1 big thing: Deel goes on the M&A offensive

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2. The BFD: SumUp's winter war chest

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3. Credit score

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4. Deals of the day

5. It's personnel

6. Memes and mumbles

Situational awareness: On Monday at 4pm ET, our Axios Pro colleague Sarah Pringle will be hosting a conversation on health tech investment trends with General Atlantic healthcare chief Robb Vorhoff. Register here.

Tell your fintech friends, family, crypto pals, and others about this newsletter. They can sign up here.

Fintech Deals

1 big thing: Testing the public market

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2. The BFD: A crypto winner in crypto winter

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3. Voyager discloses 3AC exposure

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4. Credit score

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5. Deals of the day

6. It's personnel

7. Memes and mumbles

Good morning, fintech friends. It's Wednesday.

Tell your fintech friends, family, crypto pals and others about this newsletter. They can sign up here.

1 big thing: FTX looks into the HOOD

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2. The BFD: CoinFLEX's mysterious debtor

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🛒 Situational awareness: You're invited to a live interactive conversation today at 12:45pm ET between Axios Pro's Retail Deals reporters, Jonathan Duskin, CEO of Macellum Capital Management (the activist pressuring Kohl's), and Eva Press, vice president of Meta's global business group.

1 big thing: Everyone's feeling it

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2. The BFD: Three Arrows defaults

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🚨 Situational awareness: After the Supreme Court's decision to strike down the federal constitutional right to abortion, several U.S. big banks are saying they will pay for employees to travel for the procedure.

1 big thing: Insurtech pains and gains

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2. The BFD: Pine Labs gets embedded

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3. Ripple says it'll leave the U.S. if it loses case

Happy Friday, fintech deals readers. We made it!

🚨 Situational awareness: The Harmony Protocol team identified a theft of $100 million on its Horizon bridge, with assets stolen on both the Ethereum and Binance Smart Chains.

According to blockchain analytics firm Elliptic, more than $1 billion has been stolen from cross-chain bridges this year.

SumUp, a London-based maker of point-of-sale payments solutions for small businesses, raised €590 million in equity and debt funding led by Bain Capital Tech Opportunities at an €8 billion valuation.

Why it's the BFD: The deal reflects softening valuations for European fintech companies, given reports from earlier this year that investors were floating a €20 billion mark.

That's indicative of what's happening in the broader fintech market, Michael Schrezenmaier, CEO of Europe at SumUp, says. “Timing is everything," he says. "At our stage, people always compare us to public companies.” 

But it still represents a massive step up for the company, which last raised equity funding at a €400 million valuation in 2017.

“Six months ago, the multiples would have been different. But if you raised at $40 billion last year and now have to raise at $20 billion, that’s a bigger problem,” he added.

Between the lines: Without explicitly naming them, Schrezenmaier is referring to Swedish fintech Klarna — which was once Europe's most valuable startup with a $45 billion valuation but now is said to be seeking new funds at around $15 billion.

State of play: Valuation aside, Schrezenmaier noted the importance of raising now to help the company brave the uncertainty in the market.

“We believe we’re entering a phase of significant economic turbulence," he said. "We felt that in these market conditions where it is very difficult to raise, having a war chest is a huge advantage.”

Details: The round was split evenly between debt and equity. Other investors include BlackRock, btov Partners, Centerbridge, Crestline, Fin Capital and Sentinel Dome Partners.

Schrezenmaier says the company continues to raise debt because, "part of the team is German, and we’re cheap bastards ... [But] a lot of it is due to the strength of the cash flows we’re producing. Debt is very cheap. If we can service the debt, why would we dilute?” 

Last year, it raised €750 million in debt from Goldman Sachs, Temasek, Bain Capital Credit, Crestline, and Oaktree. The company now has just over €1 billion in debt outstanding, Schrezenmaier said.

SumUp raises €590M in debt and equity at €8B valuation

Fintech

SumUp, a London-based maker of point-of-sale payments solutions for small businesses, raised €590 million in equity and debt funding led by Bain Capital Tech Opportunities at an €8 billion valuation.Why it&#x27;s the BFD: The deal reflects softening valuations for European fintech companies, given <a class="gtmContentClick" data-vars-link-text="reports" data-vars-click-url="https://www.bloomberg.com/news/articles/2022-01-26/payments-firm-sumup-said-to-seek-new-funds-at-22-billion-value" data-vars-content-id="0643b844-8aa1-47d6-8409-fcd8590d4d45" data-vars-headline="SumUp raises €590M in debt and equity at €8B valuation" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.bloomberg.com/news/articles/2022-01-26/payments-firm-sumup-said-to-seek-new-funds-at-22-billion-value" target="_blank">reports</a> from earlier this year that investors were floating a €20 billion mark.

