Adyen, the FinTech giant that is somewhat ignored ??; SoftBank is an elephant that keeps falling over ??; PayPal and the future of commerce ??

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???Hey,?Linas here!?Welcome to a????monthly free edition????of my daily newsletter. Each day I focus on 3 stories that are making a difference in the financial technology space. Coupled with things worth watching & most important money movements, it’s the only newsletter you need for all things when Finance meets Tech.

If you’re not a subscriber, here’s what you missed this week:

1. Credit Suss, or Lehman Brothers 2.0: a new crash coming? ?? ?[deep & solid analysis]
2. Welcome to Apple Bank - your everyday Banking from Apple, NOT a Bank ????
3. Adyen + Tink, or why the future of payments is open ?? ?[& why Open Banking is the Next BIG Thing in FinTech since plastic]
4. The most fascinating charts about BNPL you've probably never seen ?? ?[if you’re in BNPL, FinTech, Credit, Lending, etc., this is a goldmine!]
5. Has crypto died in India? ?? ?[data is both promising & not]
6. Twitter can become the Super App PayPal, Klarna, and Revolut always dreamed of ?? ?[this could be a game-changer!]
7. N26 widening losses show what happens when you don't prioritize compliance?? [lots of lessons for other FinTechs]
8. 3 reasons why Visa should acquire Airwallex ??
9. Banks are crypto companies now ?? ?[we haven’t seen such a move before]
10. Logan Paul and the collapse of the NFT market ??
11. FinTech Winter is coming… its time to bundle up ?? ?[+2 bonus reads how to survive this]
12. Revolut's big e-commerce push and the Super App play ??
13. The real winner of the Crypto Wars is… Mastercard? ??
14. Commerce 2.0: a Social Evolution ????

and more! Don't miss out and join the community here????

October was undoubtedly the hottest, the most exciting, and definitely the most interesting month in FinTech this year so far.?We will look at Adyen, which is the FinTech giant that is somewhat ignored; SoftBank, which is an elephant that keeps falling over; PayPal which shows the future of commerce is unified,?and other interesting news and developments. Oh, and there were lots of them!

Without further ado, let us dive into what happened in the financial technology sector last month. Let’s connect the dots.

Adyen, the FinTech giant that is somewhat ignored ??

The launch ???Amsterdam-based FinTech giant?Adyen?is launching its unified commerce solution in Mexico.

More on this ???FinTech has recently enabled full acquiring capabilities in Mexico, allowing it to offer the platform thanks to direct payment connections to local and global card and banking networks

Merchants that opt for the Adyen payments platform will be able to tap the company’s technology to accept Mexican consumers’ favorite digital payment method — digital wallets, which account for 19% of all payments. Adyen also supports card payments which make up 47% of all transactions in the country.

?? THE TAKEAWAY

Why this is worth talking about? ???We must first remember that Adyen is a European company, and while Europe continues to be a core market for this FinTech, over the years it has grown to become a global payment platform with a strong foothold in North America, as well as other parts of the world. Their most recent move does not only further cement its presence in the region but also proves its global ambitions. Zooming out, it’s important to understand that Adyen has been steadily moving towards becoming the ultimate and global FinTech Platform that wants to centralize its users’ financial needs in a single ecosystem. They have been executing well on this strategy yet have been somewhat ignored. That should change, especially in the current environment, where valuations are collapsing and fundamentals are becoming the lifeblood of many firms. That’s where Adyen should thrive even more. More below:

Adyen + Tink, or why the future of payments is open ??

Adyen is an underrated FinTech Giant. But that might change soon ??

SoftBank is an elephant that keeps falling over ??

An edited version of one of SoftBank’s iconic presentations.

The (bad) news ???The Vision Fund, a venture capital arm of the investing giant?SoftBank, is planning to cut at least 30% of its workforce globally, or circa 150 of the 500 employees, according to a report by Bloomberg.

The news comes nearly two months after I converted ソフトバンク ’s plans to review the organization’s size and structure which involved some potential cost-cutting.

More on this ???It seems that SoftBank is an elephant that’s trapped in a deep valley, and there are simply not enough unicorns to carry it out:

• We can remember that SoftBank recently reported its largest quarterly loss ever.?Its tech-centric Vision Fund lost a whopping $23 billion in Q2 as tech investments turned sour. This follows a loss of $26 billion the previous quarter, which means that the company lost a whopping ~$50 billion this year so far. All their gains since 2017 have now been wiped out.?Ouch???
• SoftBank was heavily invested in?DoorDash, WeWork,?Uber, etc., and almost all these investments didn’t pay off.
• It recently cut the valuation of its portfolio company Oyo to $2.7B (from $10B). The India-based hotel chain startup is months away from its IPO. Another major readjustment came from Klarna - although it raised $800M in new financing in July at a $6.7B valuation, it went massively down from the $45.6B valuation that SoftBank assigned the company a year ago.
• Also, losses were spread?across SoftBank’s portfolio of 400+ companies, including,?DiDi?(the Uber of China), and SEA?super app?Grab, among others. The firm has marked down 284 of its portfolios in the latest quarter, including listed corporations and still-private startups.

