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BFD Expert Voices - Private Credit

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💸 Situational awareness: Crypto-related complaints accounted for half of all financial fraud losses in 2023, according to the FBI.

Israel-based Aption raised $2.4 million in pre-seed funding for its founder-focused equity management tool, CEO Alon Zieve tells Axios exclusively. 

Why it matters: Venture-backed founders and their executives and early employees often find themselves excessively concentrated in their own equity. 

How it works: Aption creates pools from these equity holders. Each pool is constructed by algorithm to match holders that commit similar position sizes from companies with similar growth metrics. 

"We take on their economics by creating a derivative on their equity," Zieve says. "This minimizes paperwork and keeps cap tables clean."

Matching similar companies in each pool avoids valuation problems — in part by factoring in when the money was raised — and negative selection bias, he adds. The typical pool includes 10-15 companies.

Aption backs each swap and is committed to delivering the stock or cash from exits.

The intrigue: The question of disclosure to the company. Startup equity contracts often provide the company with right of first refusal when an employee seeks to sell their equity. 

"Corporate documents determine [the disclosure] requirement here," Zieve says, "but we always encourage people to speak to their boards and CEOs."

Behind the scenes: In its first year, Aption had 27 positions across pools, and saw two exits. Today, there are nine pools active. 

Zoom in: Recursive Ventures, Motivate Ventures and Carthona Capital led the round, which also included family offices and founders Zieve knew and worked with, including Nir Greenberg, founder of Natural Intelligence. 

What they're saying: The lead investors cited the value this kind of product can offer to venture backed founders and executives. 

"I had a notion that if a founder has created value, they should be able to realize that and invest alongside us," says Motivate Ventures general partner David Wieland. "We couldn't do it because of a tax code issue with an exchange of equity, but Aption gets around that." 

"I have always thought something like this should exist," says Recursive Ventures general partner Itamar Novick. "When I heard how [Aption] thinks about the market, I thought finally someone has put this into action."

"The founders intimately understand the pain points faced by private market participants and possess the necessary skillsets and networks (in Israel and the U.S.) to institutionalize the Aption platform," says Damian Fox, partner at Carthona Capital.

One fun fact: I worked alongside Zieve from 2016-2019, when he was COO at Seeking Alpha and I was executive editor.

Aption provides founder options

Prepaid card startup Pockit is in talks to acquire the consumer arm of Monese, a U.K.-based challenger bank, per Reuters.

Why it's the BFD: With both focused on the underbanked, Monese appears to have previously been the larger company by valuation.

Driving the news: Pockit, which has raised roughly $50 million in its lifetime, would reportedly buy Monese for a "nominal sum" and inject capital into the consumer arm, per the report.

Monese has raised some $200 million in its history and was valued around $500 million at its peak, according to Pitchbook. 

The company split this year, creating the aforementioned consumer arm and a core banking platform dubbed XYB, which initially launched as a subsidiary in 2023.

Between the lines: Monese has struggled to maintain investor confidence in recent years, in sharp contrast to larger players Monzo and Revolut, which have made headlines for raising at higher valuations.

Kinnevik, which owns 21% of the startup, completely wrote down its investment in the company last year.

"We have sought to make large write-downs or write-offs in our portfolio's long-tail of companies where our conviction has come down," Kinnevik's full-year report read. "While there is still significant value in the company, the nature of our participation in its future is uncertain."

Zooming out: At one point in 2020, Monese was reportedly in talks to raise at a valuation over $1 billion.

It last raised around $30 million in September 2022 from HSBC. Pockit last year raised $10 million led by Puma Private Equity.

Pockit and Monese have not responded to requests for comment.

Pockit in talks to acquire U.K. neobank Monese

Illustration of one piggy bank eating another piggy bank.

🏛️ Swedish authorities criticized Klarna over a lack of money laundering and terrorist financing controls. (Bloomberg)

🏧 JPMorgan plans to report customers who exploited the TikTok ATM glitch to officials. (WSJ)

🤝 HSBC is weighing a cost-cutting plan to merge its commercial and investment banking business. (FT)

🇸🇦 Tabby's acquisition of Tweeq has bolstered investors' exit hopes in Saudi Arabia. (Bloomberg)

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

• Form3, a British payment tech startup, raised $60m at a $570m valuation led by British Patient Capital. Other investors include Visa, Goldman Sachs, MasterCard, Barclays, Molten Ventures and 83North. Go deeper

• Versana, a syndicated loan platform, raised $26m from investors including Barclays, Bank of America, Citi, Deutsche Bank, JPMorgan, Morgan Stanley and Wells Fargo. Go deeper

• Twenty7tec, a U.K.-based mortgage application tech company, raised £16.5m from BGF. Go deeper

• PastPay, a Hungarian invoice BNPL company, raised $13.3m in Series A funding. Platina Capital led and was joined by MBH Bank, Advance Global Capital, Quantic Financial Solutions, STRT and BNL Start Partners. Go deeper

• Drip, a Solana-based NFT platform, raised $8m in seed funding led by NFX with participation from Coinbase Ventures and Progression. Go deeper

• IN1, a financial management app for fiat and crypto, raised $6m in seed funding. Go deeper

• Sloneek, a Czech-Slovak HR startup, raised €3.6m led by Purple Ventures, with participation from Venture to Future Fund and Vision Ventures. Go deeper

• Ammalgam, a Singaporean decentralized lending exchange, raised $2.5m in seed funding. Lightspeed Faction and Framework Ventures co-led and were joined by Robot Ventures, Bodhi Ventures, NGC Ventures, DeWhales and Blockchain Founders Fund. ammalgam.xyz

• Avalara, a Vista Equity Partners portfolio company, acquired Hopscotch, a B2B payments startup that had raised over $10m from firms like Noemis Ventures, Stellation Capital, and Shine Capital. gohopscotch.com

• FlapKap, an Abu Dhabi-based SME funding company, raised $34m in debt and equity led by Beco Capital and was joined by investors including Pact VC. Go deeper

• NBT Bancorp (Nasdaq: NBTB) agreed to buy Williamsville, N.Y.-based lender Evans Bancorp (NYSE: EVBN) for $236m. Go deeper

• Nansen, a blockchain analytics firm that has raised about $90m from Accel, a16z and others, acquired Singapore-based staking service provider StakeWithUs. Go deeper

• Akur8, backed by BlackFin Capital Partners, acquired Arius, a property and casualty reserving software. Go deeper

• Outward VC, a London-based investment firm, announced a £51m first close of its Fund II. Go deeper

Deals!

• Ignacio Juliá, former CEO of Spain and Portugal at ING, joined Banco Santander as CEO of Santander Spain. Go deeper

• Anthony Miller was promoted to CEO of Westpac, succeeding Peter King. Go deeper

• Ray Brash, a former Edenred executive, joined CleverCards as COO. Go deeper

• Hope Mehlman, former chief legal officer, general counsel and corporate secretary at Discover, will join Ally Financial as chief legal and corporate affairs officer, effective Dec. 2. Go deeper

• Mary Kay Bowman was named executive vice president, general manager of payments and financial services, at Bill. She was previously head of global buyer, seller and platform product and solutions at Visa. Go deeper

It's Personnel

🌞 @Lucinda is happy temperatures are returning to running-appropriate levels.

👍 @Ryan is keeping the main thing the main thing.

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 football fanatics about this newsletter. They can sign up here.

September 10, 2024

1 big thing: Aption provides founder options