Brex, the business banking startup valued by venture capitalists at $12.3 billion, is exiting the small business market, Axios has confirmed.

Why it matters: Corporate card and expense management was once a high-flying part of fintech, but they're not immune to the macro economic slowdown.

Driving the news: Brex sent an email to several SMB customers on Thursday, alerting them that their accounts would be closed in two months due to "a change in how we determine account eligibility."

The company said customers would need to proactively close their accounts, withdraw any funds, and provide updated bank instructions to vendors and other payment recipients before August 15. After that date, they will lose account access.

It also suggested they redeem any available rewards points prior to their account closure.

Flashback: In April, Brex detailed a new suite of tools for larger customers called "Brex Empower," launching with DoorDash as its first enterprise client.

The new product moved Brex away from a revenue stream built off debit interchange and toward a more predictable SaaS business model.

What they're saying: When asked for comment, Brex chief communications officer Karen Tillman sent the following statement: 

"Back in April we launched Empower, and we are now putting the full weight of Brex towards building the best global payments platform for tech startups and larger companies. With this focus, we realized we couldn't do a great job serving the small business community at the same time. This has been an incredibly difficult decision for the team and the founders, but we believe small businesses deserve a partner that is entirely focused on them.

"We know how changes in financial services can be disruptive – especially in a moment like now. We're doing all we can, and working with other financial service providers to make this transition as smooth as possible."

Scoop: Brex exiting SMB market to focus on enterprise customers

"We've made the difficult decision to no longer offer services to the small business market."

Brex, the business banking startup valued by venture capitalists at $12.3 billion, is exiting the small business market, Axios has confirmed.Why it matters: Corporate card and expense management was once a high-flying part of fintech, but they&#x27;re not immune to the macro economic slowdown.

Pine Labs, an Indian e-commerce and payments startup, has acquired embedded finance startup Setu in a cash-and-stock deal worth $70-$75 million, The Economic Times reports.

Why it matters: Pine Labs is expected to be the first Indian fintech to list in the U.S. but may delay plans to go public due to market conditions. In the meantime, its acquisition spree continues.

Between the lines: Pine Labs got its start as a point-of-sale payments processor for merchants but has gradually been expanding its product set through a series of acquisitions.

What it does: Setu offers open APIs across four categories: data, payments, investments, and lending. ​

With the deal, Pine Labs will enter the embedded finance market, which will further diversify its product offerings and potential customer base.

Flashback: The company raised $150 million at a valuation north of $5 billion from Alpha Wave Global in February, and added another $50 million in March.

Over the past year, it has also acquired online payments startup Qfix Infocomm and discovery platform Fave.

Pine Labs acquires embedded finance startup Setu

Pine Labs, an Indian e-commerce and payments startup, has acquired embedded finance startup Setu in a cash-and-stock deal worth $70-$75 million, The Economic Times <a class="gtmContentClick" data-vars-link-text="reports" data-vars-click-url="https://link.axios.com/click/28167696.26/aHR0cHM6Ly9lY29ub21pY3RpbWVzLmluZGlhdGltZXMuY29tL3RlY2gvc3RhcnR1cHMvZGlnaXRhbC1wYXltZW50cy1wcm92aWRlci1waW5lLWxhYnMtYWNxdWlyZXMtYXBpLWluZnJhLWZpcm0tc2V0dS1mb3ItNzAtNzUtbWlsbGlvbi9hcnRpY2xlc2hvdy85MjQwNjgyMC5jbXM_dXRtX3NvdXJjZT1uZXdzbGV0dGVyJnV0bV9tZWRpdW09ZW1haWwmdXRtX2NhbXBhaWduPXNlbmR0b19wcm9uZXdzbGV0dGVydGVzdCZzdHJlYW09dG9w/61b8a591584bc520355bcf4eBc3a5537d" data-vars-content-id="77435528-144f-4d2f-ba32-9e08e7bcd4c7" data-vars-headline="Pine Labs acquires embedded finance startup Setu" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://link.axios.com/click/28167696.26/aHR0cHM6Ly9lY29ub21pY3RpbWVzLmluZGlhdGltZXMuY29tL3RlY2gvc3RhcnR1cHMvZGlnaXRhbC1wYXltZW50cy1wcm92aWRlci1waW5lLWxhYnMtYWNxdWlyZXMtYXBpLWluZnJhLWZpcm0tc2V0dS1mb3ItNzAtNzUtbWlsbGlvbi9hcnRpY2xlc2hvdy85MjQwNjgyMC5jbXM_dXRtX3NvdXJjZT1uZXdzbGV0dGVyJnV0bV9tZWRpdW09ZW1haWwmdXRtX2NhbXBhaWduPXNlbmR0b19wcm9uZXdzbGV0dGVydGVzdCZzdHJlYW09dG9w/61b8a591584bc520355bcf4eBc3a5537d" target="_blank">reports</a>.Why it matters: Pine Labs is expected to be the first Indian fintech to list in the U.S. but may delay plans to go public due to market conditions. In the meantime, its acquisition spree continues.

