read More<\/a>
\n Christine Hall<\/p>\n","protected":false},"excerpt":{"rendered":"

Welcome to The Interchange! If you received this in your inbox, thank you for signing up and your vote of confidence. If you\u2019re reading this as a post on our site, sign up here so you can receive it directly in the future. Mary Ann is on a much deserved break this week, so I<\/p>\n","protected":false},"author":1,"featured_media":619999,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[393,46,394],"tags":[],"class_list":["post-619998","post","type-post","status-publish","format-standard","has-post-thumbnail","category-silicon","category-technology","category-valley"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/619998","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/comments?post=619998"}],"version-history":[{"count":0,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/619998\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media\/619999"}],"wp:attachment":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media?parent=619998"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/categories?post=619998"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/tags?post=619998"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}