Robinhood is all in on crypto & global expansion with Bitstamp M&A ??; Joining forces against fraud: Capital One's partnership with FinTech giants ??

?? Hey, Linas here! Welcome 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. The Startup Growth Toolkit: Top 5 Resources to Scale Your Business to New Heights ?? [unlock the secrets to startup success with these essential resources]
2. Apple Intelligence and the future of P2P payments ???? [a holistic view of the most important AI improvements, why they matter & what’s next + a bonus dive into AI-driven Finance & how Apple can dominate here]
3. Monzo’s first profitable year and high-growth opportunities ahead ?? [breaking down the key numbers & what they mean, looking at what’s ahead + a few bonus dives into Monzo]
4. Shopify boosts checkout customization with another FinTech M&A ?? [why it’s a brilliant move + a deeper dive into Shopify & why you should be bullish]
5. Toast: a tasty bet on the restaurant industry's digital transformation ?? [breaking down the key facts & figures, uncovering the most important numbers and insights & why you shouldn’t ignore this FinTech giant + a bonus deep dive into one of Toast’s biggest competitors]
6. Visa is embracing pay-by-bank solutions to enhance payments landscape ?? [what’s the value add + a deeper dive into Visa]
7. Affirm expands BNPL options to capture everyday purchases ?? [why it makes sense + a bonus deep dive into Affirm & why the BNPL giant is poised for solid growth]
8. Cash App and Square: the future of integrated payments ???? [why it matters + a bonus deep dive into Block]
9. BNPL giants turn to debt markets amid rising rates ?? [what this tells us + a bonus dive into PayPal]
10. Texas Stock Exchange aims to challenge NYSE & Nasdaq ????
11. Carta's valuation plunge amid secondary sale & business challenges ??
12. Worldcoin faces EU privacy reckoning ??

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

Last week (3-7 June) was undoubtedly the most interesting week in Blockchain and Cryptocurrency in 2024. We will look at Robinhood which is going all in on crypto and global expansion with the Bitstamp acquisition (why it’s a brilliant move & why it matters + a bonus deep dive into Robinhood and why you shouldn’t ignore this FinTech giant); Capital One joining forces with Adyen & Stripe against fraud (why this is brilliant & why we need more of this + bonus deep dives into Adyen & Stripe), and other interesting news and developments.

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

Robinhood goes all in on crypto and global expansion with Bitstamp acquisition ????

The deal ?? In a big move signaling its ambitions in the crypto space, trading app giant Robinhood just announced plans to acquire European cryptocurrency exchange Bitstamp for around $200 million in cash.

The deal, expected to close in the first half of 2025, marks Robinhood 's largest acquisition to date and first foray into serving institutional clients

Let’s take a quick look at this, see why it’s a brilliant move, and why you should be very bullish on Robinhood going forward.

More on this ?? Bitstamp, founded in 2011, is one of the world's oldest crypto exchanges. While smaller than rivals like Binance and Coinbase, it has built a strong reputation and holds over 50 licenses to operate across Europe, Asia, and the US.

And licenses are the key now as the Bitstamp acquisition will allow Robinhood to greatly expand its crypto offerings internationally, adding many more tokens as well as services like staking and lending.

On top of that, the 4 million users that Bitstamp currently has are primarily in Europe, and that’s another critical piece for Robinhood which is now slowly yet surely expanding on the other side of the Atlantic.

Last but not least, $200 million for 4M users ($50/user, or even $100/user if the data isn’t accurate) is something that any exchange takes that all-day. Big WIN for sure.

Zoom out ?? Looking at the big picture, the move comes as Robinhood's crypto business is booming, with revenue surging over 200% year-over-year in Q1 2024 (more on this - below).

However, it also follows an SEC warning that it may sue Robinhood over its digital asset business. By expanding overseas, Robinhood thus aims to diversify as U.S. crypto regulations remain in flux.

Longer-term, acquiring Bitstamp could transform Robinhood's crypto operations, allowing it to source digital assets directly rather than through market makers. More importantly, Robinhood envisions Bitstamp powering the growth of its crypto arm as it builds an institutional business alongside its popular consumer app.

?? THE TAKEAWAY

What’s next? ?? At the core, this deal underscores the increasing mainstream adoption of crypto and Robinhood's determination to be a major player in the space. With Bitstamp's global footprint, Robinhood has gained a valuable foothold for international expansion as it evolves into a full-fledged financial services provider and a solid challenger to Coinbase. While challenges like regulation remain, Robinhood is making a clear $200 million bet that crypto will be core to its future growth. If you were not bullish on $HOOD before, maybe it’s about time ??

ICYMI: Robinhood Q1 2024: surging growth, profitability, and bright future ahead ?? [unpacking the most important facts and figures & why Robinhood makes a compelling investment case + more bonus dives into Robinhood and its biggest competitor in crypto]

Joining forces against fraud: Capital One's brilliant partnership with FinTech giants ?????

The news ??? Financial services giant Capital One has formed a strategic alliance with payment titans Stripe and Adyen to combat the ever-growing threat of e-commerce fraud.

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

More on this ?? First and foremost, this collaboration marks a significant shift in the traditionally competitive relationship between incumbents and FinTechs, highlighting the importance of collective efforts in tackling industry-wide challenges.

