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BFD Expert Voices - Private Credit

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Banking and corporate cards have become big business for startups and small businesses — with companies like Ramp, Brex, and Airbase all raising gobs of cash — but few (good) options exist for solopreneurs and businesses of one.

Driving the news: Found, a startup offering "full-stack" financial services for self-employed workers, raised $60 million in Series B funding led by Founders Fund, the company exclusively tells Ryan.

About 60 million Americans are self-employed, and that group is predicted to make up the majority of U.S. workers by 2027. 

They shell out a ton for accountants, bookkeepers, and lawyers.

How it works: Found provides a business bank account and debit card that helps freelancers and contractors keep track of their payments, invoices, expenses, and taxes all in one place.

Users have payments sent to their Found bank account, which calculates tax withholdings and sets the correct amount aside. They then use the Found debit card to pay for expenses, which are automatically deducted when applicable. 

Found users also can create invoices through its mobile or desktop apps and have payments sent directly to their accounts.

The underlying software is free, with Found making money off interchange fees from debit card transactions.

Between the lines: Found founder (*ahem*) and CEO Lauren Myrick was an accountant before joining Square and becoming its second product manager, working on point-of-sale and SaaS offerings. 

That's where she met Keith Rabois, now a Founders Fund partner and a new member of Found's board.

Rabois called Myrick "one of the most instrumental people" in driving Square's success, and says he would have invested in the Series A if the company hadn't chosen to work with Sequoia Capital.

Myrick says she's "really excited to work with Keith again. I've always been impressed with the type of business builder he is, and how he can come in and really change the trajectory of a startup with his insights."

Of note: In addition to Founders Fund, Sequoia and Lightspeed also participated in the round.

Editor’s note: This story has been corrected to note that Myrick joined Found as it second product manager, not its second project manager.

1 big thing: Founders Fund funds Found

Illustration of a vintage cash register with an extra large display showing a dollar sign.

Stablecoin issuer Circle struck a revised SPAC merger agreement with Concord Acquisition Corp. (NYSE: CND), raising its valuation to $9 billion from the $4.5 billion last July.

Why it matters: This is the rare piece of positive SPAC news, following a spate of merger terminations.

Much of the SPAC slide has been due post-merger performance, particularly in the fintech sector.

According to research last month from SPAC Insider, fintechs going public via a SPAC in 2021 had lost an average of 40% in value since the day of their first trade.

Inside the numbers: Circle, the principal operator of dollar-based stablecoin USDC, is an exception to the rule because of its growth.

According to Circle, USDC’s circulation has grown to $52.5 billion — more than double what it was when the original deal was announced. It has also aggressively amped up its 2023 expectations.

The original deal's $415 million PIPE agreement, which included Dan Loeb's Third Point, Fidelity, and Cathie Woods' Ark Investment, was terminated. No new PIPE investors were named, although the new deal lets Circle raise upwards of $750 million, and Ark on Tuesday disclosed the purchase of 278,000 in new Concord SPAC shares (12% stake).

Yes, but: Circle appears to have missed prior 2021 revenue/interest income estimates. That figure was approximately $85 million in its presentation accompanying the news Thursday, compared to $115 million from over the summer. 

Of note: Circle says the previous agreement could not be completed by the termination date of April 3, 2022, "for a variety of reasons outside of the parties’ control."

The new agreement gives both parties an uncommonly large amount of breathing room, with an initial outside date of Dec. 8, 2022, that could be extended to Jan. 31, 2023, under certain circumstances. 

Of course, everything crypto-related takes longer with regulators, particularly as Circle has received an investigative subpoena from the SEC.

2. The BFD: Circling back on a SPAC

Illustration of bank checks arranged to form the Buzzfeed logo shape

Sequoia Capital today launched its first-ever fund focused on a specific sector, and the target is crypto tokens. 

By the numbers: The Silicon Valley firm plans to raise between $500 million and $600 million for the effort. 

What they're saying: "We could buy these out of our seed or venture or growth funds and be mostly passive, and have done some of that, but it's not really what LPs or the crypto community wants," Sequoia's Alfred Lin tells Axios' Dan Primack. "This fund will let us manage these tokens differently, from staking to voting rights and having a say on governance."

Context: Sequoia has made a gradual entry into the space, investing in specialized funds such as Paradigm and Polychain Capital early on. But its reputation in the broader startup world didn't always translate to crypto because it lacked big, direct investments. 

That's been changing, with bets including FTX and token investments like Parallel. Lin says around 20% of investments last year were in crypto companies, and the new fund will certainly improve its positioning.

Bottom line: This is a bet not just on crypto but on the models of business coming out of crypto.

3. Sequoia Capital's crypto fund

Illustration of a pattern of tree rings with the center ring as a dollar bill sign. 

