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BFD Expert Voices - Private Credit

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😨 Situational awareness: The average likelihood that consumers will miss a minimum debt payment in the next three months rose to 13.3%, the highest level since April 2020, according to a New York Fed survey.

Tally, a startup founded to help consumers pay off credit card debt, is shutting down, CEO Jason Brown announced in a LinkedIn post yesterday.

Why it matters: The shutdown comes less than six months after the company announced its plans to pivot to B2B.

Context: Tally's app provided a dashboard to help consumers pay down their credit card balances and, in some cases, offered credit lines to pay cards directly on their behalf.

Between the lines: In April, the company said it was shutting down its consumer operations and would instead begin offering its credit card repayment technology on a white-label basis to large banks and fintechs.

At the time, Brown told Axios that Tally's first B2B partner — described as "a large, publicly traded FI with 65 million customers" — would go live with its technology in June.

The company also said it had secured additional financing to support its B2B transition.

Yes, but: Since then, the company has made no announcements related to its planned partner launch, and whatever money it raised appears insufficient to fund its new direction.

"[A]fter exploring all options, we were unable to secure the necessary funding to continue our operations," Brown wrote in the LinkedIn post.

Flashback: According to PitchBook, Tally had raised $172 million in total, including an $80 million Series D round that valued it at $855 million in October 2022.

Investors included Andreessen Horowitz, Kleiner Perkins and Sway.

What they're saying: "This decision was incredibly difficult, but I'm proud of what Tally accomplished over the years," Brown wrote in an email to Axios.

"While Tally's journey is ending, the drive to help people manage their debt more effectively continues, and I'm hopeful that others will build on what we started," he added.

💭 Our thought bubble: Though fintechs increasingly see selling to banks as a more efficient way to reach consumers, it's no guarantee of success.

Tally CEO announces shutdown

Illustration of a hand using the Tally logo as a hammer to break the ball on a ball and chain.

Liquidators of crypto hedge fund Three Arrows Capital are asking for at least $1.3 billion from TerraForm Labs, the bankrupt stablecoin business.

Why it's the BFD: Underneath bitcoin's near all-time highs, many investors remain singed and sidelined from crypto winter's effects.

Flashback: TerraForm Labs and 3AC were the first crypto dominoes to fall in 2022 — jumpstarting the contagion. TerraForm Labs' tokens were a major position for 3AC.

Now, 3AC's liquidators are seeking to recover capital for creditors, and they estimated a 46% recovery rate for creditors in December.

Driving the news: TerraForm Labs "made material misrepresentations  and omissions" and "engaged in a scheme to manipulate the open market for Luna and UST in a manner that artificially inflated the price for the assets," 3AC's liquidators claim.

3AC had initially bought some $190 million worth of Luna tokens. But the liquidators say the token's collapse had a foreseeable contagion effect on the rest of 3AC's portfolio.

From April 30, 2022 to May 14, 2022, the liquidators say all other 3AC assets fell $858.2 million — contributing to the bulk of that $1.3 billion figure.

3AC seeks $1.3B from TerraForm

Illustration of a crypto coin split up as a pie chart. 

⚖️ The SEC sued crypto firm NovaTech and its co-founders, alleging they fraudulently raised over $650 million from more than 200,000 investors. (Reuters)

🇮🇳 Wise plans to resume new-user signups in India, re-entering a market that has grown to $32 billion. (Bloomberg)

😩 Bank of America superiors instructed junior bankers to ignore company rules aimed at protecting them from being overworked. (WSJ)

🇧🇷 Cross-border B2B payments provider Nium applied for a payment institution license in Brazil. (Fintech Futures)

Credit score

Illustration of a dart in the bullseye of a dartboard that says "credit score."

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

• PayZen, an SF-based health care financing startup, raised a $32m Series B led by NEA, with participation from 7wireVentures, SignalFire, Viola Group and others. It also raised a $200m credit facility from Viola Credit. payzen.com

• Blitzscale Technology, the parent of retail tech providers WMall and ShopDeck, raised $7.85m led by Bessemer Venture. Go deeper

• Skydo, an India-based cross-border payments platform, raised $5m in pre-Series A funding led by Elevation Capital. Go deeper.

• Ion Protocol, a liquidity protocol for staked and restaked assets, raised an additional $4.8m from Gumi Capital Cryptos, Robot Ventures, BanklessVC, NGC Ventures, Finality Capital and SevenX Ventures. Go deeper.

• SoloSuit, a company providing tools for consumers to settle debt with collectors, raised a $2m seed plus round from McPike Global Family Office, Lobster Capital, Mana Ventures and Temerity Impact. Go deeper

• Proven Optics, a Columbus, Ohio, cost management software maker backed by Silversmith Capital Partners and ServiceNow, acquired cloud financial optimization provider CloudGenera. Go deeper

• Sumitomo Mitsui Banking Corp and Emirates NBD are in advanced talks to acquire a majority stake in Yes Bank, an Indian bank, per Reuters. Go deeper.

• Arche Capital Management, a crypto venture firm, aims to raise a debut fund of up to $100m. Go deeper

• Antler, a Singaporean VC firm, raised $72m for its second Southeast Asia fund. Go deeper

Deals!

• Andy Ivankovich, a former USAA and Fiserv exec, joined Baker Hill as CEO. Go deeper

• Hu Li, formerly director and CEO of FTFT International Securities and Futures Limited, was promoted to CEO, president and member of the board at Future Fintech Group (Nasdaq: FTFT). Go deeper

• Yekaterina Gusin was named CFO at Reward following Experian's acquiring a strategic stake in the firm. Go deeper

• Rashmi Satpute was named country director of India at EBanx. Go deeper.

• John Pfisterer, former CFO at Paya, was named CFO at Simpay. Go deeper

• Shane Flatman joined Fund Recs as strategy and business development director, APAC. Go deeper

• Shobhit Maini, global head of digital assets in Citigroup's market unit, has left the bank. Go deeper

It's Personnel

 😾🐶 @Lucinda negotiated a cat and dog showdown yesterday.

 ⚾🏀🏈 @Ryan is going to Fanatics Fest this weekend.

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 and patient pet-sitters about this newsletter. They can sign up here.

1 big thing: Tally CEO announces shutdown

2.  The BFD: 3AC seeks $1.3B from TerraForm

3. Credit score

4. Deals!

5. It's Personnel

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August 13, 2024

1 big thing: Tally CEO announces shutdown