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🎃 Situational awareness: The early Halloween push known as "Summerween" is making way for "Augtober" and pumpkin spice season.

Sling Money, which is building a blockchain-based app for peer-to-peer international money transfers, has raised $15 million in Series A funding, it tells Axios exclusively.

Why it matters: Leveraging the blockchain could help make transfers instant and almost free, but making it easy to use is a challenge.

How it works: Sling Money's app enables users to easily send and receive funds instantly in more than 50 countries across Europe and Africa.

Users can search for friends or contacts in the Sling directory by name if they already have an account, or they can send funds to non-users by creating and sharing a "Sling Link" via any messaging platform.

Between the lines: The app uses the Solana blockchain and Paxos' USDP stablecoin to enable low-cost, instant money transfers.

When users sign up, they create a self-custodial wallet so that only they can access any funds added or received within the app.

The app transfers money using USDP and then seamlessly converts it between USDP and the end user's fiat currency of choice.

Context: Sling Money was founded by Mike Hudack, former chief product officer at Monzo and Deliveroo, and Simon Amor, who held product design roles at Kraken, Spotify and Monzo.

"At Monzo, peer-to-peer had been the No. 1 driver of growth ... and I had for a long time wanted to build a global peer-to-peer product," Hudack says.

That, along with working on a decentralized identity product, inspired Hudack to develop "a global Venmo," he says.

Friction point: At the time, Hudack says, the process of buying stablecoins took way too long, and the KYC process was poor and clunky.

Sling Money seeks to alleviate those issues by building a user interface that simplifies ID verification and fast onramps to add money to a user's wallet.

"It was just bizarre to me how nobody had built a really user-friendly experience on top of [blockchain technology], so we started Sling," Hudack says.

The fine print: Sling Money is a registered virtual asset service provider in the Netherlands, which allows it to serve the EU market.

It is also registered with FinCEN in the U.S. but has not launched there yet.

Zoom in: Union Square Ventures led the Series A round, which also included existing investors Ribbit Capital and Slow Ventures from its $5 million seed round.

VCs throw Sling Money $15M

Illustration of people shaking hands through binary code. 

Capitalize, a startup focused on automating 401(k) rollovers, raised a $19 million Series B led by existing investor RRE Ventures.

The big picture: Amid an increase in job-hopping and an aging population, 401(k) rollovers have become a big opportunity for financial firms. 

Context: Rollovers have turned IRAs into a larger part of the retirement pie for Americans than the 401(k), totaling $14.3 trillion versus $11 trillion, respectively, per the Investment Company Institute.

Americans rolled over about $779 billion into IRAs in 2022, according to Cerulli Associates. That's up from about $404 billion in 2013.

Flashback: Capitalize was founded as a way to find old 401(k) accounts  and automate away the heavily manual process of moving it over into an IRA, easing the notoriously difficult rollover process.

Marketed directly at consumers, the company made a referral fee, akin to NerdWallet's business model, by suggesting various products.

Capitalize launched an "enterprise" product in 2022 that now accounts for over 50% of its business, CEO Gaurav Sharma says. It counts Robinhood, SoFi, Ellevest, Betterment and Schwab among its customers.

Instead of requiring consumers to seek out Capitalize, the new business lets consumers access the company's tech from inside Schwab or Betterment, switching old 401(k)s to IRAs on those platforms.

It's then paid per rollover by the Robinhoods and SoFis, typically a flat fee.

This comes as investors have become increasingly bullish on the embedded finance part of the fintech economy.

"When they unlocked that, I jumped in as it's a much more economical way of acquiring customers," says RRE general partner Raju Rishi.

Between the lines: Capitalize's fundraising comes as consumer-facing fintechs — including several of its customers — have been under pressure to diversify and cross-sell to existing customers in a bid to steady revenue.

Known better for its pool of active traders, Robinhood launched an IRA product in late 2022 that offers a 1% match. SoFi shortly after hit back with a 2% match.

