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BFD Expert Voices - Private Credit

BFD Expert Voices

Welcome back from the long weekend. We've got a lot to catch up on.

Binance plans to hire 1,500 people this year and remains profitable despite its mega fine. 

Food stamps startup Propel received a $3.5 million grant from the Gates Foundation. 

Public acquired controversy-ridden Carta's startup stock marketplace accounts.

Haun Ventures general partner Diogo Mónica sees increasing competition in the crypto venture market as traditional institutional funds and digitally native crypto funds jockey for the best deals.

Why it matters: Large crypto deals have been few and far between over the last two years, but the market could be turning around for companies with real revenue.

Context: Mónica co-founded crypto custodian Anchorage Digital and was the first general partner hired to work alongside Haun Ventures founder Katie Haun.

Last month, Mónica led his first venture deal — a $55 million Series A round for on-chain risk management startup Chaos Labs.

(This interview has been edited for brevity.)

Catch me up on the last six months since it was announced that you were joining Haun Ventures.

When we announced it, it was a transition announcement. Technically, I only started three months ago, but I've already led two deals. The transition has been extremely fun to a large extent.

I've been doing [deals] for a long time. Personally, I have over 150 angel investments. I feel like I was playing mini golf, but now I'm playing golf. Technically, the mechanics are the same: There's a ball and a club, but it's a very different sport. 

Can you share more about how writing checks as an angel is different from leading a $55 million investment like Chaos Labs?

The biggest thing is winning the deal becomes very different. For seed or Series A, it starts being a fight for allocation. The main thing is that there are only so many points on the cap table, and very quickly into the role, you have to decide whether to collaborate or whether to compete. 

I love competing. As an angel, I never really had to compete. But here, I'm actually competing — and I'm not just competing with crypto funds. I'm competing with big Tier 1 funds. And I'm competing with people who gave me offers to join their firms — and that is amazing. I love this. 

How about the transition from operator to investor? What has that been like?

I think I'm the only GP in a crypto fund who has actually been a crypto founder. 

It's been amazing to talk to founders and say: "Hey, I know what you are suffering through. I know what it looks like every two years to have 80% of your revenue go away like clockwork." 

Building a company in crypto is being a founder in hard mode. It's already insane, you know, "chewing glass and staring into abyss." But it's a harder version of the abyss, a darker version of the abyss.

You mentioned competition earlier. What's the crypto investing environment like these days, and who are you competing against?

It's extremely competitive. There are two sources of competition: the traditional firms and the crypto funds. 

There are crypto deals that are palatable to traditional venture funds. In stablecoins, you're competing against a16z and Sequoia and USV and Ribbit and all the normal players. In crypto token deals, you're competing against all the crypto funds that you'd expect. 

We play on both sides, and we're one of the few that co-invest with all of them. So, depending on how a founder sees themselves, we also have to sell ourselves differently and showcase different strengths based on what they want.

Looking at the Chaos Labs deal, we haven't seen many $50 million deals in crypto lately, particularly at the Series A stage. Is this a sign that big crypto deals are back?

If it's up to me, they are. We have a $500 million early-stage fund and a $1 billion late-stage fund. I have capital to deploy, and I want amazing deals that I can deploy lots of capital into.

It depends on the type of deal. Layer-2s and ... these sort of derivative infrastructure plays that are not core Layer-1s are going down. 

But you're going to see a lot larger investments in companies that are actually working with real revenue. So I think [the Chaos Labs deal] is an archetype of that.

Diogo Mónica on crypto competition

Photo illustration of Diogo Mónica surrounded by abstract shapes.

Photo illustration: Axios Visuals. Photo: Courtesy of Haun Ventures.

A U.S. court found Nigerian fintech Tingo liable for fraud and imposed a $250 million fine last week.

Why it's the BFD: Following a Hindenberg Research report, the SEC made grave accusations against the company last year, accusing it of inflating the 2022 cash balance for its mobile unit to $461.7 million from $50 million. 

Context: Hindenberg Research first raised concerns about the company in June 2023, with the SEC publishing its charges in December. Tingo apparently failed to respond at all.

Two months later, Tingo filed to voluntarily delist from the Nasdaq with its shares in a tailspin.

