The big payoff in bill pay
Good morning, and welcome to Protocol Fintech. This Tuesday: bill pay’s big payoff, Cross River’s CEO’s finances and Wall Street’s blockchain plans.
Off the chain
Sam Bankman-Fried’s political ambitions are coming into focus with Tuesday’s Democratic primary contests in New York and Florida. His Protect Our Future PAC is backing candidates like Josh Lafazan in New York and Jared Moskowitz and Maxwell Alejandro Frost in Florida. The FTX CEO’s support of Frost has become a contentious issue in his campaign for a House seat representing Orlando, according to the Orlando Sentinel. Maybe crypto’s support isn’t all it’s cracked up to be, though: The industry-backed Patrick Pihana Branco didn’t get far in his Hawaii House primary.— Owen Thomas (email | twitter)
The payoff in bill pay
Fintech firms focused on consumers are struggling, but business-oriented firms believe they can continue growing by helping corporations be more efficient in digitizing the trillions of dolllars they pay each other every year. Ramp, a corporate card and spend-management startup, launched a new financing option for its bill-pay product Tuesday that will allow customers to stretch — or "Flex" — payments between 30 and 90 days.
The announcement comes a week after Bill.com, which helps small and mid-size businesses digitize invoice payments, announced a nearly 160% quarterly revenue boost that sent its shares soaring on Wall Street. The two companies are players in an increasingly competitive market for corporate spending, where offerings can include charge cards, invoicing software and automated accounting.
There’s a big opportunity in business-to-business payments. Citing data from Visa, Ramp said only about $1.5 trillion out of $120 trillion total is paid through credit or charge cards, which is Ramp’s lead product.
- New York-based Ramp is hoping to serve more of that market by offering short-term financing on invoice payments. "There is a trend that businesses are wanting to put things on card for the convenience or the cash back," said CEO and co-founder Eric Glyman. "But there are cases where it may not be possible. We want to be able to support both."
- Its new Ramp Flex product, which is launching on a limited basis, will cover invoice payments for 30, 60 or 90 days. Ramp pays the vendor the bill and collects the total from its customer after the agreed-upon time frame, plus a variable percentage of the total cost (press materials shared by Ramp showed charges between 1% and 3%). Glyman anticipates that Flex funding could be particularly useful in helping companies manage expenses such as inventory, especially in an era when supply chain delays are common.
Spend management firms like Ramp have a lot of financial fuel to broaden their offerings. The company in March raised a reported $550 million in debt and $200 million in equity at an $8.1 billion valuation. It has raised more than $1 billion total in debt and equity.
- Ramp launched three years ago, focused on corporate cards and spend-management software. The startup introduced its Bill Pay service in October. The firm derives most of its revenue from interchange fees on purchases. But even as companies cut back spending in the face of an uncertain economy, Ramp is betting it can keep growing because firms believe digitizing billing and payment can save costs in the long run.
- Bill.com is making a similar bet on efficiency. It reported a 156% jump in quarterly revenue to $200 million. The San Jose company was able to shrug off reduced business spending in categories such as advertising because of momentum in getting small and mid-size businesses to digitize and automate payments. Bill.com’s total volume of payments sent through its software climbed 46% year-over-year to $61 billion for the quarter.
Ramp competes with Brex, Airbase and Divvy, which Bill.com bought for $2.5 billion last May. To stand out, the fintechs are “trying to own the corporate wallet,” said Robert Le, a fintech analyst with PitchBook.
"It is often hard to wrap your head around how many businesses there really are, and just how much $120 trillion really is. There's small industries, medium, large, fintech," Glyman said. "There are a lot of folks doing a lot of great things in this industry. The competition is good."Read it here.
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On the money
Goldman Sachs and J.P. Morgan remain crypto-curious. Despite the recent crash, Goldman and J.P. Morgan have been quietly working to integrate blockchain technology into their trading systems and other businesses.
The CFPB is taking a close look at the credit card market. Leaders at the Consumer Financial Protection Bureau signaled the agency could crack down on how much card companies charge in interest as consumer debt rises.
Fintechs need to find new funding for loans. Marketplace lenders are searching for long-term investors and funding more loans with deposits as Wall Street sours on their debt. That includes personal-loan company Upstart.
MoviePass II is almost here. But noticeably absent from the company's comeback plan is any mention of the blockchain/Web3 business model that MoviePass co-founder Stacy Spikes detailed earlier this year.
Cross River CEO Gilles Gade described his fintech-friendly bank as crossing the “spiritual river of banking” in an interview with Bloomberg. But he was coy when asked about his personal finances: “God runs my checkbook.”
Lawyers for Nate Chastain, the former OpenSea product manager accused of insider trading, are making a bold argument in his defense: “NFTs are neither securities nor commodities.” So … receipt for a JPEG?
Saudi “buy now, pay later” company Tamara raised $100 million in a series B funding round led by Sanabil Investments. Checkout.com, Shorooq Partners and Coatue also participated in the round. Chief executive Abdulmajeed Alsukhan told Reuters that the region was better positioned for “buy now, pay later” because high oil prices have boosted the local economy.
British payments company Super raised roughly $26.5 million in a funding round led by Accel. The company was founded by Funding Circle co-founder Samir Desai.
San Francisco-based remittances and money-transfer startup Pomelo raised a $20 million seed round led by Founders Fund and A* Capital. Afore Capital, Xfund, Josh Buckley and The Chainsmokers also participated in the round. (For real, though, The Chainsmokers have made more than 30 venture investments, according to Crunchbase.)
Argentinian asset tokenization company Koibanx raised $22 million in a series A funding round led by the protocol Algorand. The company is working on low-code tools that will soon allow people to develop financial products.
Californian crypto trading startup Rocketplace raised $9 million in a seed funding round led by Launchpad Capital. The company, which calls itself “Fidelity for crypto,” also saw investment from Soma Capital, Menlo Ventures, TTV and Accomplice.Jar, an Indian company that helps retail investors save and invest in digital gold, raised $22.6 million in a series B round led by Tiger Global. Folius Ventures, Panthera Capital, Prophetic Ventures and Yes VC also participated in the round.
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How cybercrime is going small time: People have been swindled since before man created monetary systems. These aren’t new crimes; just new ways to commit them. But as cybercrime increasingly goes small-time, those on the front lines will need new and more effective ways to fight it.
Thanks for reading — see you tomorrow!