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BFD Expert Voices - Private Credit

BFD Expert Voices

Situational awareness: Schwab CEO Walt Bettinger will step down, effective Dec. 31. Rick Wurster, who has been Schwab's president since 2021, will assume the role.

🙏 Please help: Here's the latest from Axios Charlotte on how you can support western North Carolina communities devastated by Helene.

Credit card giant Mastercard announced plans to acquire Minna Technologies, a startup making it easier to cancel subscriptions, for an undisclosed sum today.

Why it matters: Everything is fintech, and every financial company needs to be in tech (and offer more than just payments) to compete with newfangled entrants.

Driving the news: Sweden-based Minna embeds into banking and fintech applications, enabling consumers to manage their subscriptions from within the app.

Minna raised some $27 million in its lifetime from investors including Nineyards Equity, 13books Capital and MiddleGame Ventures.

State of play: The move comes as Mastercard and Visa have each been expanding outside their core payments business. 

Last year, Mastercard acquired Baffin Bay, which offers cybersecurity services to businesses, and this year it agreed to acquire Recorded Futures for $2.7 billion, growing its fraud prevention services.

Last week, Visa agreed to buy cybersecurity firm Featurespace; it bought Tink in 2022. 

Context: Subscription management services emerged as a product in the last decade as companies jumped onto the monthly payment trend.

Several fintechs, including Rocket Money (previously known as savings app TrueBill) and Clarity Money, have made subscription management part of their offering. Apple has a similar service for iOS users.  

DoNotPay was last valued around $210 million in 2021, pitching consumers on its ability to help cancel subscriptions, among other legal issues.

Mastercard buys subscription cancel startup

Illustration of a hand cursor holding four credit cards.

Suma Wealth, a Latino-focused financial education and wellness platform, has raised $3.8 million in seed funding and acquired Mooch, an AI-driven personal finance app, it tells Axios exclusively.

Why it's the BFD: Latinos represent a significant part of the U.S. workforce, but they need better financial wellness tools.

Context: Suma Wealth has built a community-focused media platform and financial tools to help Latinos build wealth.

Its website provides financial education on topics like budgeting, investing and debt management.

Suma also has released an app to help users manage their expenses.

The other side: Mooch built an AI-driven financial wellness app that automated savings and created personalized budgets for its users.

Before the acquisition, Mooch had signed about 100,000 active users, with the average user setting aside about $1,000 a month, according to founder Richard Velasquez.

What's next: The Mooch acquisition is positioned to provide more AI-based financial tools within the Suma app.

Those include an AI assistant to get answers to general money management questions, as well as a budgeting genie and automated savings plans to help users build wealth.

"We're merging the learning and branding of Suma with the execution of actually helping you set your goal," Velasquez says.

"There was a lot of synergy ... and for us, it accelerated our roadmap," Suma CEO Beatriz Acevedo says, adding that instead of a year, it would take three or four months to add new features to the app.

The big picture: According to the Department of Labor, the Latino workforce in the U.S. grew from 10.7 million in 1990 to 29 million in 2020 and is projected to reach 35.9 million by 2030.

Latinos are also expected to account for 78% of all net-new workers between 2020 and 2030.

"We know that this emerging, affluent demographic every single financial institution is desperate to win over ... is one that we've earned their trust," Acevedo says.

Follow the money: Suma's revenue comes primarily from membership plans paid for by employers or brands that want to engage with its users.  

It also makes money through referral fees and educational content.

"The bigger aspiration to continue to grow is our B2B2C subscription, which is our wealth-building membership that costs around $100 a year or $9.99 a month," Acevedo says.

Flashback: Before Suma, Acevedo had previously founded Latino digital media firm Mitú.

Zoom in: As part of the acquisition, Velasquez will join Suma as an adviser to oversee the integration of Mooch's technology into the app.

Radicle Impact led the seed round, which also included investment from ResilienceVC, Acumen, Commerce Ventures, Ascendo Venture Capital and Cooley.

Los Angeles-based Suma Wealth has raised $7 million in funding since being founded in 2020.

Suma Wealth's AI acquisition

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StrataPT, a physician practice management software provider, raised $25 million its first outside equity from Council Capital, CEO Paul Singh tells Axios exclusively.

Why it matters: The complexity of patient billing and coding can lead to mistakes that delay reimbursement and affect revenue.