The latest: NYC-based Capitalize is also looking for ways to eventually shorten the time it takes for a rollover to hit the new account — turning itself into the rails between different financial advisors and brokerages.

"The way the actual dollars move, unfortunately, is something that is still fairly antiquated and we also want to change," says Sharma. "A lot of times, institutions are sending checks between one another as opposed to ACH or wires."

Zoom in: Canapi Ventures, Bling Capital and Industry Ventures also participated in the round.

Sharma declined to comment on whether the deal was an up-round from its previous valuation.

Capitalize pulls $19M Series B 

Illustration of a pattern of rolled up twenty dollar bills. 

📈 Shares of Nubank rallied after its earnings report beat analyst expectations, posting record revenue and profit figures. (Bloomberg)

🏝️ Coinbase will resume offering crypto services to residents of Hawaii seven years after exiting the market. (Decrypt)

😵‍💫 The CFPB will examine bank chatbots, seeking to address "doom loops" that waste customers' time. (Banking Dive)

💳 MetaMask began rolling out a blockchain-based debit card it developed in partnership with Mastercard and Baanx. (CoinDesk)

Credit score

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

• Sahara AI, an L.A.-based decentralized AI blockchain platform, raised $43m led by Pantera Capital, Binance Labs and Polychain Capital. Samsung, Matrix Partners, dao5, Geekcartel, Nomad Capital, SCB 10X, Canonical Capital, Mirana Ventures, Foresight Ventures, Dispersion Capital, Aegis Ventures, Alumni Ventures and Tangent Ventures also participated. Go deeper

• Setpoint, an Austin-based credit decisioning infrastructure provider, raised a $31m Series B led by 645 Ventures. Citi, Wells Fargo, a16z, NextView Ventures, Floating Point, Henry Kravis, Zillow founder's 75 & Sunny, Vesta Ventures, FifthWall, Eltura Ventures and Outrunner Capital also participated. Go deeper

• Companion Protect, a Kansas City-based pet insurance administration company, raised $20.3m in extended Series A funding. Investors included Avanta Ventures, Liberty Mutual Insurance, Old Republic International Corp. and Stray Dog Enterprises. Go deeper.

• Syfe, a Singapore-based investment platform, raised a $27m Series C from two U.K.-based family offices and returning investors Valar Ventures and Unbound. Go deeper

• Vayana, an Indian trade credit platform, raised $20.5m in a Series D led by SMBC's Asia Rising Fund. International Finance Corp., Chiratae Ventures, Jungle Ventures, Quantum State Investment Fund and Emerald Co. also participated. Go deeper

• Essential, an Ethereum Layer-2 blockchain developer, raised an $11m Series A led by Archetype. Other investors include IOSG Ventures, the Spartan Group, Mirana Ventures, Amber Group, Maven 11 and Big Brain Holdings. Go deeper

• Experian acquired NeuroID, a Whitefish, Mont.-based behavioral analytics and fraud prevention startup, for an undisclosed sum. Go deeper

• Ton Ventures, a for-profit VC arm of the Ton Foundation, announced a $40m fund to invest in the Ton ecosystem. Go deeper

Deals!

• Bitfarms CEO Ben Gagnon was appointed to its board, as founder and former chairman Nicolas Bonta stepped down. The board also appointed lead director Brian Howlett as its new independent chairman. Go deeper

• Simon Robertshaw, former COO at The Bank of London, joined Broadridge Financial Solutions as chief technology officer for front office trading capabilities. Go deeper

• Techstars, a pre-seed fintech investor, said it would cut its global workforce by 17%. Go deeper

It's Personnel

😊 @Lucinda is glad to finally be back in NYC.

❌ @Ryan is is not ready for pumpkin spice season.

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 city lovers about this newsletter. They can sign up here.

1 big thing: VCs throw Sling Money $15M

2. The BFD: Capitalize pulls $19M Series B

3. Credit score

4. Deals!

5. It's Personnel

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August 14, 2024

1 big thing: VCs throw Sling Money $15M