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🥶 $160M Frozen in Fintech Funds

🥶 $160M Frozen in Fintech Funds

Money Explored
July 14, 2024

👋 Hey Everyone! Welcome to this week’s edition of Money Explored, the essential weekly newsletter to stay ahead in fintech.

From Wall Street to Silicon Valley and the world at-large, we bring you the stories that matter most.

Each week, we focus on 3 major stories shaking industry, plus other stories worth watching and major money moves. It’s all you need to keep up with fintech in one Sunday email.

Now, let's get started with this week's headlines!

🌐 3 Major Stories

Dive into this week’s top Fintech developments.

Apple to Open Up Apple Pay After EU Deal 📱😮 (3 min read)

The Big Story 🗞️: Apple has agreed to let other payment systems use its Apple Pay platform, following a deal with the European Union. The EU was investigating Apple for blocking rivals from accessing its Near-Field Communication (NFC) technology, which is essential for contactless payments. Now, Apple will allow third-party digital wallets to use its NFC technology, which could lead to more competition. This deal means Apple will create new ways to integrate these rival wallets while keeping security and privacy intact. This move is likely to influence similar regulations worldwide.

Key Takeaway ⚡️: This is a big win for consumers and fintech companies alike. By opening up its NFC technology, Apple is not only resolving regulatory issues but also setting the stage for a more competitive and innovative market. This change means more payment options and better services for users, driving growth in the fintech industry. Financial institutions and startups should gear up to take advantage of this new opportunity by developing payment solutions that work seamlessly with Apple’s system.

Expedia, Wells Fargo, and Mastercard Launch "One Key" Credit Cards 💳 (3 min read)

The Big Story 🗞️: Expedia is teaming up with Wells Fargo and Mastercard to launch the "One Key" credit cards. These cards aim to simplify earning and redeeming travel rewards across Expedia’s platforms, including Hotels.com and Vrbo. With three versions available, each card offers different perks and rewards tailored for various travellers. The partnership seeks to enhance customer loyalty by making rewards more straightforward and valuable, especially for frequent travellers.

Key Takeaway ⚡️: The "One Key" credit cards represent a strategic collaboration to grab more market share in the travel and credit card sectors. By integrating a unified rewards system, these cards make it easier for travelers to accumulate and use points, boosting engagement and loyalty. This reflects a broader fintech trend of partnerships aimed at offering seamless, user-friendly financial products. It's a clever move to provide added value and stay competitive in a crowded market.

Synapse’s Collapse Freezes $160M in Fintech Funds 🥶
(4 min read)

The Big Story 🗞️: Synapse, a critical fintech infrastructure provider, has suddenly collapsed, causing nearly $160 million to be frozen from users' accounts. The collapse is due to a mix of poor financial management, increased regulatory scrutiny, and operational failures. Synapse was a backbone for many fintech startups, providing banking APIs and essential services. Now, these startups and their users are left scrambling for alternatives. This situation has exposed significant vulnerabilities in the fintech infrastructure, prompting serious questions about the safety and reliability of such services.

Key Takeaway ⚡️: Synapse’s downfall highlights the urgent need for better risk management and stricter regulatory compliance in the fintech sector. This collapse shows how dependent fintech companies are on third-party providers and how this reliance can quickly become a liability. For fintech startups and users, this is a wake-up call to diversify their service providers and strengthen their backup plans. Moving forward, we can expect regulators to impose stricter controls and monitoring to prevent similar situations. The industry must prioritize building more resilient and transparent infrastructures to protect users' funds and maintain trust.

🔍 What Else We’re Watching

Keep an eye on these evolving Fintech Narratives.

NALA Prepares To Expand Beyond Africa 🌍 (3 min read): NALA, a leading African fintech company, has secured $40 million in funding to grow its consumer business outside of Africa. This investment will help NALA enter new markets and diversify beyond its current remittance services. This expansion shows a growing trend of African fintechs scaling globally, backed by strong investor support. As NALA moves into new regions, it plans to compete with established players by using its deep market knowledge and flexible business approach. This could inspire other African fintech startups to follow suit, boosting innovation and competition worldwide.
SEC Ends Probe into Hiro Systems and Stacks Blockchain 🚀
(3 min read): The SEC has stopped investigating Hiro Systems and the Stacks blockchain, which is good news for the crypto world. This move is a positive sign, making things easier for blockchain companies. Hiro Systems can now keep developing without worrying about legal troubles. This decision might show that the SEC is becoming more friendly towards blockchain, which could boost confidence and encourage more investment. This could lead to wider acceptance and growth of blockchain technology.
BNP Paribas and QuantumStreet AI Introduce Fintech Index in Brazil 📊 (3 min read): BNP Paribas and QuantumStreet AI have teamed up to launch a new fintech index in Brazil. This index aims to track the performance of top fintech companies in the country. By providing a benchmark, it helps investors understand the sector better and make informed decisions. The collaboration highlights Brazil's growing fintech market and the increasing interest from major financial players. This could attract more investments and drive innovation in the region. The index serves as a key tool for both local and international investors looking to capitalize on Brazil's fintech boom.

💸 Major Money Moves

Tracking the big market shifts in Fintech this week.

Bain Capital Drops $4.5B to Snatch Up Fintech Giant Envestnet 💰🤯 (1 min read): Bain Capital is buying Envestnet, a US fintech firm, for $4.5 billion. Envestnet provides financial planning and wealth management tools to over 20 million accounts, and manages $6 trillion in assets for its global clients. This acquisition highlights Bain's push into fintech, aiming to expand Envestnet's market presence and product offerings. The deal, expected to close by year-end, underscores the increasing value of fintech companies and their role in modern financial services. Bain's backing could lead to more innovations in financial technology.
Hebbia Raises $130M, Rockets to $700M Valuation 🚀 (3 min read): Hebbia raised $130 million in Series B funding, boosting its valuation to $700 million. Founders Fund led the round with help from Benchmark and Redpoint Ventures. Hebbia, known for its AI search tech, will use the money to expand its products and team. This investment shows strong market confidence in AI tech's future. With these funds, Hebbia plans to innovate faster and stay ahead in the AI search industry.
JPMorgan and Standard Chartered’s Blockchain Network Raises $60M 🏦 (3 min read): Partior, the blockchain payment network co-founded by JPMorgan and Standard Chartered, has raised $60 million. The funds will help Partior enhance its cross-border payment services, making global transactions faster and more efficient. This investment shows big banks are serious about blockchain's potential.