Silicon Valley bank failure offers valuable lessons around the world

welcome to interchangeIf you get this in your inbox thank you for signing up and trusting and voting. If you read this as a post on our site please sign up gentleman You can receive it directly in the future. Mary Ann This week is a well-deserved day off, so I’m going to take her place with the hottest fintech news of the past week. You’re probably wondering what’s going on with your favorite bank. We promise to get there first. Alright, let’s go! — Christine

learned a lot more about The collapse of Silicon Valley Bank Since the last time I read this newsletter (destiny and destiny).

The latest is that SVB Financial Filed for Chapter 11And First Republic Bank caught in all this mess Earlier this week, we reportedly found some saviors in the way some of the country’s biggest banks came together to strengthen their banks. $30 billion relief deposit.

This week, some of my colleagues took a deep dive into the implications for consumers, businesses, banks, investors and others around the world who made deposits with SVB. If anything, it shows how connected the startup ecosystem really is.

Annie Njanja and Tage Kene-Okafor for the scoop African companies affected by the SVB collapse. For example, they spoke to mobile money transfer startup Nala. He was able to withdraw funds from SVB before Nala went bankrupt. Chipper Cash, by contrast, was one of several startups that did not have access to some of the funding at the time.

They point to the heavy use of SVB in the startup ecosystem when it comes to companies that open SVB bank accounts, especially those participating in the US accelerator program, and how potential account holders are looking to join social security. I explained how difficult the process would have been if I didn’t have the number. or an established US address. They also wrote that incidents of this kind, along with existing risky banking options, “enhanced the need to build homegrown solutions” in Africa.

Stephen Deng, co-founder and general partner of DFS Lab, an early-stage VC focused on Africa, said: “What change do you think is that founders have to know how to manage counterparty risk? The mop-up network and financial management are all top priorities.”

Brian Heater, on the other hand, gives founders and investors in the typically capital-intensive industry, robotics, what the implications are for them in terms of future access to capital and continued diversification of funding sources. I was contacted about what it meant.

Playground Global’s Peter Barrett said: On the one hand, now that we have Banklan’s motor memory, things can get messed up. How would an adversary best attack robotics innovation? I’ve seen how devastating a tweet or email can be to unwind a worthy and respected 40-year-old institution. Well-placed capitalized words from a seemingly reputable source can hurt thousands of the most innovative companies, so why bother with cyberattacks?”

That’s right. As you can imagine, all of these are still in development, so stay tuned for more to come.

Moving forward, we are always told in the financial world to diversify our holdings – have money in several different mutual funds or have money in checks and save other money. On TechCrunch+, all this SVB business got Natasha Mascarenhas thinking about how to do this.

With some founders and investors, shesingle point of failureSpecifically, other places where your business can diversify, such as founding teams and succession planning, you need to make sure you don’t put all your eggs in one basket.

Before getting into further news, I would like to mention that while people are withdrawing money from SVB, there are still those who support banks. For example, Brex announced: Deposit $200 million in funds with SVB — withdraw it from other big banks to do so. CNN also reported on others.

weekly news

Some companies that provide banking services to startups have stepped up to provide services and help businesses maintain cash flow after the collapse of Silicon Valley Bank. Mary Ann reported on several companies such as: Lowthe following new customers surged Mercurymoved swiftly over the weekend to launch a new product called Mercury VaultThe product “provides customers with up to $3 million in FDIC insurance through a new product in the wake of the Silicon Valley Bank financial crisis. collapseThis is 12 times the agency industry standard of $250,000 in FDIC insurance offered by other agencies. ’ Then on Friday, the company raised it, announced on twitter “By Monday, Mercury customers will have access to up to $5 million in FDIC insurance, which is 20 times the bank-by-bank limit.”

stripe has been quite active this week. I’ve updated my previous post about Stripe raising additional funding, which Mary Ann was working on. At the time, it was expected to bring in about $2 billion, but instead Stripe ended up with $6.5 billion However, the valuation has been lowered to $50 billion.Series I earnings “will be used to provide liquidity to current and former employees and to meet employee withholding obligations related to equity awards. Stripe shares will be retired to offset the issuance of new shares.” Work with OpenAI Monetize ChatGPT and DALL-E.

Manish Singh reports:PhonePe have Raises another $200 million Movements currently helping it as part of an ongoing round Withdraw $650 million in recent weeks Indian fintech giant Recent departure from parent company Flipkart. walmartPhonePe’s majority owner has invested $200 million in the startup. In the ongoing round, he values ​​the Bengaluru-based company’s pre-money at $12 billion. The startup says it plans to raise up to $1 billion as part of an ongoing round. ”

Natasha Mascarenhas reports: shake off the dust After a week bankruptcy of silicon valleyRumors are swirl About who is going to buy the assets of the beleaguered bank. Some of the top companies urged portfolio managers to: Diversify your assets Banks were collapsing and continue to collapse even though regulators stepped in to ensure all depositors have access to their stored cash. It sounds like a good idea, but actually following that advice is harder than it sounds. ”

according to Siftof Q1 2023 Digital Trust & Safety Index, Buy Now, Pay Later (BNPL) businesses saw a whopping 211% increase in payment fraud in 2022 compared to 2021. The report explored over 34,000 sites and apps and highlighted specific scams scammers are using to steal from his BPNL businesses and merchants. Telegram, for example, has seen a “rapid surge of scammers advertising services they can offer with stolen information,” such as selling fake credit cards and compromised email credentials, he said on the Sift platform. of he is one. In one scheme, Sift confirmed scammers were posting “unlimited access” to her three top BNPL provider accounts for as little as $35.

good byeoffering end-to-end payment capabilities, it said Further evolution of digital authentication solutionswhich combines security and a seamless checkout experience for customers. We were able to increase conversions by up to 7%.

Financing and M&A

Saw it on TechCrunch

Wingspan raises $14 million for all-in-one payroll platform for contractors

This is a new corporate card startup backed by $157 million in equity and debt after Brex and Ramp.

Metaverse payment platform Tilia receives strategic investment from JP Morgan

Indonesia’s Broom builds automated asset-backed financing for used car dealers

Nigerian Credit-Driven Fintech FairMoney Acquires PayForce

and elsewhere

Masttro Secures $43M Growth Equity Investment Led by FTV Capital

Embedded Protection Insurtech Cover Genius Acquires Clyde

Greek Fintech Natech Expands with €10M Convertible Bond Acquisition

Payments infrastructure startup Payabl raises $12 million

Payments Orchestration Startup Apexx Global Raises $25 Million

Chile-Based Recurring Payments Company Toku Raises $7.15 Million

That’s all. I hope you enjoyed that I took over her Mary Ann column.Don’t worry, she’ll be back for her March 26th edition!Have a great week, Christine

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