Capital One's innovative solution, Direct Data Share, is an open-source API that facilitates real-time transaction data sharing. By partnering with Stripe and Adyen , Capital One can now act as a data clearinghouse, identifying fraudulent activities across all their payment rails.

This means that if a fraudulent IP address is detected through Stripe, it can be used to prevent fraud for transactions happening at Adyen, and vice versa. Win-win ??

The USP ?? The benefits of this partnership are multifold. Merchants can expect enhanced fraud detection without incurring extra fees, while also experiencing fewer false declines.

Capital One reports that collaborating with these FinTech giants has already resulted in the approval of over a billion dollars' worth of transactions that would have otherwise been declined.

Looking at the big picture, as global e-commerce fraud losses are projected to reach a staggering $343 billion by 2027, this partnership couldn’t have come at a time. By pooling resources and expertise, Capital One, Stripe, and Adyen are setting a powerful precedent for the entire FinTech and finance industry.

Because together everyone achieves more.

?? THE TAKEAWAY

What’s next? ?? Looking ahead, this collaboration could pave the way for more incumbents and fintechs to join forces in the fight against fraud. As digital transactions continue to rise, the need for robust, collective fraud prevention measures will only intensify. The success of Capital One's partnership with Stripe and Adyen may thus inspire similar alliances, fostering a more secure and trustworthy e-commerce ecosystem. Moreover, this partnership underscores the potential for open-source solutions to address industry-wide pain points. By sharing data and insights through APIs, companies can create a more transparent and collaborative environment, ultimately benefiting all stakeholders. And this is really HUGE. Zooming out, as the fintech and finance space continues to evolve, it is clear that cooperation, rather than competition, will be key to overcoming the challenges posed by fraud. Capital One's partnership with Stripe and Adyen therefore serves as a testament to the power of unity in the face of adversity. Brilliant.

ICYMI: Adyen's resilient growth crowned with market selloff: a brilliant buying opportunity for long-term investors? ?? [why the current market selloff is a brilliant opportunity for long-term investors + some bonus deep dives into Europan FinTech superstar]

No IPO soon? Stripe raises $694 million in a share sale ???? [what it’s all about & why IPO won’t happen soon + bonus deen dives into Stripe and their latest numbers]

Extra Reads & Quick Bites for Curious Minds ??

• Freelancers Prefer Crypto and Stablecoin Payments ???? A study by Zero Hash and Lightspark found that 93% of global freelancers want to receive a portion of their income in crypto or stablecoins. The survey of 2,500 freelancers revealed frustrations with traditional payments, including slow payments, high fees, and currency volatility. Freelancers expressed interest in crypto and stablecoin payouts for global client work and subscription services. Almost two-thirds of freelancers would choose stablecoin payouts over local currency. As the gig economy evolves, cryptocurrencies and stablecoins present an opportunity to address challenges and foster a more inclusive ecosystem. Read the whole study here .
• Ria Money Transfer & dLocal Team Up ?? US-based Ria Money Transfer has partnered with cross-border payment platform dLocal to offer improved transfers in Africa, Latin America, and South Asia. The collaboration will leverage both companies' expertise in money remittance and local payments. Millions of people worldwide rely on remittances for financial security and economic development. In 2023, the World Bank reported that remittance flows to low- and middle-income countries reached $669B, a 3.8% growth. dLocal 's Payout solution supports partners like Ria in providing seamless peer-to-peer payouts and remittances. The companies aim to facilitate financial access through secure and seamless money transfers, recognizing the importance of the global remittance market in supporting millions of families, particularly in emerging markets. Remittance flows to South Asia are estimated to have grown 7.2% in 2023, reaching $189B. ICYMI: dLocal weathers short-term headwinds, but emerging markets opportunity remains intact ?? [& why the long-term investment thesis centered around the massive growth potential of emerging markets remains well intact]
• Stripe Shifts to Invite-Only Model in India Due to Regulatory Challenges ????Payments giant Stripe is transitioning to an invite-only model for new clients in India as it builds up the infrastructure to navigate an evolving regulatory landscape. The company has made the "tough decision" for this temporary switch, requiring businesses in India to request an invite to sign up for its services. Stripe states that the regulatory landscape prevents it from guaranteeing a quick launch and easy onboarding for Indian firms, although no specific regulations are mentioned. The company remains strongly committed to India and is working to support more users by the second half of 2025. ICYMI: No IPO soon? Stripe raises $694 million in a share sale ???? [what it’s all about & why IPO won’t happen soon + bonus deen dives into Stripe and their latest numbers]

Money Moves ??

• B2B FinTech company Vegapay has announced the rise of a $5.5M funding round, aimed at accelerating its team expansion and product portfolio development.
• M^0 (pronounced "M Zero"), a decentralized stablecoin minting protocol, has raised $35M in a Series A funding round led by Bain Capital Crypto.
• Slip, a female-founded fintech startup that helps physical stores digitize receipts to unlock customer insights, has raised ￡2.5M. The seed round was led by Adjuvo and joined by Haatch Ventures, Unbundled VC, the Side by Side Partnership, and a range of angels including ASOS’ executive vice president of customer & marketing, Dan Elton, and former CIO at Frasers and former CTO at John Lewis, Julian Burnett.

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 ??

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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.

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