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💰 Situational awareness: Revolut founder Nik Storonsky plans to offload stock worth tens or even hundreds of millions of dollars as part of the company's $500 million share sale, per Sky News.

👀 What we're watching: Crypto markets remain volatile as the long-dreaded Mt. Gox bitcoin starts moving to third parties for repayment to former users of the defunct exchange.

Venture capital activity in crypto is a comeback story, slowly gathering steam after the 2022-23 slump. 

Why it matters: The crypto VC market continued to rebound in the second quarter even though bitcoin's performance wasn't as strong.

That's according to Galaxy Research, citing founders and investors saying April to June was a more active fundraising environment than prior quarters.

Between the lines: "Allocators may be preparing to return in earnest due to the resurgence of liquid crypto," Galaxy Research's Alex Thorn and Gabe Parker wrote in their report, saying that could lead to greater VC activity in the second half.

Context: Early-stage startups got a larger piece of the pie than later-stage ones, with 78% of second-quarter capital allocated to the former and 20% to the latter.

Early-stage venture funds still have cash to deploy, while larger, more generalist VCs have left the sector or downsized investments there.

What we're watching: Crypto firm valuations spiked in the second quarter, reaching the highest levels since the fourth quarter of 2021.

"Despite no significant increase in investment capital, founders have leveraged interest and competition among the existing investor base," the report said.

Yes, but: Median valuation data was as of July 1, meaning it can be adjusted as more Q2 deals are reported, they added.

Zoom in: Companies in the web3, NFT, DAO, metaverse and gaming categories raised the largest share of capital in the second quarter, around $758 million.

Decentralized social media network Farcaster's $150 million raise and gaming guild Zentry's (aka GuildFi) $140 million round were the largest in that bucket.

Investments in infrastructure, trading and layer 1 firms followed, with those three buckets getting roughly the same 12% to 15% of capital invested in the second quarter.

Our thought bubble: Crypto's turnaround in crypto equity and token investments is also visible, per our Fintech Pro colleagues, though it's still behind AI. 

Crypto VCs in rebound mode

Illustration of a pattern of 3D pixel style dollar bill signs. 

Niva, which is developing a know-your-business (KYB) platform for cross-border commerce, has raised $3.3 million in seed funding, it tells Axios exclusively.

Why it's the BFD: Cross-border businesses must meet local and international KYB requirements, but the current manual process is time-consuming.

How it works: Niva's AI-driven platform integrates with its customers' onboarding flow and can automatically review businesses and either verify or send them for review.

Its complete KYB solution is live in the U.S. and Mexico, and it plans to expand to Brazil in the coming months.

The platform can generally verify businesses globally based on their online presence and public data sources.

The big picture: B2B transactions account for over $150 trillion, or around 97% of all cross-border payments.

However, KYB compliance remains a complex problem due to the different languages, data sources and document formats that companies must use.

"Ops teams are manually reviewing these businesses, looking at hundreds of pages of documents on each business ... and trying to figure out who the owners are today based on all that," Niva CEO Abhinav Rai says.

Between the lines: Rai says the company has benefitted immensely from the proliferation of generative AI models that enable Niva to handle different data types without building discrete models for each country.

"This was almost impossible to solve, especially on a global scale, before all the new AI progress over the last two years," he says. "Suddenly, you can start looking at businesses across different countries and languages to start tackling different regulations."

Context: Before founding Niva, Rai was a general manager at SMB data startup Enigma, where he led development of its KYB product.

His co-founder and CTO, Akhil Naini, was an engineering leader at Gusto, Coinbase and Chime.

Zoom in: Google's AI-focused VC fund Gradient Ventures led the financing, with Picus Capital, Canary and Gilgamesh Ventures also participating.

Early customers include LatAm-focused SME financial services firm Xepelin and Mexican BNPL provider Aplazo.

Compliance startup Niva raises $3.3M

Illustration of a pattern of check marks in connected cubes.

