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BFD Expert Voices - Private Credit

BFD Expert Voices

Despite investments in a number of noteworthy crypto startups, SoftBank Vision Fund CEO Rajeev Misra says the fund is not investing directly in tokens.

"We took a decision not to invest in tokens. We don't own tokens," Misra told Dan Primack at the Axios Pro Launch event. "We just don't understand them."

Why it matters: In 2021, it's not uncommon to hear mainstream VC firms make bets via the asset class. After all, it can get them into some red hot deals — like that of Solana. 

Sequoia and Andreessen Horowitz both have made token investments in the past, as have Coatue and Tiger Global. Europe-focused Blossom Capital, which is less known for its crypto bets, has also bought tokens.

SoftBank is not alone in staying away from the more nascent form of investing: Despite bets on crypto exchange FTX and digital asset tax company TaxBit, Insight Partners also currently does not invest in tokens, a source with knowledge of the matter tells Lucinda.

Between the lines: Tokens are still a relatively new asset class that passed through regulatory hellfire in 2017 as government agencies, investors, and founders alike sought clarity around how they would be regulated.

While venture investors recently have found more certainty in the space and become more willing to jump in, the slow start provides one reason for some investors to hesitate over betting big on tokens.

In the absence of widespread adoption from other investors with large pools of capital, there's concern over the lack of a robust token marketplace. Without that, funds worry about their ability to exit a large position. It's a bit of a chicken-or-egg type problem.

Not to mention, it is simply a new asset class with very little history for investors to study.

Bottom line: Yes, crypto has hit a whole new level of bullishness, but even now, not everyone is jumping headfirst into every new thing Web3 has to offer.

1 big thing: SoftBank says tokens are a no-go

Fintech giant KakaoPay, valued at $16 billion as a public company in South Korea, lost three of its most senior executives Thursday, including its CEO and CFO, per Bloomberg.

Out of context, that looks like a worrying sign. But investors cheered the move, with shares of the business rising 7%.

Why it matters: KakaoPay is considered the country's largest mobile payments app. Armed with some 2o million monthly active users as of last year, KakaoPay is a subsidiary of Kakao Corp., which operates the country's most popular messaging app.

But, mirroring the U.S. equity markets, shares of KakaoPay have failed to keep investors happy, dipping below their IPO price. Shareholders have also been displeased with the fact that CEO Alex Ryu and other members of management sold shares following the company's IPO in November 2021.

Investors seem to view his resignation, along with that of CFO Kijoo Chang and chief business officer Jin Lee, as the turning over of a new leaf.

What's next: More uncertainty. Ryu had been a candidate for the bigger leagues — to lead Kakao Corp. — until last week, when he withdrew his candidacy.

2. The BFD: Cleaning house at a top payments app

Illustration of a push broom sweeping away a pile of cursors. 

The Federal Reserve just weighed in on the potential for a digital dollar — sort of, Axios' Kate Marino writes.

It finally released a much-delayed paper yesterday, opining on the pros and cons of developing its own central bank digital currency (CBDC) — but didn’t come to any firm conclusions.

Why it matters: Around the world, there are now 23 CBDCs either in the pilot stage or formally launched. They have morphed from a theoretical concept into real-world digital cash, changing the way governments and millions of people use money — but not in the U.S.

Between the lines: Although the Fed's paper doesn't advocate one way or another on whether the U.S. should begin development, the language it used indicates that it’s very open to the idea, Josh Lipsky, director at the Atlantic Council’s GeoEconomics Center, tells Axios.

The big picture: A digital dollar would be legal tender pegged to the value of the physical dollar and backed by the Fed.

Central banks are considering CBDCs in order to retain control over monetary policy in the face of growing cryptocurrency adoption, and because they could make possible more efficient government payments and financial inclusion.

What's next: In the U.S., there's a 120-day comment period on the new paper, after which the Fed may issue a follow-up.

But the ball is effectively in Congress' court: The Fed said unequivocally that it wouldn't move forward on any CBDC development without legislative action granting it authority.

