Chrispy & Aditya's Newsletter - Fintech 1.0

We're back to help you navigate the post CoVID job market in technology companies.

Hola!

We hope you guys are safe and are having a great weekend wherever you are. We need some help - we call this ‘Chrispy and Aditya’s newsletter’ because, well, we weren’t sure of what this newsletter was going to be back then. We’re thinking of giving it a proper name so if you have any suggestions send ’em in.

Now, onto this weeks topic, FinTech.

First as always a quiz: Which of these is not a real headline?

1. ‘Infinite leverage’ — some Robinhood users have been trading with unlimited borrowed money

2. Citigroup accidentally wired $900m of its own money to creditors of Revlon

3. US FED’s real time payment service faces outage resulting in payment delays to millions.

4. Launched: The World's First Ethereum Game in which users can collect and breed digital cats called CryptoKitties

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So, what’s happening?

Fin-tech is the hottest thing on the block - since 2016 FinTech companies have attracted $100B+ in investment for startups. There were a flurry of exits recently like Intuit’s $7.1B acquisition of CreditKarma, Visa’s $5.1B acquisition of Plaid and Ant Groups upcoming $200B+ IPO. There are more FinTech startups being created every day - 13% of Y Combinators 2020 batch were FinTech. Big Tech is getting into the game as well - Facebook made an ill-fated attempt to launch a cryptocurrency, Amazon is chipping away at financial services from everywhere, Google is launching savings and checking accounts and of course Apple made this 😍

FinTech is so vast that it can be confusing to navigate. Here we will break down some of the major trends and the technologies driving those changes.

A little history lesson first. The core competency of most Banks is regulatory management and compliance which they used to vertically integrate across the financial value chain. This lead to large behemoth banks who did everything, had terrible customer service, were expensive and non-inclusive. FinTech companies are unbundling financial value chains and are creating horizontally integrated companies.

Banking Infrastructure: These companies enable other companies to build financial products for customers. Their main customers are other developers.

• Data aggregation: Plaid and Finicity use APIs to securely connect user financial information to apps.

• Banking-as-a-Service: Cambr, Solarisbank and BBVA use their banking license to help you build your own banking product. Startups can focus on building their product while these services help with about compliance.

• Anti Money Laundering (AML): Beam uses AI to help developers monitor transactions.

• Know Your Customer (KYC): Jumio uses Computer Vision and ML to verify identities.

Payments: Payments sounds simple because we equate them to a physical transaction - I give you an apple, you give me $2. But with digital transactions you have an intricate system with two banks (issuing and receiving), credit card association (e.g. Visa or mastercard) the payment gateway and payment processor. All of whom are trying to verify that the merchant exists and you have the money to pay them. Payments companies have been around for a while - Stripe is worth $36B and does pretty much everything. Other more specialized companies are/;

• Marqueta enables quick transactions by streamlining and improving the security around each transaction.

• Adyen helps companies accept payments from any platform online and Dwolla helps companies move money through APIs

• Chargify, Chargebee and Recurly help businesess easily charge subscriptions.

• Transferwise does cross-border payments with low transaction costs.

Customer-facing: These are the companies we’ll be most familiar with because we interact with them on a day to day. They include:

• Neo-banks like Revolut, Monzo and N26 who make it easy and efficient to create and manage your money.

• Investment Management platforms like Robinhood which gives you access to capital markets or Acorns for micro-investments

Credit & Lending: These companies assess whether an individual or a business should be lent money, how much should they be lent and what should be the interest rate.

• Kabbage, October, Konifo and Capital Float provide short term loans to SMEs. Become helps them find their best funding options.

• CreditKarma helps users get credit scores for free and helps banks sell credit cards to them

• For you shopaholics Klarna offers a buy now pay later option where they pay the store and you pay them back in installments.

And, yes, now is when we talk about Crypto. The simple way to understand it is that all the use cases described above can also be done using Crypto by replacing Dollars or Euros with <insert crypto name here>. The more in-depth look we’ll give to you next week in Fintech 2.0 (Crypto) and you can also register for this talk on crypto investing.

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Streaming now -> Every company is a FinTech company

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IE Shoutout

Sprout is A company from IE’s venture lab, Sprout aims to enable frictionless saving and investing for all! (without having to walk into a physical bank with a pile of papers). We spoke to their co-founder Claudio who said their vision is to empower first time investors with the tools and education to make the right decisions for themselves and also that he and his co-founders Federico, Prageet and Antti think this is a massively underserved market. They are launching in Mexico and we’re rooting for them and you call follow them here on Instagram.

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Jobs, Jobs, Jobs

• Remote: https://plaid.com/job/?id=568c7156-ce38-4da6-a876-19a4aa5177dd

• EU & US: https://amazon.jobs/en/teams/payments

• Whatsapp has their payments team based out of London and are hiring for Product Managers

• Global - https://www.revolut.com/en-ES/careers

• Global - https://stripe.com/jobs/search

• Argentina - https://www.uala.com.ar/sumate

• Brazil - https://nubank.com.br/sobre-nos/

• EU & US - https://n26.com/en/careers

• EU & US - https://amazon.jobs/en/teams/payments

• EU & US - https://makers.lemonade.com/

• US - https://www.chime.com/job-openings/

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Social Media Buzz

• Vitalik Buterin is the co-founder of ethereum

• Jan Hammer is a FinTech investor at Index Ventures

• Angela Strange is the FinTech General Partner at a16z

• Chris Gledhill is a FinTech influencer who keeps you up to date on the latest trends

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Answer to the quiz:

1. Yes, Like most Robinhood stories is true.

2. Yes, Citi did wire $900M to hedge funds who are now not giving it back :p. We really, really feel for this guy.

3. No, This isn’t true, because the US doesn’t have a national real time payment service. The Fed is planning to build one by 2023-24.

4. Yes, True. And extremely adorable.

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Take Care.
We love you.