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BFD Expert Voices - Private Credit

BFD Expert Voices

Apple and Goldman Sachs' rocky partnership, which began in 2019, looks to be near its end after Apple reportedly sent a proposal to Goldman to exit from the contract, Axios Pro Deals research associate Natalie Breymeyer writes. 

Driving the news: With Apple potentially seeking a new partner, Bloomberg's Mark Gurman speculates JPMorgan Chase could be a top candidate.

Between the lines: Although Apple is giving Goldman an out, the dissolution of their partnership aligns with Goldman's efforts over the last few months to wind down its consumer businesses.

💭 Ryan's thought bubble: Despite the popularity of Apple Card, the partnership seemed troubled from the start, bringing Goldman under regulatory scrutiny and contributing over $1 billion in losses to its consumer lending operations.

The question remains whether Chase or another traditional card issuer will agree to some of the concessions — waiving late fees, issuing statements at the start of each month, and not selling customer data — that caused headaches at Goldman.

1 big thing: A brief history of Apple Card

Bitcoin yesterday touched $42,000, a level not seen since May 2022, before the collapse of a stablecoin called TerraUSD heralded the industry's meltdown, Axios Markets' Emily Peck writes.

Why it's the BFD: The price surge comes thanks to optimism about the possibility of a Bitcoin ETF, as well expectations for Fed rate cuts buoying riskier assets — but this isn't just a market forces thing.

A less-appreciated aspect of bitcoin's current run is what happened last month with Binance, the world's largest crypto exchange.

Catch up fast: The company and its CEO pleaded guilty to money laundering and fraud charges, agreeing to pay more than $4 billion — the largest penalty in U.S. Treasury history.

Among the charges, Binance laundered money for terrorist groups including Hamas.

Despite the current anti-crypto atmosphere among some U.S. regulators, the settlement agreement allowed Binance to continue operating.

The big picture: Though the crypto market lives on, the vision of what cryptocurrency could be is very different from its early days.

Given the Binance deal, it's hard to argue that crypto traders are operating in a decentralized Wild West market outside of U.S. dollar hegemony.

Instead, the market has drifted toward centralization where big exchanges — Coinbase, too — operate under the watchful eye of the U.S. government. (Lawbreakers could move to smaller, less-centralized trading to try to avoid detection.)

Yes, but: Regulators aren't done with Binance. A lawsuit filed by the SEC is ongoing.

The bottom line: A year ago, in the wake of Sam Bankman-Fried's downfall, the future of crypto looked uncertain — but it has survived and has even mounted a bit of a resurgence.

2. The BFD: Bitcoin rallies post-Binance deal

📱 Fintechs rally 800% in Lagos amid bet on mobile banking (Bloomberg)

Two of the year's hottest Nigerian stocks — Chams and Computer Warehouse — are companies that reinvented themselves to target the country's vast ranks of consumers without bank accounts.

🏦 Congress scraps CFPB SMB lending data rule (Banking Exchange)

The rule would have required lenders to collect and report information about SMB credit applications they receive, including geographic and demographic data, lending decisions, and the price of credit.

📈 Robinhood says crypto trading surged 75% in November (The Block)

"November Crypto Notional Trading Volumes were roughly 75% above October 2023 levels," Robinhood wrote in an SEC filing. The news could mark a reversal for the company, which has recently seen revenue from crypto trading decline.

💰 U.S. crypto lobby spending on track for new record in 2023 (Reuters)

Crypto companies spent $18.96m in the first three quarters of 2023 on lobbying, compared with $16.1m during the same period in 2022. That was despite last year's meltdown of crypto exchange FTX, which had been a top-ten spender.

3. Credit score

Want more fintech deals? Check out the Axios Pro Deals Tracker beta.

• Shadow, a crypto data platform startup, raised $9 million in a seed round led by Paradigm. Other investors include Coinbase Ventures, Electric Capital, Ethereum Foundation, Uniswap and Flashbots. https://axios.link/47LcS3U

• Necto, a New York and Singapore-based corporate banking API aggregator, raised $8m in seed funding from Nyca Partners, Point72 Ventures, Vine Ventures, Avenir Growth, Communitas Capital, Edison Partners and AFG Partners. www.necto-api.com

• Omniful, a supply chain and e-commerce enablement startup, raised $5.85m in seed funding led by VentureSouq, with participation from 500 Global, DASH Ventures, Jahez Group, Seedra Ventures, Bunat Ventures, Hala Ventures, RZM Investments and several family offices including Al Rasheed, Siraj Holding, Al Bawardi and Al Nafea. https://axios.link/3TbGgvA

• Finexos, a credit and affordability risk analytics platform, raised a £690k seed round led by Growth Capital Ventures with participation from SyndicateRoom and existing investors. https://axios.link/3Rslvul

• GIC is in talks to invest in Atlas SP Partners, the securitization business that Apollo bought from Credit Suisse, per Bloomberg. https://axios.link/3Rq5dSC

• Best Egg, a Wilmington, Del.-based personal loan startup, secured a $150m credit facility from Cross River Bank. https://axios.link/46LX1AL

• Phoenix Group, a crypto mining hardware retailer, soared as much as 50% on its Abu Dhabi debut after an initial public offering that raised 1.36b dirhams ($371m). https://axios.link/3RbgeG4

• Fitch Group, a Hearst-owned financial information services provider, acquired syndicated loan credit information provider Bixby Research and Analytics. https://axios.link/3NezJfJ

• Heartcore Capital, a Denmark-based VC firm, raised €15m for its first crypto fund. https://axios.link/3tddoIC

4. Deals!

• Jonas Templestein, co-founder and former CTO of Monzo, is leaving the U.K. challenger bank. https://axios.link/3uLHBz6

• Ray Youssef, former CEO of Paxful, has been appointed CEO of Noones. https://axios.link/46FgfI1

• John O'Beirne, a former exec at Bank of Ireland, has joined Square as CEO and executive director of its Europe operations. https://axios.link/3uEzuEi

• Konstantin Zaripov is rejoining Spanish crypto financial services platform Nebeus as managing director after five years away. https://axios.link/41cv9o3

• Dana Malman Warren joined Canaan as a venture partner. She previously led global strategic platform partnerships at Stripe. www.canaan.com

• General Atlantic promoted seven pros to managing director: Karim Boueiz, Oscar Fan, Roger Gao, Susan Murphy, Lee Vanderpool, Caroline Woodworth and Leo Wouters. www.generalatlantic.com

5. It's personnel

🌞 @Ryan was up bright and early today.

🏀 @George tuned in to the Celtics last night. That went poorly ...

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.

December 05, 2023

1 big thing: A brief history of Apple Card