Zooming out: "Since ... December 2022, the vast majority of Tingo Group's reported revenues, expenses and assets were fictitious," the SEC lawsuit against the company read.

The intrigue: Tingo CEO Dozy Mmobuosi became well known for attempting to buy English Premier League team Sheffield United in early 2023.

Mmobousi had allegedly used company funds to try to buy the team, taking $16 million in total.

The bottom line: Mmobuosi has also been barred from acting as an officer or director of a public company.

The fintech that wasn't

Illustration of piggy bank wearing a robber’s mask

💰 Zilch reported that it made an operating profit in July 2024, its first-ever month of profit. (CNBC)

🤑 Klarna's adjusted profit rose to 673 million kronor (~$66m) for the quarter ending in June. (Bloomberg)

📈 Affirm shares surged last week after the company reported better-than-expected results and strong guidance. (CNBC)

💳 Credit rating agencies are grappling with how to rank credit-building cards from companies like Chime and Credit Sesame. (WSJ)

🌍 Visa and Revolut teamed up to offer real-time cross-border transactions to Revolut business customers. (Finovate)

💊 Bilt expanded its loyalty rewards program through a partnership with Walgreens. (PYMNTS)

🇸🇬 OKX's Singapore operations received a Major Payment Institution license from the Monetary Authority of Singapore. (Bloomberg)

🤝 Abra settled with the SEC over its Abra Earn product and other charges. (The Block)

🏛️ NFT marketplace OpenSea received a Wells notice from the SEC. (CNBC)

🤔 MakerDAO rebranded to Sky and announced details about its new stablecoin, USDS. (The Defiant)

😞 PrizePool is shutting down its consumer app amid an acquisition. (PYMNTS)

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.

• Bridge, a San Antonio, Texas-based money movement startup, raised $58m from Sequoia Capital, Ribbit Capital, Index Ventures and Haun Ventures. Go deeper

• Shift, an Australian startup providing credit and payments to SMEs, raised an A$35m Series D funding round led by Peak XV Partners. Go deeper

• Ziina, a Dubai-based payments startup for SMEs, raised a  $22m Series A led by Altos Ventures. Activant Capital, Avenir Growth, Fintech Collective, FJ Labs, Jabbar Internet Group, Middle East Venture Partners and Y Combinator also participated. Go deeper

• Comun, a New York-based digital bank focused on U.S. immigrants, raised $21.5m in Series A funding, per TechCrunch. Redpoint Ventures led and was joined by Animo Ventures, Costanoa Ventures, FJ Labs, RTP Global and South Park Commons. Go deeper

• HomeLight, a Scottsdale, Ariz.-based real estate bridge loan startup, raised a $20m Series D extension led by Zeev Ventures, with participation from Stereo Capital and Menlo Ventures. Go deeper

• Axio, an Indian BNPL startup, raised $20m from the Amazon Smbhav Venture Fund. Go deeper

• Edge Matrix Chain, a multichain infrastructure startup, has raised a $20m round led by Polygon Ventures and Amber Group. One Comma, Kapley Judge and Associated Corporations, Cyberrock Venture Fund and Candaq Fintech Group also participated. Go deeper

• Tilt, a real-time fashion shopping app, raised an $18m Series A led by Balderton Capital, with participation from TQ Ventures, Earlybird and Seedcamp. Go deeper

• Hypernative, an Israeli provider of web3 security solutions, raised $16m in Series A funding. Quantstamp led and was joined by Bloccelerate VC, boldstart ventures, Borderless Capital, CMT Digital, IBI Tech Fund, Knollwood Investment Advisory and Re7 Capital. hypernative.io

• Solayer Labs, developer of a Solana restaking protocol, raised $12m in seed funding. Polychain Capital led and was joined by Big Brain Holdings, Hack VC, Nomad Capital, Race Capital, ABCDE and Maelstrom. Go deeper

• SatLayer, a BTC re-staking platform developer, raised $8m in pre-seed funding. Castle Island Ventures and Hack VC led and were joined by Franklin Templeton Digital Assets, OKX Ventures, and Mirana Ventures. Go deeper

• PostEx, a Lahore, Pakistan-based fintech and logistics company, raised a $7.3m pre-Series A led by Conjunction Capital. Go deeper

