Robinhood’s moderate IPO ??; Square to buy Afterpay in $29B deal ??; JPMorgan goes all-in into Bitcoin ??

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Last week (2-6 August) was another super hot and interesting week in FinTech.?We will look at Robinhood's moderate IPO, Square's massive acquisition of Afterpay and JPMorgan's Bitcoin game, and other interesting news and developments.

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

Robinhood’s moderate IPO ??

The $HOOD ???Robinhood, the popular stock trading app, became a publicly-traded company itself on Thursday. Yet, the Wall Street investors weren’t exactly falling all over themselves to buy a share at their first opportunity.

The stock price ???Shares of the brokerage app closed down 8.4% on their first day of trading on the?Nasdaq. Robinhood had priced shares at $38 each — the low end of its proposed range — setting an initial valuation of around $32 billion. Shares fell as much as 11% during the day before rebounding a bit. Robinhood had a market cap of around $29 billion at the closing bell — more than double its private-company valuation less than a year ago.?About the same price is at the time of writing today.

Still, billions of returns ???Despite moderate IPO, the public market debut made multibillionaires Robinhood’s young co-founders,? Vlad Tenev?and?Baiju Bhatt, as well as minted hefty returns for its venture backers.

Tenev, Robinhood’s CEO, is worth $2.4 billion after the company sold shares to investors on Wednesday at $38 each, while Bhatt, who was co-CEO until he stepped aside last year, is reportedly worth $2.8 billion.

Index Ventures’ stake in the company is worth roughly $3.4 billion at the IPO price.?Ribbit Capital?alone has a stake estimated to be worth as much as $3 billion, not to mention other backers such as New Enterprise Associates, DST Global, Sequoia Capital,?IVP,?TSG Consumer Partners,?D1 Capital Partners, among others.

?? THE TAKEAWAY

Could $HOOD become a meme stock itself? ???It’s already clear now that Robinhood’s IPO didn’t live up to its hype. As said by Bloomberg, it was?the worst first day of trading ever?for a company that raised such a large pool of capital in its IPO. On the other hand, it might be worthwhile to give the company some time to see how more serious investors are thinking about the stock. On a general level, one can already notice that going public is getting tougher. And if the trend continues as the summer fades, Robinhood’s disappointing debut may be the beginning of the end of 2021’s IPO boom.

Square to buy Afterpay in $29B deal???

Just buy it ???Payments heavyweight?Square?plans to buy Australian Buy Now, Pay Later giant?Afterpay?as it looks to expand further into the booming installment loan market.

Jack Dorsey’s payments company announced the $29 billion, all-stock deal on Sunday evening. The price tag marks a roughly 30% premium to Afterpay’s last closing price.

Shared purpose ???“Square and Afterpay have a shared purpose,” said Square’s CEO Dorsey in a statement. “We built our business to make the financial system more fair, accessible, and inclusive, and Afterpay has built a trusted brand aligned with those principles.”

Shares of?Afterpay?in Australia surged on that news, and closed nearly 19% higher on Monday.

Perspective ???Square has paid >$290,000 for every Afterpay merchant ??

Or $1812 per every Afterpay customer ??

Pretty mind-boggling, when you think about it…

?? THE TAKEAWAY

Payments giant???This combination will create a payments giant unlike any other. At the core, this deal is all about bringing Afterpay's merchants to the Square Seller ecosystem and converting Afterpay's existing customers to?Cash App?users. Australian Buy Now, Pay Later heavyweight serves more than 16 million consumers and nearly 100,000 merchants globally, including major retailers such as?Amazon,?ASOS.com, among others. Adding that to the thriving Square ecosystem would be a huge catalyst for future growth. With 70 million users, Cash App would also get a solid boost in total user base as well as expand its geographic coverage and effectively help to further compete with PayPal's Venmo. BNPL space is hotter than ever before. Awesome times to be in FinTech.

JPMorgan goes all-in into Bitcoin ??

The pitch ???Banking giant JPMorgan Chase began pitching an in-house?Bitcoin?fund to its Private Bank clients for the first time this week. This is somewhat a transformation from the “never-bitcoin” mega-bank to a participant in the digital assets market ??♂?

The fund ???The passively managed fund doesn’t have any investments from clients yet, according to two people familiar with the matter as per CoinDesk. The fund is being offered in partnership with NYDIG, which is the Bitcoin arm of asset-management firm Stone Ridge.

The USP ???The fund, which CoinDesk?revealed?in late April, will be presented to clients as the safest and cheapest Bitcoin investment vehicle available on private markets, the sources said.?

?? THE TAKEAWAY

The transformation ???This move by one of the biggest banks in the world is probably the most famous transformation - from traditional-only to digital-assets first approach - in the history of banking. “I am not a bitcoin supporter, I don’t really care about bitcoin,” Dimon, the CEO of JPM, told the Wall Street Journal in May. “On the other hand, clients are interested and I don’t tell clients what to do.” As always, one has gotta follow the money ??

Extra Reads & Quick Bites for Curious Minds??

• CBI for digital euro ???Central Bank of Ireland Governor Gabriel Makhlouf said that although the eurozone has yet to decide on a central bank digital currency, the development is "very likely" to happen. "In my view, it's not a question of if but rather how and when," the governor wrote in a bank?blog post?on Thursday.
• ARK + $HOOD ???Cathie Wood’s ARK Investment Management snapped up shares of Robinhood Markets, the parent company of a popular stock and crypto trading platform, hours after they made their debut on the Nasdaq exchange. The New York-based investment manager's ARK fund bought 1.3M Robinhood shares. The fund typically invests in tech stocks. Did you buy it? ??
• PayPal to expand crypto coverage?????Global payments platform?PayPal?has announced it is looking towards the UK as the next market in which to expand its crypto trading services.
• London upgrade?????Ethereum’s latest hard fork upgrade dubbed “London” was?officially activated. This backward-incompatible hard fork also marked the rollout of five new Ethereum Improvement Proposals which aim to improve the Ethereum network’s user experience, value proposition, and more.
• Bitcoin tracking from France?????French asset manager Melanion Capital won regulatory approval to?launch?an ETF tracking the price of bitcoin for investors across the European Union. The fund will track a basket of up to 30 stocks with a 90% correlation to bitcoin’s price, according to a statement.

??Money Moves??

• Landis, a US startup that uses technology and data science to help renters reach homeownership, has closed $165M in debt and Series A equity financing.
• Conversational AI chatbot developer?Kasisto?has closed a $15.5M Series C funding round co-led by new investors Naples Technology Vendors and NCR Corporation.
• Spain-based fintech?Ritmo?has secured a EUR 13.8M seed round led by JME Ventures.?The funds will be used to expand into new markets in Europe and Latin America.
• NCR, an enterprise technology provider, has announced a definitive agreement to acquire?LibertyX, a cryptocurrency software provider.
• Kuda Bank?has closed, via its London entity, a Series B of $55M — money that it plans to use to double down on new services for Nigeria but to prepare its launch into more countries on the continent. The funding was made at a valuation of $500M, and it comes on the back of some impressive early growth for the startup.

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

???Cutting Through the Noise: Bitcoin Fundamentals & Why it Was Created

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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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