Berkshire Hathaway's Charlie Munger woke up yesterday and chose violence during a Yahoo! Finance interview. 

A longtime critic of the crypto world, he turned on the heat, saying crypto "is like some venereal disease. I just regard it as below contempt."

When asked about the speculative stock frenzy largely attributed to the Robinhood crowd, he added, "We know it isn't good for our republic."

Predictably, the crypto crowd was not exactly pleased. 

4. Charlie vs. crypto

Warren Buffett, left, and Charlie Munger. Photo: Johannes Eisele/AFP via Getty Images

Eighteen crypto players seek to make a new Swift (Protocol)

To comply with anti-money laundering rules while maintaining privacy, major crypto asset exchanges are part of a new association aimed at keeping customer data encrypted and hashed when shared.

Amid reports that Russia is looking to invade Ukraine, several government websites and banking systems were temporarily out of service Tuesday. It's unclear what caused the outage.

Companies spend over 2% on payments (PYMNTS)

Businesses spend an average of 2% of their sales annually on payment operations and 0.8% on payment processing, per a PYMNTS and Deluxe study.

Shopify is the latest pandemic darling to suffer post-COVID blues. Shares were down nearly 20% after the company forecast sluggish growth for 2022 due to slowing e-commerce sales.

Our question: Could weaker e-commerce growth have ripple effects through the online payments space?

5. Credit score

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

• ShopBack, a Singapore-based online shopping rewards and cash back company, is seeking to raise $150m funding round that would value it around $1 billion, per Bloomberg. axios.link/eQyc

• Check, a digital payroll startup, raised $75m in a funding round led by Stripe, with participation from Bedrock, Thrive Capital and Index Ventures. axios.link/lRJU

• Ageras Group, a financial services company for SMBs, raised €30m from Centripetal Capital, Saeid Esmaeilzadeh, Investcorp Technology Partners, Lugard Road Capital and Roosgruppen. http://axios.link/lNDS

• Nomad, a “guaranteed rent” marketplace for small landlords, raised $20m in Series A funding. SVB led, and was joined by Kickstart Fund, Peterson Ventures and Range Ventures. http://axios.link/vcn6 

• Flow, an SF-based provider of private fund formation and management software, raised $20m in Series A funding. SVB led, and was joined by Frontier Ventures, GFR Fund, HOF Capital, L’Attitude Ventures, WOCstar Fund and Mantis VC. http://axios.link/CgK8

• Paywallet, a Jacksonville, Fla.-based payroll verification and remittance company, raised $8.8m in Series A funding. Pasaca Capital led and was joined by AruVista Capital, and Arcadia Funds. http://axios.link/Tc5F

• Multis, a French company offering crypto management software, raised $7m in funding. Sequoia Capital led and was joined by Long Journey Ventures, Sound Ventures, and MakerDAO. http://axios.link/LPLT

• Voila, a social commerce infrastructure startup, raised $6m in Series A funding. Sinovation Ventures led, and was joined by Fosun Rz Capital. http://axios.link/qcPT 

• Mezubo, a Bogotá-based used car financing platform, raised $5.5m from Canary and DILA Capital. www.mezubo.com 

• Earnipay, a Nigerian earned wage access startup, raised $4m in seed funding. Canaan Partners led, and was joined by XYZ VC, Village Global, Musha Ventures, Voltron Capital and Ventures Platform. http://axios.link/mWcZ 

• Employment Hero, an Australian human resources and payroll company, raised AUD$181m ($129m) valuing it at about $1.3b ($890m). Seek Investments led and was joined by OneVentures, AirTree Ventures and other shareholders. It also acquired KeyPay, a workforce management and payroll platform. axios.link/9Kxv

• Wellstreet, a Swedish venture capital firm, launched a new, $40m fintech fund. http://axios.link/urnZ

6. Deals of the day

• Nyca Partners promoted Stephanie Khoo to partner and added Jasleen Kaur as a principal. http://axios.link/946r

• Bank of New York Mellon hired JPMorgan Chase's Jennifer Barker as CEO of its treasury services business. http://axios.link/lhTe

• Uphold appointed Simon McLoughlin as its CEO. uphold.com/en-us

• Revolut appointed Ibrahim “Ibo” Dusi as its chief risk officer for the Americas. www.revolut.com

• Blink, a Jordanian challenger bank, appointed Zein Malhas as CEO. She previously was chief digital officer at Capital Bank of Jordan. http://axios.link/opRP

• HYPR named former Goldman Sachs exec Michele Docharty to its board. http://axios.link/rUkj

7. It's personnel

8. Memes and mumbles

🚨 Situational awareness: Amazon ended its spat with Visa, striking a global deal and ending surcharges it imposed on Visa credit card purchases in Singapore and Australia.

February 17, 2022

1 big thing: Founders Fund funds Found