The news this week was dominated by the crypto crash. There was bad news on many fronts with layoffs, problems at Celsius, and a large drop in the value of most crypto tokens. We had plenty of BNPL news and Brex decided they are no longer suited to serve small businesses. Here are what I consider to be the top ten fintech news stories of the past week.
Coinbase CEO says it is laying off 18% of its workers from TechCrunch – This already feels like weeks ago but it was on Tuesday that Brian Armstrong, CEO of Coinbase, said in a blog post that the company will be laying off 1,100 workers, effective immediately, due to the economic downturn.
Celsius Is Crashing, and Crypto Investors Are Spooked from The Wall Street Journal – One of the largest crypto lenders, Celsius, froze redemptions this week and investors realized that their “deposits” with Celsius were, in reality, unsecured loans to the company. More to come on this story. The last public appearance of Celsius CEO Alex Mashinsky was actually at our big NYC event last month – so read our coverage to hear his thoughts then.
Bucking trend, some crypto firms go on hiring spree from Finextra – Some crypto companies are moving in an opposite direction and have announced major hiring initiatives. Binance said it is hiring 2,000 people, OKX says it will increase headcount by 1,500 and Kraken is adding 500 employees.
PayPal expands its ‘pay later’ options with a more flexible ‘PayPal Pay Monthly’ service from TechCrunch – In just two years PayPal has become quite the force in BNPL with 22 million people using their service in the past year. Now, they have expanded beyond the “Pay in 4” model to offer a “Pay Monthly” service for larger loan sizes and longer terms – up to $10,000 and 24 months.
Fintech Giant Klarna Slashes Fundraising Ambition from The Wall Street Journal – We all knew that if Klarna went out to raise money this year it would be at a significantly reduced valuation from the $46 billion of last year. The WSJ is reporting that the new valuation could be as low as $15 billion.
Buy Now, Pay Later Will Get More Than One Bite at the Apple from The Wall Street Journal – Staying with BNPL, shares in the publicly traded BNPL companies such as Affirm, PayPal and Block have traded well below the S&P financials. But maybe these companies have been oversold…
Brex, which started out serving startups, now says it is ‘less suited to meet the needs of smaller customers from TechCrunch – In a somewhat surprising move Brex has announced it is abandoning its small business customers and they have two months to close their accounts and move on. Brex will be focused on enterprise customers going forward.
Proptech, meet fintech: HomeLight raises $60M and gobbles up Accept from The Real Deal – While not exactly a fintech, HomeLight helps streamline the homebuying process, they did report something unusual this week: an up-round. Their Series D extension valued the company at $1.7 billion (up from $1.6 billion last September) and they used stock to make another acquisition in the space.
NYC Mayor Eric Adams Wants State’s Governor to Veto 2-Year Moratorium on PoW Mining: Report from CoinDesk – The New York state assembly passed a bill recently that would impose a two-year ban on “proof-of-work” crypto mining. It has not been signed by Governor Hochul yet and the famously pro-crypto New York City mayor wants her to veto it.
Abra and American Express Partner on Crypto Card from Crowdfund Insider – American Express has been sitting out the crypto rewards trend until now. In their first such offering, they are partnering with Abra to deliver a rewards card with tech developed by i2C.
Every Thursday afternoon, the LendIt Fintech News team and a special guest discuss the news of the week live on LendIt TV, YouTube, LinkedIn, and Twitter. We have now made the show available in podcast format – click on the audio player below.