🏦 JPMorgan exec: Prepare to pay for checking accounts (WSJ)

Chase Bank head Marianne Lake warns that proposed financial regulations capping overdrafts and late fees will make banking significantly more expensive for consumers. 

She says that if the rules become law in their current form, the bank plans to charge customers for now-free services like checking accounts and wealth-management tools.

💻 Inside a16z's boot camp for crypto startups (Wired)

This spring, a16z schooled a new batch of founders it hopes can prove crypto is good for more than scams and speculation. The VC firm provides participants with $500,000 in funding, 10 weeks of tuition, and access to its resources in exchange for an undisclosed amount of equity.

💳 This credit card feature can muck up your bills (WSJ)

When you request a new card, credit card companies often automatically update your card information with merchants — a convenience that has become a headache for some customers when fraud occurs.

🔎 South Korea hunts for fraudulent crypto trading (Bloomberg)

The Financial Supervisory Service is setting up a system to monitor for unusual crypto trading activity. Exchanges are advised to feed data and information into the system to ensure compliance with the legislation that becomes active July 19.

Credit score

an illustration of a pinball and pinball machine flippers that have the words "credit score" printed on them 

Go deeper into our full database with the Axios Pro Deals Tracker.

• Grow Inc, an Australian blockchain-based fund management software maker, is looking to raise A$60m in Series D funding. Hitachi Ventures is leading the deal. axios.link/3zAPcD6

• Dash Technology Group, an Australian financial adviser software firm, has raised A$22m from Bailador Technology Investments. axios.link/4eT2xqj

• Astria, a development stack for building and deploying decentralized rollups, raised $12.5m. Placeholder VC and DBA led and were joined by RockawayX, Maven11, 1kx, Figment Capital and Batu. axios.link/3RTZdSc

• FreeBnk, a Lithuanian hybrid crypto banking app, raised $3m in an equity and token round from Founderheads, ChaiTech Ventures, LVT Capital and Lavender Capital. axios.link/3W9bzIB

• Heymax.ai, a Singaporean loyalty platform, raised $2.6m in seed funding led by January Capital. axios.link/3LaDnWG

• Trever, an Austrian digital asset management platform, raised €2.4m in seed funding co-led by TX Ventures and Market One Capital. axios.link/3W8UwXd

• Ant International acquired Amsterdam-based payment service provider MultiSafepay to integrate into its global merchant payment services Antom. axios.link/3WaqjqH

• Barclays (NYSE: BCS) agreed to sell its German consumer finance business to a subsidiary of Austrian bank Bawag Group. axios.link/3zvg6MB

• Fintel (London: FNTL) acquired Manchester-based fintech Threesixty from U.K. asset management firm Abrdn for £14.6m. axios.link/3W9Mehr

• GEP, a New Jersey provider of procurement software, acquired OpusCapita, a Finnish e-invoicing and procurement software provider backed by PSG, Providence Equity Partners and Verdane. axios.link/3RWiD8V

• Vivid Money, a Berlin-based mobile banking startup, acquired Pile Capital's treasury solution. axios.link/3LcYVCc

• Consensys, developer of the MetaMask crypto wallet, acquired crypto security app Wallet Guard. axios.link/3xRAUxa

Deals

• Erin Platts, former head of HSBC Innovation Banking UK, joined Octopus Ventures as CEO. axios.link/4cqKGoZ

• Jason Cinq-Mars, SVP of next-generation banking at Canada's Innovation Federal Credit Union, was promoted to CIO. axios.link/3LcXGTy

It's Personnel

⚾️ @Ryan is excited for this week's Phils-Dodgers matchup.

🤤 @Lucinda thinks bánh mì is an amazing creation.

Thanks to George Moriarty and Rob Reinalda for today's edits.

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

1 big thing: Crypto VCs in rebound mode

2.   The BFD: Compliance startup Niva raises $3.3M

3. Credit score

4. Deals

5. It's Personnel

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July 08, 2024

1 big thing: Crypto VCs in rebound mode