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BFD Expert Voices - Private Credit

BFD Expert Voices

Stash, an investing app backed by T. Rowe Price and Eldridge, laid off 10% of its workforce as part of a broader reorganization under new CEO Liza Landsman, the company confirms.

Driving the news: Roughly 40 people were laid off from the company last week, marking its third round of layoffs in 12 months, Kia and Lucinda write.

In total, roughly 120 jobs have been cut over the last year. Some 40 or so were laid off in summer 2022, and another 40 positions were eliminated in December.

What they're saying: Even as Stash has cut some staff, it's adding new positions, it says in a statement to Axios.

"We restructured the organization, introduced new teams, and are actively recruiting for different types of expertise," Landsman says in the statement, adding Stash plans to reach profitability in the near future. "This was not a cost-savings measure — the changes are specifically to optimize Stash for scale as we continue to hit major milestones."

The company had 500 employees at its peak. That figure fell to 380 following the reorganization that began May 1, and it rebounded to 395 yesterday. The company plans to hire back to 420 "soon," a spokesperson told Axios.

This most recent layoffs round is the first under Landsman, who took over for co-founder Brandon Kreig in February.

Context: The move comes as stock-trading startups are facing mounting pressure to hit profitability, even as rising interest rates and a return to in-person work cools growth in the space.

Last valued at $1.4 billion in a February 2021 Series G funding round, Stash differentiates itself from competitors like Robinhood by earning most of its revenue from a tiered subscription model rather than from payment for order flow. Robinhood shares are down about 85% since their 2021 peak.

Revenue for Stash rose 30% in 2022 to over $100 million, a spokesperson said.

1 big thing: Stash lays off 10% of workforce

Illustration of a hand holding multiple briefcases. 

Blockchain payments giant Ripple announced it would buy Swiss-based crypto custodian Metaco for $250 million in cash and equity deal, Axios Crypto's Crystal Kim writes.

Why it's the BFD: "This is the first significant acquisition we have ever made," Brad Garlinghouse tells Axios, saying its investment in critical crypto infrastructure, such as custody, dovetails with Ripple's overall strategy in payments.

Zoom out: Ripple serves customers in over 55 countries, with payout capabilities in 70-plus markets.

Total XRP sales by Ripple, net of purchases, were $361 million in the March-end quarter versus $226 million in the prior quarter, according to the company.

Details: Founded in 2015, Metaco primarily provides custodial services to institutions, often going head to head with platforms like Fireblocks.

It has partnered with Citi, Societe Generale and BNP Paribas, and their customers span jurisdictions including Switzerland, Germany, Turkey, France, the U.K., the U.S., Singapore, Australia, Hong Kong and the Philippines.

What we're watching: Ripple's years-long battle with the Securities and Exchange Commission will soon conclude, with the precise timeline up to the courts.

Garlinghouse says he remains optimistic, though it's cost Ripple about $250 million.

The bottom line: Ripple has more money to spend.

"We will still have $1 billion in cash after this deal; that puts us in a position to look at other deals," Garlinghouse said.

2. The BFD: Ripple buying Metaco for $250M

Illustration of an open briefcase full of coins.

Moody's Analytics data show a sizable increase in large fines (defined as those over $10,000) against organizations around the world. From 2018 to April 2023, 60% of organizations were hit with such large fines, while 40% were hit with fines below $10,000.

The growing regulatory scrutiny has helped boost investor interest in compliance tech.

Paris is trying to steal the U.K.'s fintech crown (Bloomberg)

A growing number of startups are getting funding and setting up shop in the French capital amid a governmental push. France bucked the tech downturn last year, with the value of fintech deals there rising 30% to $2.1 billion last year, according to Pitchbook.

3. Credit score

Illustration of a credit score meter with emoji faces showing sad, neutral, and happy emotions.

• Bolttech, a Singapore-based insurtech startup, raised $196m in Series B funding at a $1.6b valuation. Tokio Marine led and was joined by MetLife Next Gen Ventures and Khazanah Nasional. bolttech.io

• Wefox, a German insurtech startup, raised $55m in a Series D extension from existing investors at a $4.5b valuation. It also secured a $55m revolving credit facility from JP Morgan and Barclays. https://axios.link/3WdvQuX

• River, a bitcoin financial services company, raised $35m in Series B funding led by Kingsway Capital. Peter Thiel joined the round. https://axios.link/42Ff75X

• Axis, an Egyptian mobile wallet and digital payments platform, raised $8.25m in seed funding led by Tiger Global, Sawari Ventures and Raba, with participation from Firstminute Capital and RaliCap. https://axios.link/3Mgpzdg

• Vault, a Canadian online banking platform for SMBs in the country, raised $5m in seed funding. Gradient Ventures and Fin Capital led and were joined by The Fintech Fund, Exponent Capital and Thirdbase Capital. https://axios.link/3o4mmFC

• Jia, a blockchain-based SME financing firm for emerging markets, raised $4.3m in seed funding led by TCG Crypto, with participation from a number of funds including BlockTower, Hashed Emergent, Saison Capital and Global Coin Research. https://axios.link/3W99IBZ

• Orange Logic, an Irvine, California-based provider of digital asset management software, raised funding from Bregal Sagemount. www.orangelogic.com

• Papirfly, a Norwegian portfolio company of Verdane, acquired Keepeek, a French digital asset management firm. www.papirfly.group

• Fintech Ecosystem, a SPAC, has terminated its merger with Rana Financial, a payments company valued at $78m in the deal. https://axios.link/42WsHlX

• Blackstone is part of an investor group seeking to sell another $2.4b stake in London Stock Exchange Group (LSE: LSEG). Other sellers are Thomson Reuters, CPPIB and GIC. https://axios.link/42HpCpC

• PayPal is seeking a buyer for Xoom, the international money transfer service it bought for roughly $1 billion in 2015, per The Information. https://axios.link/42JyH1a

• Fabrick, an Italian open finance startup, acquired U.K.-based payments firm Judopay. https://axios.link/41OoSxA

4. Deals!

• EedenBull, a Norwegian B2B payments firm, hired Eilin Schjetne as its new CEO. She succeeds founder and former CEO Nicki Bisgaard, who will act as a special advisor. https://axios.link/433gI5r

• Copper.co, a digital asset infrastructure startup, appointed Stephen Strickland as chief compliance officer and Jim Turley as a non-executive director. https://axios.link/456CGGF

5. It's personnel

6. One fun thing

PayPal went from the 17th largest company by market cap in July 2021 ($354.5B) to the 208th today at $70.76B.

Situational awareness: Senators are trying to claw back SVB chief executive Greg Becker's executive compensation.

@Lucinda is glad to be home after two weeks of travel.

@Ryan is back to lifting (kind of ) heavy.  

Thanks to George Moriarty 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.

May 17, 2023

1 big thing: Stash lays off 10% of workforce