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Stripe swung to a loss on an EBITDA basis last year and burned through $500 million in cash, The Information reported.  

Why it matters: If Stripe's cost-cutting plans don't work, going public and keeping its valuation will be tough, Lucinda writes. 

Driving the news: "Stripe also wasn’t profitable last year on the basis of adjusted earnings before interest, taxes, depreciation and amortization, which also excludes stock-based compensation. The firm lost about $75 million on that basis, down from an adjusted profit of nearly $500 million the previous year," per The Information. 

Stripe peer Adyen, meanwhile, saw its EBITDA grow 16%, to $778 million, last year. 

Stripe's 2022 net revenue was just over $2.8 billion, The Information said. Forbes has reported that Stripe's prior year revenues were around $2.5 billion. 

In total, the company burned $500 million last year, compared with the $150 million it says it had previously burned, according to The Information.  

Stripe declined to comment on the report. 

What we're watching: How Stripe, which is said to be in talks to raise at a $60 billion valuation (down from $95 billion), reins in spending for the rest of 2023.

1 big thing: Stripe's 2022 numbers looking weak

Illustration of a cursor as a stock market line chart

Debtors of bankrupt crypto firm Celsius have agreed in principle to let the company be acquired by investment firm NovaWulf Digital Management, Ryan writes.

Why it's the BFD: The agreement could set a precedent and provide a roadmap for other bankrupt crypto firms.

Driving the news: In a bankruptcy court filing, the debtors put forward a plan to sell Celsius' liquid and illiquid assets to NovaWulf.

NovaWulf agreed to make a direct cash contribution of $45 million to $55 million to a new company that it will manage.

The company will be overseen by a new board of directors and will also file public disclosure documents.

Details: Under the terms of the proposal, the debtors estimate that 85% of Celsius’ customers would recover about 70% of their claims in liquid crypto.

Creditors with less than $5,000 in their lending accounts would get the majority of their funds back in the form of BTC, ETH and USDC. 

Meanwhile, larger creditors will receive tokenized shares in the new firm, which will trade on Figure Technology's Provenance blockchain through a registered broker-dealer.

Yes, but: Though the debtors and NovaWulf have agreed to the deal in principle, the parties still need approval from the bankruptcy court and creditors before moving forward.

Between the lines: The NovaWulf deal came together as part of a marketing process that saw more than 130 parties execute nondisclosure agreements with 40 potential bidders emerging.

Of those, six bids emerged for the retail crypto platform, and another three bids were evaluated for the firm's mining operation before settling on the NovaWulf deal.

The intrigue: In a separate motion, the official committee of Celsius’ unsecured creditors said it was seeking to recover funds from former CEO Alex Mashinsky and other executives who led the company before it entered bankruptcy.

The committee alleges these execs made "negligent, reckless (and sometimes self-interested) investments that caused Celsius to lose more than $1 billion in a single year. "

It also claims their mismanagement "caused Celsius to lose nearly a quarter of a billion dollars because they could not adequately account for the company’s assets and liabilities."

To that end, the reorganization plan includes a litigation trust to prosecute claims against these prospective defendants.

Bankrupt crypto lender Celsius finds a buyer

2. The BFD: Celsius finds a buyer

Illustration of a digital coin rising from the horizon with beams of light around it

FTX negotiates for return of $400M from Modulo Capital (NYT)

The founders of Modulo, which has drawn scrutiny from prosecutors investigating FTX’s implosion, are negotiating the return of the funds with bankruptcy lawyers representing the exchange, said two of the people, who were not authorized to speak publicly.

Warren pledges to reintroduce crypto anti-money laundering bill (The Block)

Sen. Elizabeth Warren (D-Mass.), said she plans to reintroduce legislation with Sen. Roger Marshall (R-Kan.), that would extend anti-money-laundering laws to digital asset wallet providers, miners, validators and other blockchain network participants.

