Welcome back to The Interchange, where we take a look at the hottest fintech news of the previous week. There was plenty going on as usual — with fintech investors sounding off, payments companies seeing big stock moves and much more.
One other note, you can find Mary Ann on ProWellTech’s Equity podcastwhich she co-hosts every Friday with Alex Wilhelm, including this episode that came out Friday.
If you want to receive The Interchange directly in your inbox every Sunday, head here to sign up!
dLocal and Adyen’s stocks on the move — in different directions
This past week, we saw two global payments companies release earnings with wildly different results. Uruguayan fintech company dLocal saw its stock surge by over 30% on Wednesday alone on the news that the payments outfit had tapped former Mercado Libre CFO Pedro Arnt as its new co-CEO. Shares closed that day up nearly 32% at $20.45, after climbing as high as $24.22 earlier in the day, giving the company a $6 billion valuation.
That surge was on top of an August 15 spike after the company beat earnings estimates in releasing its second-quarter financials. Impressively, dLocal reported revenue of $161 million, up 59% year-over-year and 17% quarter-over-quarter. The company also saw a large jump in profits, reporting gross profit of $70.8 million in the second quarter of 2023, up 43% year-over-year compared to $49.6 million in the second quarter of 2022 and up 14% compared to $61.8 million in the first quarter of 2023.
Earlier this summer, I caught up with dLocal co-founder Sergio Fogel, who rejoined the company in June as co-president and chief strategy officer, per a Bloomberg report, “as part of a push to help regain investor confidence and stabilize the company’s stock after it tumbled following a probe in Argentina and a short seller attack.” You can read the details of that interview here.
By Friday afternoon, shares were trading at just under $20 and the company’s market cap hovered at $5.8 billion.
Meanwhile, shares of Dutch payments processor Adyen sank “to their lowest level in more than three years” on Friday, as reported by Reuters and others. Shares were trading at $872 as of Friday afternoon, down significantly from a 52-week high of $1,763.80. That was after a 39% drop on Thursday, according to CNBC, after the company “reported worse-than-expected sales and a profit drop in the first half of the year.”
Specifically, Adyen notched revenue of $804.3 million in the first half of 2023, up 21% from a year ago but below analyst estimates. According to CNBC, “Adyen attributed the tepid print to increased hiring, firmer wages and to a shift in its North American customers’ business prioritization from growth to cost savings in the first half of the year.” Revenue growth is slowing. In the first half of 2022, revenues climbed by 37% year-over-year. Despite the not-so-great news, Adyen remains one of Europe’s highly valued fintechs, with a market cap of $27.22 billion euros.
Notably, while Adyen has made a heavy push in North America, dLocal has done the opposite — saying that market is already well-served and instead focusing its efforts on emerging markets such as Latin America and Africa.
Mary Ann conducted a survey of six fintech investors, including Index Ventures’ Mark Goldberg, Upfront Ventures’ Aditi Maliwal, GGV Capital’s Hans Tung, TTV Capital’s Lizzie Guynn, Norwest Venture Partners’ Ed Yip and Acrew Capital’s Lauren Kolodny. One of the more interesting findings is that not everyone is going all in on artificial intelligence (AI). In fact, Tung shared that while he is “most excited” about AI, he also believes the sector is the most overhyped, telling ProWellTech: “It is central to the core business in some companies, and in others, it is simply a supporting character.” There are too many other interesting nuggets to share, so check out the full survey results here.
As reported by Jacquelyn Melinek: “Credit cards payments processor Checkout.com is no longer servicing Binance, the world’s largest crypto exchange, a spokesperson from the exchange told ProWellTech. ‘There is no impact on our services and users can continue to use on-and off-ramps as usual,’ the Binance spokesperson added. London-based Checkout.com, which was valued at $40 billion in January 2022, terminated the relationship earlier this month through a pair of letters, according to a report from Forbes.” More here.
Reporter Sarah Perez covered PayPal’s announcement about its new CEO Alex Chriss, who will take the helm of the company in late September. Prior to joining PayPal, Chriss was a long-time employee at Intuit, working his way up to lead Intuit’s Small Business and Self-Employed Group. He replaces current PayPal CEO Dan Schulman, who will remain as part of the company’s board of directors until its next shareholders meeting in 2024. Meet Alex Chriss.
As reported by Tage Kene-Okafor, Mastercard is plunking down some dough to take a minority stake in the fintech division of MTN GroupAfrica’s largest cell phone provider, which it values at $5.2 billion. Both companies are close to signing on the dotted line, and the deal reportedly came about a year after MTN Group began seeking out some investors for the fintech division after it was separated from the company’s main telecom business. Read more.
The Information reported that spend management startup Ramp is raising “several hundred million dollars” at a $5.5 billion valuation in a round led by Thrive Capital. The company last raised in March 2022 — $200 million in equity funding at an $8.1 billion valuation. We expect to have more to share on that front next week. Meanwhile, other spend management players announced new features this week. Brex revealed it has expanded into group events, an unexpected move for a fintech company — but execs say the decision was based after seeing how many off-sites its customers were booking. Mesh Payments announced its own expansion into travel with a built-from-within solution. More on both of those initiatives here.
Bluevine CEO: IPO filing in 18 to 24 months. The company also told ProWellTech via email that it has surpassed over 160,000 active monthly accounts, 500,000 in total customers served, $14 billion in loans delivered and $850 million in checking account deposits. It also said it’s tracking $200 million in 2023 revenue, reflecting 80% year-over-year growth. Bluevine also claims it’s “outpacing the SBA on lending to minority business owners (by ~600% over past 3 years), and indexing 39% higher on minority biz owner bank accounts relative to the % of minorities making up the US adult population.”
Fintech startup Mercury said last week that it is launching a SAFE offering. Via email, the company told ProWellTech: “With VC funding contracting and priced rounds becoming increasingly hard to secure, SAFE agreements are vital tools for bridge round funding. With this new offering, Mercury customers can create, sign, and distribute SAFE investment documents as well as request and track payments for their investment rounds, all through Mercury, for free.” In July, ProWellTech reported on how Mercury has seen a surge in customers in the months after SVB’s implosion.
Spotted on X: Yieldstreet is nearing a deal to buy real estate tech company Cadre. Learn more about Cadre’s growth with some prior ProWellTech coverage.
Look who’s partnering now
Plaid teams with Pinwheel for direct deposit services
Selfbook partners with Affirm to add payment options to hotel bookings
Other things we’re reading
Lending startups seek buyers as rate hikes hobble growth
Chubb predicts bull-run in digital offerings as ‘digital wallet race’ heats up
Marqeta unveils Docs AI question and answer tool
Wealthfront’s stock investing account
Neobank Zolve offers immigrant customers mobile plans
Fundings and M&A
As seen on ProWellTech
BNPL vendor Splitit moves to go private in exchange for fresh funds
Peak XV eyes $50M investment in former Edelweiss executives’ Neo
Finofo secures funding to challenge traditional forex with automated solution
Why Ventura Capital and Peter Thiel are backing this Silicon Valley RIA
Mexican digital bank Klar inks $100M credit facility from VPC
Germantown software firm attracts $156M private equity investment
Paytech Matera acquires Brazilian AI firm Cinnecta for undisclosed sum
Join us at ProWellTech Disrupt 2023 in San Francisco this September as we explore the impact of fintech on our world today. New this year, we will have a whole day dedicated to all things fintech, featuring some of today’s leading fintech figures. Save up to $400 when you buy your pass now through September 18, and save 15% on top of that with promo code INTERCHANGE. Learn more.