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Webull, the stock-trading app that gained prominence during the pandemic, announced today that it has agreed to go public via merger with a special purpose acquisition company, Lucinda writes.

Why it matters: Fintechs are stepping into the (slowly) reopening public markets.

Driving the news: Webull expects to go public, pending shareholder and regulatory approval, in the second half.

It will begin trading on the Nasdaq after merging with SK Growth Opportunities Corp., a SPAC anchored by SK, the South Korean conglomerate.

Created in December 2021, the SPAC intended to find a company with strong ESG metrics.

The deal would give the combined company an enterprise value of $7.3 billion, and Webull is expected to get $100 million as part of the deal.

What they're saying: The company sees going public as a path to more financing options.

"It also gives our investors more transparency into our business," says Webull group president Anthony Denier.

This comes as the company, which Denier says is profitable and counts most of its revenue in the U.S., is expanding aggressively abroad.

Between the lines: The deal comes as companies with ties to China are coming under scrutiny.

U.S.-headquartered Webull has been noted for its early Chinese investors. Denier, though, notes that the company is not majority owned by Chinese investors and has only one Chinese board member. Other investors include Coatue, General Atlantic and Lightspeed.

Notably, Webull was known for having crypto operations, though company executives spun that business off last year — in part because they're aware of regulatory scrutiny.

"We spun that business out into a non-affiliated company with a completely different group of shareholders and different share structure called Webull Pay before the end of 2023 for the specific purposes of going public," says Denier.

Crypto trading, through not the majority of its business, was notably the sticking point for the SEC in Apex Fintech's deal to go public via SPAC in 2021. It canceled the deal and instead filed confidentially for an IPO after spinning off its crypto operations.

1 big thing: WeBull's SPAC plan

illustration of the wall street bull peeking through an open window

Payments giant Stripe will let current and former employees cash out more of their stock through a $1 billion-plus tender offer announced this morning, Ryan and Dan Primack write.

Why it's the BFD: Stripe is no longer a 2024 IPO candidate.

Zoom in: The offer values Stripe at $65 billion, up from $50 billion last year but down from the $95 billion valuation it garnered in a 2021 fundraise.

Investors in the tender offer reportedly include Sequoia Capital and Goldman Sachs' growth equity fund.

Also investing is Stripe itself. A source says the company became cash-flow positive last year, thanks in part to a growing enterprise SaaS business, and expects to be cash-flow positive for all of calendar 2024.

Flashback: Stripe offered a similar deal to employees last year, buying more than $6.5 billion worth of stock — although around half of that transaction was used to cover various tax obligations.

Andreessen Horowitz and Temasek were the key investors involved in that deal.

The bottom line: Stripe has long said it's in no hurry to go public, and it keeps putting its money where its mouth is.

Stripe now valued at $65 billion, but it isn't going public

2. The BFD: Stripe's $1B-plus tender offer

Illustration of the Stripe logo with the S as a dollar sign.

Coverdash, an SMB-focused embedded insurtech, raised $13.5 million in Series A funding led by Nyca Partners, Ryan writes.

Why it matters: The platform simplifies the process for SMBs seeking to acquire insurance.

How it works: New York-based Coverdash helps its partners offer insurance to customers by embedding a line of code on their platforms.

It then connects the small-business owners, online merchants and freelancers who use those platforms with coverage that meets their needs.

Zoom in: Partners include payroll providers, point-of-sale providers, banks, vertical SaaS platforms, online merchant portals, and freelancer marketplaces.

Available policies include general liability, workers comp, directors and officers liability, and cyber and professional liability insurance.

Coverdash has integrated with dozens of insurance providers, streamlined their typical questions, and unified them into a single user flow, allowing for a wider range of offerings.

What they're saying: "In our flow, you come in, answer between five and 15 questions about your business, and then you're sourcing actionable and viable quotes," Coverdash CEO Ralph Betesh says.

"You're able to compare those quotes against each other. ... And then you're able to transact on any quotes in our environment without having to speak to one of our agents or being redirected anywhere."

Yes, but: Though Coverdash has digitized the process of comparing quotes and securing insurance policies, it's a full-service insurance agency with agents on staff to answer questions and provide a personalized experience.

Between the lines: By embedding insurance as an option, partner platforms can create ancillary revenue while increasing customer engagement and retention rates.

