DONE DEAL: Capital One to acquire Discover for $35B ??; Perfect match: Adyen partners w Billie for B2B BNPL in Europe ??; ETH's critical resistance ??

?? Hey, Linas here! Welcome back to a ?? weekly 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 last week:

1. Nubank delivers strong growth & profitability and is positioned to unlock substantial value for investors ???? [going in deep to analyze NU’s latest performance, the most important numbers, uncover what they mean, & see how NU is perfectly positioned to unlock substantial value for investors + more reads and bonus dives]
2. Monzo nears $5 billion valuation in new funding round ???? [what this signals + bonus reads & deeper dives into Monzo Bank]
3. Mastercard's bringing crypto rewards to emerging world ???? [how the finance giant is doubling down on Africa + a deep dive into Mastercard & their latest numbers]
4. Revolut to launch advanced crypto exchange ?? [why it makes sense + more dives into Revolut]
5. Signing in with Klarna to profitability and hot secondary shares ???? [why it makes sense & how Klarna is playing the long game]
6. PayPal’s first AI investment ???? [why it’s a good deal + bonus read & further dives into PayPal]
7. Ethereum staking and concentration risks ahead of ETF approvals ????

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

Last week (19-23 February) was another massive and super intense week in FinTech. We will look at Capital One officially acquiring Discover for $35 billion (quick recap of why it’s huge + some priceless bonus deep dives); Adyen partnering up with Billie to offer B2B BNPL for European merchants (why it’s a perfect match + a deep dive into Adyen); ETH that faces a critical $3,000 resistance level (what this means & what’s next + some bonus reads), and other interesting news and developments.

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

DONE DEAL: Capital One to acquire Discover for $35 billion ????

The news ??? Following previous reporting that the deal is about to close, Capital One is officially acquiring Discover Financial for a whopping $35.3 billion.

Let’s quickly recap the deal that will create a global payments and finance giant.

More on this ?? Capital One , the US lender backed by?Warren Buffett, is set to buy 发现金融服务公司 ?in a?$35 billion all-stock deal?that will bring together two of the biggest credit card firms and allow them to compete with other Wall Street behemoths.

This is the biggest M&A in 2024 that would create the largest credit lender in the US and the 6th-largest US bank by total assets ??

But that's not it.

This M&A will also give Capital One a foothold in the world of payment networks.

- Discover is a payments network, but it is also a bank.?

- American Express (AmEx) is a network but also a bank.

- Visa & 萬事達卡 are both payment networks, but not banks.?

?? THE TAKEAWAY

Why this matters? ?? With Discover, Capital One would not only become the largest credit lender in the US and one of the largest US banks by total assets. More importantly, given Discover’s unique network, it would also become more akin to AmEx and could hence better compete with the largest payment networks and maybe better challenge the current duopoly. And that's exactly why regulators will likely approve this deal. Massive.

By the way, the market illustrated this very well as Visa shares were down ~1.6% on Tuesday, while shares of Mastercard, which has a bigger exposure to Capital One, were down 3.45%. Discover, obviously, is up +12.3%:

Go deeper here: Capital One nears deal to acquire Discover Financial for $28 billion ??

ICYMI: Visa's strong Q1 2024 results and outlook despite macroeconomic headwinds ?? [analyzing the latest data & graphs & taking a big picture view + some bonus deep dives into Visa]

Strong growth for Mastercard despite macro headwinds ?? [analyzing the latest data & graphs & taking a big-picture view on the stock price + some bonus deep dives]

A perfect match: Adyen partners with Billie to offer B2B BNPL for European businesses ????

The news ??? Netherlands-based payments giant Adyen has partnered with B2B payments company Billie to provide Buy Now, Pay Later (BNPL) services to online shops and marketplaces across Europe.

Let’s take a quick look at this and see why it’s a perfect match.

More on this ?? The partnership will allow Adyen 's merchants to easily activate and integrate Billie 's BNPL solution, enabling business buyers to purchase goods and defer payments for up to 30 days, hence, B2B BNPL.

Billie's BNPL solution thus provides an alternative to high-interest corporate credit cards by offering real-time credit approvals and fraud protection.

At the core, this collaboration aims to help merchants better manage their cash flow by receiving full payment upon shipment while also eliminating risks related to payment defaults and fraud.

On top of that, by offering flexible payment terms, merchants can also expect increased conversion rates and higher order values.

The service is currently available in Germany, Austria, Sweden, and the Netherlands, with plans to expand to France, the UK, and Switzerland in the coming months.

?? THE TAKEAWAY

Looking ahead ?? Adyen + Billie is a perfect example of what FinTech partnerships are all about. A mutual win-win! For Billie, it’s all about distribution and represents a brilliant opportunity to expand its BNPL lending solution to over 400,000 additional European businesses. Meanwhile, Adyen continues to do what it does best - building a single, global payments platform that’s becoming more and more invaluable for global enterprises. Zooming out, as BNPL services continue rapid adoption globally, this collaboration also positions Adyen and Billie at the forefront of modernizing B2B payments. By merging Adyen's seamless checkout experiences with Billie's flexible lending, businesses now have greater choice in how they pay.

ICYMI: Adyen's strong 2023 performance and outlook for continued growth ?? [uncovering the latest numbers and taking the big picture view of Adyen & why it should excite you + some bonus deep dives & analysis]

Also: Ramp going into B2B BNPL is a case study for how FinTech should be done ? ?[bonus: steal their playbook!]

Ethereum faces a critical $3,000 resistance level ????

The news ??? Ethereum's price has seen impressive gains recently, surging nearly 30% in two weeks to hit resistance at the pivotal $3,000 level.

