November 3, 2022
Photo: David Paul Morris/Bloomberg via Getty Images
Good morning, and welcome to Protocol Fintech. This Thursday: Vlad Tenev’s plan to rebuild Robinhood, layoffs at Chime, and a16z joins the Ooki DAO fight.
Maybe rising rates are … good, actually? There seems to be more evidence every day that a higher interest-rate environment helps fintechs, particularly those that have acquired charters that let them attract deposits and then lend them out. Even Robinhood (on which Ben Pimentel has more below) saw its interest income rise in the latest quarter. No wonder Binance’s Changpeng Zhao is eyeing banks, as he told Bloomberg in an interview at Web Summit: That’s where the money is.— Owen Thomas (email | twitter)
Robinhood’s earnings report yesterday showed it’s still in a rut. But there are signs that the bleeding that began as the meme-stock and crypto crazes faded has eased dramatically. Now the hip app maker that got young people excited about stock trading on their phones is moving to embrace more traditional, if less thrilling ideas about money and investing.
Users are still a challenge, and crypto is a conundrum. Robinhood, which posted a year-over-year drop in revenue, is still grappling with serious issues: a shrinking user base and a wobbly crypto market.
So Robinhood is trying to reinvent itself. The company cut a lot of jobs, and it’s still focused on controlling costs. But it’s shifting to a growth path different from what made Robinhood, well, Robinhood.
“We don't want to just be a millennial-focused company,” Tenev said. Robinhood wants to serve “every generation” as they “think about opening not their first investing account, but also the first place they deposit their paycheck.” It’s quite a bold vision. But Johnson isn’t totally convinced Tenev can pull it off. Robinhood “offering to handle your retirement would be a bit like Mick Jagger offering to babysit your kids,” he said. “They could be good at it, but it’s not an intuitive fit.”– Benjamin Pimentel (email | twitter)
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Stripe is cutting 14% of its staff. The Collison brothers wrote that the payments company must start "building differently for leaner times."
Opendoor has laid off 18% of its employees. The cuts of about 550 jobs are in response to what CEO Eric Wu called "one of the most challenging real estate markets in 40 years."
Dapper Labs is also cutting its workforce. The company laid off 22% of its staff as the market for NFTs struggles.
Customers are unhappy with changes Walmart is making to the neobank it acquired. Longtime users of One tell Business Insider that Walmart (which acquired One through a subsidiary) has removed popular products with little notice.
A16z has joined the Ooki DAO fight. Andreessen Horowitz wants permission from a federal court to join an ongoing lawsuit that argues the CFTC improperly served the DAO by using a website help bot and forum post rather than individual summons for its members.
Brex is partnering up with Techstars. Techstars accelerator companies can access a variety of benefits from Brex, including a special support team, a sign-up bonus for its program, supper club dinners, and other exclusive events.
Chime has laid off 12% of its staff, or about 160 employees, becoming the latest big-name fintech firm to cut jobs in this year's downturn. A spokesperson confirmed the number of layoffs, which were first reported Wednesday by The Information. "To ensure the long-term success of the business and as we look at current market dynamics, we are focusing our organization to be fully aligned with our company priorities," the company said.
In a memo to staff reported by TechCrunch, co-founder and CEO Chris Britt said the company remained "well-capitalized" and the cuts were among moves to position the company for success "regardless of market conditions."
Chime is a leader among a group of neobanks such as Current and Varo that offer checking accounts and other banking services for people who are unbanked or underbanked. Varo conducted layoffs earlier this year, cutting about 75 jobs, which represented about 10% of its staff.
Read the full story on Protocol.com.— Ryan Deffenbaugh (email | twitter)
Coinbase’s chief product officer is stepping down. Surojit Chatterjee was with the crypto exchange for three years.
Former Google Pay leader Caesar Sengupta has a new fintech startup. Arta Finance has raised $90 million in series A funding to help people launch digital family offices.
Mark Murphy is serving as president of Digital Currency Group. The former chief operating officer was promoted in a restructuring effort that included about 10 layoffs, Bloomberg reported.
Home insurance fintech Kin announced several C-suite appointments. Jerry Fadden is the firm's new CFO; Jessica Jacob the CLO; Effie Kyroudis is CHRO; and Pete Tiwari is SVP of product.
ICYMI: Why Marqeta’s Jason Gardner decided it was time to find a “late-stage co-founder.”
At the #FTAFintechSummit, we’re gathering the most important players in fintech, from founders to policy experts, regulators, and industry leaders. You’ll get access to discussions on the fintech transformations driving competition, breaking down barriers to financial services, and shaping the future of finance.
Thanks for reading — see you tomorrow!