Using their data, Coverdash can also recommend new insurance products when businesses on those platforms hit relevant company milestones.

Existing investors Bling Capital, Axis Digital Ventures, Tokio Marine Future Fund, Expansion VC, Cameron Ventures and others also participated in the round.

Altogether, Coverdash has raised $16 million since being founded in 2022.

3. Embedded insurance for SMBs 

Illustration of hand cursor clicking a life preserver

💳 The challenge for Capital One in integrating Discover (Capital One)

Even if regulators approve Capital One's bid to acquire Discover, it will not immediately move cards onto the Discover network. That's because Discover faces a branding issue and a lack of international acceptance.

"For non (Discover) customers, there was a significant gap in the perception of acceptance," Capital One CEO Richard Fairbank said yesterday. "We need to bring Capital One's marketing muscle and sort of brand into having the perception of the network catch up to the reality of the network."

📉 Klarna reports annual loss ahead of possible listing (FT)

The buy now, pay later pioneer today reported a net loss of SKr2.5bn ($241mn) for 2023, narrower than its SKr10.4bn loss in 2022. Revenues rose 22 per cent to SKr23.5bn.

CEO Sebastian Siemiatkowski said the company had "made a conscious decision to invest in growth in the peak shopping season" at year-end and that it would continue to "invest wisely for growth and focus on being cost-effective on our path towards annual profitability."

🍎 Experian credit reports to include Apple Pay Later (Experian)

Apple has become the first major BNPL provider to fully furnish "pay-in-4" info and payment history to the credit reporting agency.

Accel and Eurazeo-backed Kevin failed to pay some employees for as long as two months as it struggled to raise funding. It eventually struck a deal for a $25 million bridge round and laid off about 100 employees in January.

4. Credit score

Illustration of an exam answer sheet with the words "credit score" hand written in red ink.

• Ether.fi, a Cayman Islands-based liquid restaking protocol, raised $23m. Bullish Capital and CoinFund led the round. www.ether.fi

• NayaOne, a startup matching financial institutions with fintechs, raised $4.7m. EJF Capital led, with Valley Ventures and Carthona Capital also participating. https://axios.link/3Ih0YDK

• Morpho, a decentralized lending protocol, received an undisclosed investment from Pantera Capital. https://axios.link/3Ii51j4

• YoFio, a Mexico-based micro-loan startup, raised $10m in debt and equity. Oikocredit led and was joined by 500 Global, Innogen Capital, G2 Fintech Fund and Cauris Finance. https://axios.link/3TdEidL

• Nordic Capital acquired ActiveViam, a New York-based provider of banking software that had been backed by Guidepost Growth Equity. www.activeviam.com

• Nabis, a licensed cannabis wholesaling platform, acquired Blackbird, a Nevada-based distribution solution. https://axios.link/42WX4cL

• Klarna has begun discussions with investment banks to work on an IPO to occur as early as the third quarter, per Bloomberg. The BNPL provider is considering seeking a valuation of around $20b. https://axios.link/3IdHoIe

5. Deals!

• Doug Braunstein, a former finance chief at JPMorgan Chase, joined Wells Fargo as vice chairman. https://axios.link/3STpGPi

• Barrett Schiwitz, formerly an SVP at Snap One, joined Finnish fintech Basware as chief information officer. Anssi Ruokonen was named director of AI research and enablement. https://axios.link/3V0fJlN

• Geoff Seeley, formerly with Cash App and Afterpay, joined PayPal as chief marketing officer. https://axios.link/3SYivVY

• Gary Delaney joined BNY Mellon as international CISO. https://axios.link/4bToLXF

6. It's personnel

🐪 Welcome to Wednesday. Lots to cover in the fintech world today.

🚨 Situational awareness: Bitcoin rallied above $60,000 this morning, riding its bullish momentum to its highest levels since November 2021.

💭 ICYMI: Our 2nd annual Pro subscriber survey is open for one more week. Please take 5 minutes to share your feedback and enter to win one of two $100 Amazon gift cards.

 😭 @Lucinda sees that Wednesday is the new Tuesday.

 😵‍💫 @Ryan is a bit overwhelmed by all the fintech news today.

🌪️ @George picked the wrong morning to quit sniffing glue.

Thanks to Rob Reinalda for today's edits.

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

February 28, 2024

1 big thing: WeBull's SPAC plan