Why is this important? ???Massive and growing losses, and now brutal layoffs go on to show again that we’re in a completely different market cycle right now. Just recently, Softbank was one of Europe’s most prolific FinTech investors. Today, it’s an elephant that keeps falling over and indicates that the future of FinTech investments will be totally different. Here’s more on that + the takeaway:

?? THE TAKEAWAY

The future outlook isn’t promising? ???SoftBank is probably the largest example of companies struggling with the economic downturn after flourishing in 2021. More importantly, given how widespread its tentacles are, it’s a good illustration of the market itself. The market cycle has changed and it took SoftBank with it. Cutting the workforce by as much as 30% is yet another proof that SoftBank is massively trimming back on its investments. For context, we can remember that?The Vision Fund approved just $600M in investments from April to June, down from a record $20.6B a year earlier. That’s a massive drop in $$$ employed. Hence, it’s more than clear now that we will probably don’t see any big Fin(Tech) backings from Softbank anytime soon. And the future of FinTech investments will be totally different - more selective, driven by fundamentals and not hype or FOMO, and probably with SoftBank watching from the sidelines. The days of crazy FinTech valuations are probably over. For now.

PayPal is deepening its in-store push, or why the future of commerce is unified ??

The launch ???Payments giant?PayPal?rolled out the PayPal Zettle Terminal in the US after an EU launch last year. For context, PayPal already offers Zettle’s card reader solution in the US.

More on this ???Terminal is an all-in-one point-of-sale (POS) solution for small and medium-sized businesses (SMBs):

• It lets SMBs track stock levels and manage sales, reporting, and payments all in one place.
• The device’s mobility––from its handheld design to its ability to accept payments via a cellular connection––sets it up to attract small and micro-businesses, especially those like vendors at a farmers market without permanent storefronts.

?? THE TAKEAWAY

Why is this important? ???With this move, PayPal has entered a highly competitive POS market. In other words, it’s going head to head against the likes of Block’s Square, Fiserv’s Clover as well as Adyen & Stripe. That will make it increasingly harder for PayPal to capture market share but the terminal’s place in the broader PayPal ecosystem sets it apart from competitors. PayPal is working toward a unified commerce experience for both merchants and consumers. And this is the future of commerce. PayPal gets it, and so should you.

Bonus: PayPal's biggest threat is coming from around the Block & it's called Cash Pay ??

Extra Reads & Quick Bites for Curious Minds??

• The GS Reorg ???Banking giant?Goldman Sachs?is reportedly moving forward with one of the most extensive reorganizations in its 153-year history - and the Wall Street bank’s 4th restructuring in 3 years. The bank is planning to streamline its organization into 3 divisions — investment banking and trading, asset and wealth management, and transaction banking — with consumer banking arm Marcus folding into the wealth unit, the Wall Street Journal reported, citing unnamed sources with insider information.?Goldman currently has 4 businesses — investment banking, global markets, asset management, and consumer and wealth management.?It was inevitable. Read this again:?Goldman Sachs' Marcus shows just how difficult FinTech really is ??
• The oldest bank goes crypto ?? BNY Mellon, the world's largest custodian and America's oldest bank, has rolled out a digital custody platform for safeguarding client holdings in ether and bitcoin alongside traditional financial assets. BNY Mellon formed an enterprise Digital Assets Unit in 2021 to develop solutions for digital asset technology, with plans to launch the industry's first multi-asset platform that bridges digital and traditional asset custody. The bank has been working closely with Fireblocks and Chainalysis to integrate their technology in order to meet the present and future security and compliance needs of clients across the digital asset space.?Yet another illustration that?Banks are becoming crypto companies while crypto companies are becoming banks ??? .

Money Moves??

• Tennis champions?Venus?and?Serena Williams?have invested in European social and community-based investment app?Shares?and been appointed as the company's first brand ambassadors. Shares is a one-stop platform for any investor to make trades, better manage their portfolio, and discuss opportunities with friends and family. The company has garnered over 150,000 users and become the second most downloaded app in the ‘Finance’ category on the App Store and the sixth most downloaded app in the UK since its launch in May 2022. The Williams sisters’ interest in the company comes shortly after Shares closed on a $40M funding round led by Peter Thiel's Valar Fund.?Bonus:?The future of investing is social? Shares thinks so ??
• LHV UK?is to buy the SME lending business of Manchester-based?Bank North, which is winding down its operations after failing to fully capitalize the bank.?Bonus: Lessons from another failed neobank ??

Continue reading by subscribing to?Linas's Newsletter.?You will receive fresh news about FinTech with hot takeaways every day.

P.S.?You might enjoy my earlier pieces as well:

?? The Perfect Pitch Deck: How Coinbase Raised Seed Capital and Began Journey Towards $100B Worth Public Company

???A Wise pitch deck that led to London’s biggest and most successful direct listing ever

?? Lessons FinTechs can learn from Spotify going into audiobooks ??

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About: I am?a business developer, sales professional, FinTech strategist, as well as Cryptocurrency and Blockchain enthusiast. I'm highly passionate about Financial Technology and Digital Innovation, and strongly believe that it will change the world for the better. Apart from my daily job at a global payments startup where I'm leading the company's expansion into Europe, I'm an active member of the FinTech community and a TechFin evangelist.

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