However, breaking this psychological barrier may prove difficult in the near term.

Let’s take a quick look.

More on this ?? The $3,000 resistance level that the second-biggest crypto is currently grappling with is significant. While bullish factors like decreasing supply and staking demand could provide fuel for further upside, technical and sentiment analysis suggests caution may be warranted.

The RSI indicator shows overbought conditions, and excessive optimism from futures traders has raised the risk of long liquidation cascades.

Yet multiple analysts cite the potential approval of a spot Ethereum ETF as a wild card that could drive prices higher. Some estimate 50-80% odds of approval, allowing room for a positive surprise.

Still, Ethereum’s price has shown a strong historical correlation with Bitcoin’s, meaning institutional flows may not be enough to decouple the two if Bitcoin loses momentum.

?? THE TAKEAWAY

Looking ahead ?? Zooming out, Ethereum’s long-term adoption as a foundational blockchain layer rests on far more than speculative price swings. Real-world usage and demand drivers in DeFi, NFTs, DAOs, and Web3 will determine if Ethereum can cement itself as the leading smart contract platform. But regulatory uncertainty and fierce competition from alternative L1s and L2s raise doubts if Ethereum can maintain its first-mover advantage. Its ability to scale with solutions like sharding remains vital to prevent congestion and high fees from hindering future growth. Therefore, the $3,000 level represents a key test of investor conviction in Ethereum's future. Breaking higher could confirm a new bull cycle is underway. But if resistance holds firm, expectations may need to be reset around Ethereum’s core value drivers over hustling for short-term price pops. So watch it out closely!

ICYMI: Ethereum staking and concentration risks ahead of ETF approvals ???? [why staking and concentration risks are in the spotlight now + a bonus read]

Extra Reads & Quick Bites for Curious Minds ??

• Temenos… ?? Temenos shares continued fluctuating after the core banking vendor reported full-year results surpassing guidance but slower 2024 earnings growth forecasts. A recent short seller report from Hindenburg Research alleged "accounting irregularities, failed products and an illusive turnaround", sparking a 33% share plunge, though Temenos disputed the claims. Despite reporting double-digit jumps in Annual Recurring Revenue, software licensing, and Free Cash Flow, Temenos expects just 7-9% 2024 EBIT growth, further hitting its stock price. Non-executive chairman Thibault de Tersant stated confidence in Temenos' controls and promised examination of Hindenburg's allegations. However, activist investor Petrus Advisers called for the departure of interim CEO Andreas Andreades, its prior target. De Tersant said they seek an "exceptional individual" for permanent CEO after a prior near-hire recently fell through. ICYMI: Temenos shares plunge after damning report alleges accounting irregularities and failed products ???? [looking at all the allegations, understanding what they mean and what’s next for Temenos + one bonus read]
• NZ launch ???? UK fintech Revolut has introduced Premium and Metal pricing plans in New Zealand, supplementing its existing Standard offer. Launched in July 2023, the Standard plan now has upgraded alternatives providing additional benefits. The NZD 9.99/month Premium plan doubles withdrawal limits to NZD 700/month. The NZD 19.99/month Metal plan adds travel perks like lounge access and a cashback of up to 0.5% on purchases. It also quadruples withdrawal limits to NZD 1,400/month. Both plans include express delivery and priority support. Revolut New Zealand welcomed the launch for creating new financial experiences for Kiwis. The upgraded plans aim to provide extra value through higher limits, cashback, and travel privileges unavailable in the Standard version. ICYMI: Revolut takes on telecoms with eSIM launch ???? [why this makes sense + some bonus deep dives into a FinTech giant]
• Bitcoin no more ?? Coinbase Commerce has removed support for native Bitcoin and other UTXO-based cryptocurrencies from its merchant payment platform. The company cited challenges in upgrading the protocol to support Bitcoin without smart contracts. Customers can still pay with Bitcoin if they have a Coinbase account, and integration of the Lightning Network is underway to facilitate payments. While some critics raised concerns about impeding Bitcoin adoption, Coinbase expressed optimism about Lightning and layer 2 solutions improving commerce transactions. This comes as Coinbase fights an SEC lawsuit over whether cryptocurrencies are securities, a case that could have major implications for crypto regulation depending on the verdict. ICYMI: Coinbase's Strategic Leap: strong 2023 earnings signal bright prospects for 2024 and beyond ???? [a holistic view at Coinbase focusing on financial performance, market position, strategic initiatives, and potential risks & opportunities to see why their future is brighter than many think]

Money Moves ??

• VC fund Octopus is to grow its shareholding in embedded investment platform Seccl as co-founders Dave Harvey and Hugo Thorman depart the business.
• Permit.io, a full-stack authorisation-as-a-service provider, has successfully closed a Series A funding round, amassing $8M.
• Web3 venture firm Hack VC closed $150M for its first venture fund, aptly called Venture Fund 1. The closed funding brings the firm's total assets under management to $425M.

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:

?? Top Resources for Startup Founders, CEOs, Investors & VCs ??

?? The Future of Finance: 10 FinTech & FinServ M&A predictions for 2024 ??

?? 10 FinTech and Finance stocks to include in your portfolio for 2024 ?? | Part I

?? The Future of Finance: 10 FinTech & FinServ M&A predictions for 2024 ??

***

About: I am a business developer, sales professional, and FinTech strategist, as well as a 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.

If you've enjoyed this piece, don't hesitate to press like, comment on what you think, and share the article with others. Let's spread the knowledge together!

For more, hit the subscribe button, and follow me on LinkedIn & ?? . I'm building the best community the social world has ever seen!????