3. The Fed's open to a digital dollar

Robinhood share slide prompts new grants (Blind)

With shares of the stock-trading company about 75% below its high in August, employees who joined the company in July 2021 are underwater on their new hire equity grants, per employee board Blind, citing anonymous Robinhood employees. To balance out the drop in income, Robinhood is issuing shares to help bring employees back up. Robinhood declined to comment.

With Coinbase's help, New York City Mayor Eric Adams takes his first paycheck in bitcoin (nyc.gov)

New York City Mayor Eric Adams has made himself a billboard for attracting crypto and fintech businesses. On Thursday, the politician officially announced that his first paycheck would be converted to bitcoin and ethereum using Coinbase.

Hackers take $34 million from Crypto.com (Crypto.com) 

The cryptocurrency exchange finally acknowledged it had been hacked, noting that 483 were subject to unauthorized withdrawals of over $34 million worth of ether, bitcoin, and other currencies.

4. Credit score

Illustration of scoreboard with a downward line illuminated on one side and an upward line illuminated on the other.

Health tech veteran Dunston Almeida has launched a new company with a “nine-figure” commitment from New Enterprise Associates, Sarah Pringle writes for our sister Axios Pro Health Tech Deals newsletter.

What’s happening: The new company, triValence, is building next-gen infrastructure to automate B2B supply-chain management and payment processes, Almeida tells Sarah.

5. Axios Pro multiverse crossover

Illustration of four and a half out of five red cross symbols shaded in, indicating a positive rating.

Singapore Telecommunications, Southeast Asia's largest telecom firm, and ride-hailing-to-payments firm Grab Holdings Ltd., have each bought a 16.3% stake in PT Bank Fama International to pursue banking opportunities in Indonesia. http://axios.link/hE0x

The Graph Foundation, which operates a protocol for indexing and querying blockchain data, raised $50m in a sale of digital tokens to investors led by Tiger Global Management, along with the FinTech Collective and Fenbushi Capital. http://axios.link/MdjK

Stader Labs, a Singaporean crypto-staking startup, raised $12.5m in funding led by Three Arrows Capital, with participation from Accel, Blockchain.com, Accomplice, GoldenTree Asset Management, Amber, Figment, and others. http://axios.link/gQwO

Vartana, an SF-based B2B BNPL startup, raised $7m in equity financing led by Audacious Ventures and $50m in debt financing from i80 Group. http://axios.link/W5L5

SOMA Finance, a DeFi assets exchange company, raised $6.5m (HKD 50.7m) in seed funding. Mantra Dao and Tritaurian Capital led the round. https://www.soma.finance/

STEPN, an Australian "move-to-earn" startup, has raised $5m in a seed funding round co-led by Sequoia Capital India and Folius Ventures, with Solana Ventures, Alameda Research, 6th Man Ventures, Sfermion, and others participating. http://axios.link/NF2C

01 Exchange, a Solana-based platform for crypto derivatives, raised $2.2m in a seed round led by Multicoin Capital and FTX CEO Sam Bankman-Fried's Alameda Research, with participation from Solana Ventures, Ledger Prime, and others. http://axios.link/WhdO

Core Scientific (NASDAQ: CORZ), North America's largest blockchain mining company, completed its SPAC merger with Power & Digital Infrastructure Acquisition. http://axios.link/eTv4

6. Deals of the day

ABN Amro has hired Jorissa Neutelings as its chief digital officer. http://axios.link/Ikb3

BNPL provider Sunbit named Soo Hong as chief people officer. http://axios.link/oFEo

7. It's personnel

Perhaps we should mint an NFT soon. Just as soon as we get past Step 16 of the very simple process.

8. Memes and mumbles

Happy Friday, Fintech Deals readers! Congrats on making it through the short week.

Situational awareness: If you missed our Axios Pro kickoff event, you can view the replay here. At the event, Ryan interviewed Affirm CEO Max Levchin. The whole thing is worth watching, of course, but here's a quick teaser.

🏈 Ryan expects to watch too much playoff football.

🎪 Lucinda is considering going on a trapeze, despite a raging fear of heights. 

🙏 Thanks for reading Axios Pro Fintech! If you're not a subscriber and you've somehow made it this far, you really should sign up.

January 21, 2022

1 big thing: SoftBank says tokens are a no-go