• Arch Lending, a crypto-backed loan provider, raised a $5m seed round led by Morgan Creek Digital and Castle Island Ventures with participation from Galaxy Ventures and BitGo Ventures. It also secured a $70m loan financing facility. Go deeper

• Quai, a Layer-1 crypto network, raised $5m from Cogitent Ventures, MH Ventures, TPC Ventures, Giga Chad Ventures, and DexCheck. Go deeper

• Chainbound, an Ethereum research firm, raised $4.6m. Cyber Fund led, and was joined by Maven 11, Robot Ventures and Bankless Ventures. Go deeper

• Cercli, a Dubai-based payroll startup focused on the MENA region, raised a $4m seed led by Afore Capital. Y Combinator, COTU Ventures and Rebel Fund also participated. Go deeper

• Linker Finance, a Pasadena, Calif. company that provides mobile and online banking services to community banks, raised a $3.7m seed led by Ten One Ten Ventures and Chingona Ventures. Audaz Capital, Techstars, Commerce Ventures and Bank of Brodhead also participated. Go deeper

• Peregrine Exploration, developer of the Level stablecoin protocol, raised $3.6m co-led by Polychain Capital and Dragonfly. level.money

• Echelon, a decentralized lending protocol, raised a $3.5m seed led by Amber Group, with participation from Laser Digital, Saison Capital, Selini Capital, Interop Ventures and Re7. echelon.market

• Fleet, a commuter benefits manager, has raised $2.5m in seed funding. Congruent Ventures led and was joined by Great Oaks VC, Plug & Play Ventures, Rally Cap and Virta Ventures. Go deeper

• Ark Labs, a digital payments startup, raised a $2.5m pre-seed led by Draper Associates. Fulgur Ventures and Axiom Capital also participated. Go deeper

• Pryzm, a Boston platform for accelerating government contract capture, raised $2m in seed funding. XYZ VC led and was joined by Amplify LA and First In. Go deeper

• Cardboard, an Oslo, Norway-based SaaS subscription management solutions provider, raised €1.9m. Skyfall Ventures led and was joined by RunwayFBU and Sondo. Go deeper

• Approveit, an SF-based operations and automation platform, raised $1m from 10vc, Verras Capital, Telegraph Hills Capital and others. Go deeper

• Warburg Pincus invested $100m into the parent company of options exchange operator Miax. Go deeper

• Cinven offered to buy Minsait Payments from Indra (Madrid: IDR) for between €500m and €600m, per Expansion. Go deeper

• Rentvine, an Estero, Fla., provider of property management software for the long-term residential rental market, raised $74m from Mainsail Partners. rentvine.com

• Clearlake Capital agreed to acquire European-focused credit investment shop MV Credit. Go deeper

• Banyan Software, an Atlanta portfolio company of Norwest Venture Partners, acquired Automated Systems, a Lincoln, Neb., provider of community bank tech solutions. banyansoftware.com

• Iron Creek Partners acquired MoneyThumb, an Encinitas, Calif.-based automated document evaluation company. Go deeper

• TA Associates and Montagu Private Equity acquired Harvest, a French software provider for wealth managers, from Five Arrows. harvest.eu

• Apax Funds agreed to acquire a controlling stake in supply chain risk management firm Veriforce from Thoma Bravo. Terms were not disclosed. veriforce.com

• BenefitHub, a portfolio company of Inverness Graham, acquired Abenity, a Franklin, Tenn., provider of private perks programs. benefithub.com

• Zellis, a portfolio company of Apax Partners, agreed to buy Benify, a Swedish provider of benefits administration software, from Vitruvian Partners. benify.se

• Validus, a Singapore-based digital SME lending platform, secures $50m in debt financing from HSBC. Go deeper

• Summit Partners and Vista Equity Partners hired Deutsche Bank to find a buyer for Trintech, a Plano, Texas-based financial software firm that could fetch $2b (including debt), per Reuters. Go deeper

• Visa is in talks to acquire British fraud-prevention firm Featurespace in a deal that could be worth more than £700m, per Sky News. Go deeper 

• Shift4 (NYSE: FOUR) agreed to acquire Toronto-based gift card and loyalty firm Givex (TSE: GIVX) for C$200m. Go deeper