Apple to vet customer spending history for BNPL services (Bloomberg)

Apple is testing an underwriting model in which it evaluates borrowers based on their spending history with the company and which device they own. It will also take whether the user has applied for an Apple credit card and look at other cards linked to the wallet as reference.

3. Credit score

Illustration of a Scrabble board with letter tiles spelling "credit."

• Smile Identity, an African ID verification and KYC compliance startup, raised $20m in Series B funding led by Costanoa Ventures and Norrsken22. ValueStream Ventures, Intercept Ventures, Latitude, Future Africa, 500 Fintech, Commerce Ventures, Courtside Ventures and Two Culture Capital also participated. https://axios.link/3InwNLW

• Naked, a South African insurtech company for cars, homes, and valuables, raised $17m in Series B funding. International Finance Corporation led and was joined by German Development Finance Institution, Yellowwoods, and Hollard. https://axios.link/3S074ME

 • Alongside, a crypto indexing platform, raised $11m in seed funding from a16z. Other investors include Coinbase Ventures, Franklin Templeton Investments, Village Global and Not Boring Capital, as well as angel investors. https://axios.link/3xl9a0h 

• Vaas, a San Francisco-based debt management platform focused on Latin America, raised $5m in seed funding. Andreessen Horowitz led, joined by Nazca, Maya Capital, ClockTower Ventures, Latitud and Marathon Ventures. https://axios.link/3XqGHAx 

• Comun, a New York-based neobank for Latino families, raised a $4.5m seed round led by Costanoa Ventures with participation from South Park Commons and FJ Labs. https://axios.link/3ImYep9

• Infinity Exchange, an Ethereum-based lending and borrowing protocol, received a strategic investment from Nomura crypto subsidiary Laser Digital. https://axios.link/3YwrzmN

• InsuranceDekho, an Indian insurtech focsed on underserved markets, raised $150m in debt and Series A equity led by Goldman Sachs Asset Management and TVS Capital funds. Other investors include Investcorp, Avataar Ventures and LeapFrog Investments. https://axios.link/3I5X002

• Parthenon Capital is acquiring the gaming division of Global Payments (NYSE: GPN) for $415m with plans to turn it into a standalone company called Pavilion Payments. https://axios.link/3YRjw3K

• Bankrupt crypto lender Celsius Network put forward plans for a sale to NovaWulf  Digital Management. https://axios.link/3S7sqYI

• Flyhomes, a Seattle-based proptech and real estate brokerage, acquired Seattle-based host-to-own platform Loftium. Terms were not disclosed. https://axios.link/3XvOZYa

4. Deals!

• Dragonfly Financial Technologies, an online banking software firm acquired by One Equity Partners in September 2022, hired Derly Gutierrez as chief information security officer, Carolina Reddy as chief administration and risk officer, and La Dell Diaz as chief legal officer. https://axios.link/40VzOds

 • Kiavi, a home loan and flipping platform backed by Ribbit, named Arvind Mohan as CEO. He was previously COO. Michael Bourque stepped down from his role. https://axios.link/3k6ryGW

• Magic Eden, an NFT marketplace, has laid off 22 employees. https://axios.link/3InvaxM

 • Nav, a financial health platform for small businesses, named Neha Komma as VP of Product. She was previously product lead and board member of Robinhood Crypto. https://axios.link/3YwLu4X

• Viola FinTech named Noam Inbar as partner. https://axios.link/3RXD6sy

5. It's personnel

Situational awareness: FTX investors including Sequoia Capital, Thoma Bravo and Paradigm have been accused, in a proposed class-action lawsuit, of hyping the crypto exchange.

@Lucinda is doing a lot more in-person meetings and enjoying it.

Thanks to Michael Flaherty and Rob Reinalda for today's edits.

And thanks to you for reading. Please tell your fintech friends about this newsletter. They can sign up here.

February 15, 2023

1 big thing: Stripe's 2022 numbers looking weak