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Your Bank Is Not Your Best Friend
Plus: $8.9B in Funding for Fintechs and Stripe Acquires Lemon Squeezy
Alejandro Vivanco
July 28, 2024
This week’s lesson is “expect the unexpected”.
In startups, things will always go wrong — especially when you least expect it. This week, a specific set of founders received an email being told that they have 30 days to empty the bank they run operations with. Anybody in their shoes would have an instant heart attack.
If you’re curious about what happened, keep reading.
🍿 Quick Snack
📈 The good news is that fintech deals are still getting done. The bad news is that the number of funded fintech startups is falling.
🤬 Some of Mercury’s customers are furious and not happy with the CEO’s explanation.
📊 Rich people also mismanage their money and CRED wants to solve that.
🖤 +2 Acquisitions
💸 +3 Funding Rounds
🍔 The Full Meal
Fintech Deals Are Still Getting Done
Short and sweet. Here are the most important things you have to know about what happened in Fintech during the last 3 months.
Number of deals fell by 16%, but funding increased to $8.9B (up 19%). However, without the Stripe ($694M) and AlphaSense ($650M) deals, funding would have remained flat.
Q2 2024 | QoQ% | YoY% | |
|---|---|---|---|
# of Deals | 817 | -16% | -23% |
Funding | $8.9B | +19% | +11% |
The average deal size sits at $12.8M (down 4% YoY). Median deal size sits at $4M (up 29% YoY).
30% of the top early-stage deals went to digital asset companies. Access the full list of companies here.
Customers are Furious with Mercury
This week, digital banking startup Mercury announced that it will no longer support business accounts with founders or financial controllers living in certain countries.
The company explained its decision to include Ukraine in the mix by citing that it had become “too complex” to support the country given the enforcement of U.S. sanctions programs.
“To give more context: the number of customers in these countries is very small (<1% of Mercury deposits), but it was putting a lot of strain on our operational teams and all of our financial partners (partner banks, treasury, payments, etc).
We’ve seen the regulatory environment become stricter recently, which has made us change our approach to certain situations.”
Other impacted countries include: Nigeria, Pakistan, Croatia, and the Philippines.
The good news is that Brex quickly stepped in to help founders affected by these changes.
⚡️ Pro Tip: To avoid finding yourself in a situation like this — open 2 bank accounts for your business.
More Money, More Problems.
Even the rich are not immune to poor financial decisions.
70% of India’s affluent population struggles to keep a tight grip on their finances due to fragmentation across multiple platforms.
With the average customer making about 200 transactions a month, you can imagine how this can become an administrative nightmare.
The consequences? poor financial decisions, penalties for late payments, and lower credit scores.
To address this, Indian startup CRED has launched CRED Money, to allow users to consolidate their financial data from all of their accounts onto a single dashboard.
The platform aims to convert this information into brief actionable insights that can assist users identify (1) spending patterns, (2) investment opportunities, and (3) areas for financial optimization.
Here are some screenshots from the app:
🍟 Extra Fries
🖤 M&A Transactions
💸 Funding Rounds
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See you next week!
-Alejandro