• DraftKings (Nasdaq: DKNG) agreed to buy Simplebet, a New York-based provider of in-game wagering that had raised funding from such backers as DraftKings, Gaingels and Anti Fund. Go deeper

• Piper Sandler (NYSE: PIPR) completed its purchase of smaller investment bank Aviditi Advisors. Go deeper

• Tabby, a Middle Eastern BNPL firm, agreed to acquire Saudi Arabian digital wallet startup Tweeq for an undisclosed sum. Go deeper

• Alchemy, a web3 infrastructure platform, acquired Romanian blockchain infrastructure provider Bware. Go deeper

• Six Group, operator of the Swiss stock exchange, is considering strategic options for its financial information unit, per Reuters. Go deeper

• Wasoko, a Kenyan e-commerce inventory platform, merged with MaxAB, a Cairo-based B2B food and grocery delivery startup. Wasoko raised around $145m from firms like Tiger Global and Avenir Growth, Quona Capital and 4DX Ventures. MaxAB raised around $100m from such firms as ADQ, British International Investment and Silver Lake. Go deeper

• Axway (Paris:AXW) successfully completed its acquisition of Sopra Banking Software. Go deeper

• Parafi Capital, a crypto venture investor, raised $120m to buy stakes in other crypto funds. Go deeper

• Lemniscap, a crypto-focused venture capital firm, raised a new $70m fund. Go deeper

• Magnetar, an alternative asset manager, closed its Magnetar AI Ventures Fund LP at $235m. Go deeper

Deals!

• Martin Douglass is leaving Morgan Stanley to join Barclays as head of financial sponsors M&A. Go deeper

• Mark Wilson, former CEO of Aviva, joined the board of Zilch. Go deeper

• Adrian Durham, founder and group CEO of FNZ, will step down after 21 years. Go deeper

• Dan Newhall, a founding managing partner at Rise Growth, has departed to launch sell-side investment bank Lone Willow Advisors. Go deeper

• Matt Potere, a former Bank of America executive, joined Happy Money as CEO. Go deeper

• David Singleton, CTO at Stripe, announced he is stepping down after seven years at the company. Go deeper

• Tom Adams, a former Cash App exec, joined Adyen as CTO. Go deeper

• Josh Gordon-Blake, former founder and COO of Pangea, joined MoneyGram as chief digital officer. Go deeper

• Ronald Chillemi, former general counsel at Aven, joined Figure Technology as chief legal officer and corporate secretary. www.figure.com

• Gracie Lin, who previously held positions at the Monetary Authority of Singapore, joined OKX as CEO of its Singapore business. Go deeper

• Piret Loone, former chief business officer and general counsel at Link Money, joined RIA custodian Altruist as general counsel. Go deeper

• Adi Kadle, a Former JP Morgan exec, joined Tandem as director of engineering. Go deeper

• Brian McLaughlin, president of adviser technology at Orion, is stepping down in September. Go deeper

• Jason Mikula, former VP at Goldman Sachs, joined Taktile as head of industry strategy for banking and fintech. Go deeper

• Todd Brockman, former SVP and global head of issuing solutions for Visa Inc. and general manager of Visa DPS, was appointed to the board of The Bancorp (Nasdaq: TBBK). Go deeper

• Albert Gahfi, CEO and co-founder of NewCo Capital Group, was appointed to the Forbes Finance Council. Go deeper

• Fiona McMartin, former assistant specialist underwriter for cyber at RSA, was named associate underwriter in the London office at Coalition. Go deeper

• Jeffery D. Johnson, formerly at Netspend, was named chief revenue officer at Payouts Network. Go deeper

• Jonathan Summerton, former head of payments and money movement at Northwestern Mutual, was named SVP of enterprise commerce at Yuno. Go deeper

• Anderson Thees, managing partner of Redpoint eVentures Brazil, was named CEO of Endeavor Brazil. Go deeper

It's Personnel

🎃 @Lucinda is re-embracing the pumpkin spice trend.

⚾️ @Ryan is still reeling from the Phillies' extra innings walk-off and series win against the Braves.

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 PSL devotees about this newsletter. They can sign up here.

September 03, 2024

1 big thing: Diogo Mónica on crypto competition