FalconX, a crypto prime brokerage serving the institutional market, has raised $150 million in Series D funding and more than doubled its valuation from last August.  

Why it matters: The pace of crypto dealmaking may have slowed, but there are still plenty of VC dollars ready to be deployed. 

Details: The round values FalconX at $8 billion — compared to $3.75 billion in its $210 million Series C raise — and was co-led by Singaporean sovereign wealth group GIC and Swiss investment firm B Capital.

Thoma Bravo, Wellington Management, Adams Street and Tiger Global Management also participated.

Context: Cryptocurrency prices are down, layoffs are underway across the industry, and a few bad bets have led some industry participants to liquidate their positions. That's led to an overall slowdown in dealmaking.

Yes, but: There is an extraordinary amount of dry powder yet to be deployed, as crypto firms have raised an unprecedented amount of funds in the past six months.

Quick take: In times of uncertainty, there's a flight to safety. So it's no surprise that a company like FalconX — which serves a more secure, institutional client base — is having investors double down while others are facing down rounds.

FalconX raises $150M at an $8B valuation

GIC, B Capital, Thoma Bravo,  and Wellington are investors

FalconX, a crypto prime brokerage serving the institutional market, has raised $150 million in Series D funding and more than doubled its valuation from last August. Why it matters: The pace of crypto dealmaking may have slowed, but there are still plenty of VC dollars ready to be deployed.

Sam Bankman-Fried is helping to shore up the balance sheets of some of the biggest crypto firms in the world, providing financing to BlockFi and Voyager Digital through his firms FTX and Alameda Research.

Why it matters: The crypto world isn't as decentralized as most would like to believe, as the collapse of Luna helped to bring down Three Arrows Capital, which subsequently led to a liquidity crunch at companies like Celsius and Babel Finance. 

By acting as a white knight, the FTX CEO is seeking to head off any further contagion that could collapse the broader crypto industry.

Details: On Friday, crypto brokerage Voyager Digital (TSX: VOYG) signed a non-binding term sheet with Alameda Research for two revolving lines of credit.

The first is a cash/USDC-based credit facility with an aggregate principal amount of $200 million.

The second credit facility is for 15,000 in bitcoin, worth about $315 million at today's price.

In addition, Voyager said it has more than US$200 million on its balance sheet.

Subsequently, BlockFi announced Tuesday morning that it signed a term sheet with FTX for a $250 million revolving line of credit. 

BlockFi said the credit facility is intended to be contractually subordinate to all client balances and will be used to bolster the company's balance sheet.

Context: The agreements come at a time when crypto lenders Celsius Network and Babel Finance have both suspended customer withdrawals while trying to shore up liquidity.

Flashback: This isn't the first time Bankman-Fried's companies have provided financing to another member of the crypto ecosystem.

Last August, FTX loaned $120 million to Liquid Global after the Japanese crypto exchange lost $90 million in a hack.

FTX later acquired Liquid and all of its subsidiaries in a push to launch licensed operations in Japan.

What they're saying: In an interview with NPR over the weekend, Bankman-Fried said: "I do feel like we have a responsibility to seriously consider stepping in, even if it is at a loss to ourselves, to stem contagion. 

"Even if we weren't the ones who caused it, or weren't involved in it. I think that's what's healthy for the ecosystem, and I want to do what can help it grow and thrive."

FTX CEO Sam Bankman-Fried working to curtail crypto contagion

Sam Bankman-Fried is helping crypto companies to shore up balance sheets

FTX CEO Sam Bankman-Fried. Photo: Sarah Silbiger/Bloomberg via Getty Images

Cryptocurrencies

Sam Bankman-Fried is helping to shore up the balance sheets of some of the biggest crypto firms in the world, providing financing to BlockFi and Voyager Digital through his firms FTX and Alameda Research.Why it matters: The crypto world isn&#x27;t as decentralized as most would like to believe, as the collapse of Luna helped to bring down Three Arrows Capital, which subsequently led to a liquidity crunch at companies like Celsius and Babel Finance.

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Stories

Pine Labs acquires embedded finance startup Setu

SumUp raises €590M in debt and equity at €8B valuation

FalconX raises $150M at an $8B valuation

FTX CEO Sam Bankman-Fried working to curtail crypto contagion

Scoop: Brex exiting SMB market to focus on enterprise customers

Newsletter editions

Fintech: FTX-ing Robinhood

Fintech: What normal?

Fintech: Diagnosing insurtech

Fintech: Let's make a Deel

Fintech: 😱 Going public