How it works: StrataPT is a Software as a Service (SaaS) provider that combines electronic medical records, revenue cycle management, billing and collections help into one platform,

The Osprey, Florida-based company caters to physical, occupational and speech therapy practices. 

Singh says StrataPT is profitable, but he declined to disclose revenue and customer details.

By the numbers: Shrinking profit margins pose a significant threat to private practice as physical therapy reimbursement rates in 2023 continue to decline and operating costs rise.

Since 2016, physical therapy reimbursement rates have decreased by more than 10%.

StrataPT has helped practices collect $275 million to date, he says, adding, "There are at least 20,000 PT, OT and/or speech therapy practices within our current wheelhouse."  

Zoom in: The company has been fully bootstrapped up until now, Singh says, and the deal gives Nashville-based Council Capital a minority stake.

What they're saying: As health care providers contend with point solution fatigue, "potential clients are tired of the same old stuff that the industry peddles on them," Singh says.

"It's like when four plumbers come to your house and all say they provide 'the best customer service,'" he says.

StrataPT's platform lets providers offload "a couple third-party vendors and get better reimbursement," he adds.

$25M for health practice management software

Illustration of a folder with a dollar bill sign cut out of it.  

🏹 Robinhood is enabling European customers to deposit and withdraw more than 20 digital currencies through its platform. (CNBC)

🪙 ANZ joined the Monetary Authority of Singapore-led Project Guardian to explore tokenizing real-world assets. (The Block)

👋 Stripe, Block, and other fintech companies are joining a new compliance coalition after a series of failures in the industry. (Forbes)

😠 HSBC wrote off its stake in Monese, a fintech that was once on the verge of unicorn status. (Bloomberg)

🇮🇹 Italy's Banco BPM, Gruppo BCC Iccrea and private equity fund FSI received regulatory approval to create Numia, Italy's second-largest player in the e-payments business, with a 10% market share. (Reuters)

Credit score

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

• Rogo, the maker of an AI for junior financial analysts to draft memos and generate models, raised $18.5m in Series A funding led by Khosla Ventures. AltCapital, Original Capital and Mantis VC also invested. Go deeper

• Airship, a Washington, D.C.-based fintech for the home services industry, raised $4m in pre-seed funding. QED Investors led and was joined by Silence, Lorimer Ventures, Four Acres Capital and Twine Ventures. Go deeper

• Mavik Capital and Axar Capital completed their take-private buyout of XS Financial, an L.A.-based provider of CapEx and equipment financing to midmarket companies. xsfinancial.com

• Bithumb, a South Korean crypto exchange, is reviewing the option to list on the Nasdaq, according to a local report from Daehan Economic. Go deeper

• Mizuho plans to acquire Rakuten Card, the e-commerce company's credit card unit. Rakuten had previously considered restructuring the fintech business. Go deeper

• Freetrade, a London-based online trading platform, agreed to acquire U.K. customers of Australian investing app Stake. Go deeper

• MAI Capital Management, a Cleveland-based RIA, acquired Cincinnati-based Bolan Capital Management. mai.capital

• Stax acquired BlockChyp, a Lindon, Ut.-based maker of a payments gateway. Go deeper

• Restive Ventures is raising up to $70m for its third fintech-focused fund, per an SEC filing. restive.com

Deals!

• John Hinshaw, group COO of HSBC, is stepping down. Go deeper

• CoinFund appointed a Bobby Beniers as a principal investor (previously investment partner at Polychain Capital), George Christopher as a senior associate (previously of Battery Ventures), and Jonathan Rotbard as an associate (previously at Corner Ventures). Go deeper

• Cheri Belski, former global head of product at T. Rowe Price, joined LPL Financial as head of investment management solutions. Go deeper

• Jesse Pollak, development team lead behind Coinbase's Ethereum Layer 2 network Base, was promoted to lead its Coinbase Wallet. Go deeper

It's Personnel

😭 @Lucinda is running behind on her moderator responsibilities.

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 budgeting app users about this newsletter. They can sign up here.

1 big thing: Mastercard buys subscription cancel startup

2. The BFD: Suma Wealth's AI acquisition

3. $25M for health practice management software

4. Credit score

5. Deals!

October 01, 2024

1 big thing: Mastercard buys subscription cancel startup