Shotgun wedding: UBS buys Credit Suisse for $3.2 billion ??; Meta just lost the NFT game ? ??; Wix continues pushing for unified commerce ??

???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 this week:

1. The rise and fall of Silicon Valley Bank????[a simple breakdown of SVB’s collapse, data-driven takeaways + some thoughts for the future]
2. The ripple effects of Silicon Valley Bank collapse????[biggest winners & losers, lessons to learn & what’s next]
3. OFFICIAL: Stripe halves valuation on $6.5 billion down-round????[we're going to unpack it, and explore Stripe’s latest struggles so we could connect the dots]
4. The push for BNPL regulation is just one click away???? ??
5. ECB brings in yet another massive rate hike???
6. Proof-of-Solvency - the next big thing????
7. Sezzle is having a moment???
8. Stripe’s building the payments foundation for tomorrow’s AI Economy???
9. What Worldcoin is up to?????
10. Web3 Super App????

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

Last week (13-17 March) was the most significant and impactful week in FinTech and Finance in more than a decade.?We will look at UBS buying Credit Suisse for $3.2 billion in the most historic banking?marriage?since 2008 (unpacking it, looking at winners & losers, and more!); Meta that just lost the NFT game (who’s the winner here?); Wix that continues pushing for unified commerce (this is another strong move from Wix!), 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.

Shotgun wedding: UBS buys Credit Suisse for $3.2 billion ??

A lot can happen over a weekend ?? IT?finally happened.?UBS?agreed to take over its longtime rival?Credit Suisse?for more than $3 billion marking the biggest banking deal in years as regulators were eager to halt a dangerous decline in confidence in the global banking system.

瑞信 ended Friday with a market value of around $8 billion. This means that its biggest rival is valuing its equity at a whopping 62% discount ?? A lot can happen over a weekend…

A refresher ???For the perspective, back in 2007, Switzerland's second-biggest bank had a market cap of over $90 billion and was even bigger than 苹果 .

Initially, Credit Suisse was offered $1 billion and has obviously pushed back as it believed the offer was too low and it would hurt shareholders and employees who have deferred stock. Then the offer was increased to $2 billion while the final price tag was agreed to be at over $3 billion.?Still a solid discount!???

Now comes the crazy part.

Swiss authorities had to change the country’s laws to bypass the usual 6-week shareholder vote on the transaction as they rushed to finalize a deal before Monday.

It's a classical example of a shotgun wedding, and it just shows how bad the situation is.

More on this ???The deal between the two Swiss finance giants is the first megamerger of systemically important global banks since the 2008 financial crisis.

As part of the deal, the Swiss government will also provide more than $9 billion to backstop some losses that 瑞银集团 may incur by taking over Credit Suisse. The Swiss National Bank also provided more than $100 billion of liquidity to UBS to help facilitate the deal.

Swiss authorities were under massive pressure to make the deal happen before Asian markets opened for the week since a regulator-led winddown of Credit Suisse could have proven more prolonged and painful for the financial system. First the Europan one, then - the global one. And nobody wanted that.

By the way, here’s something interesting: UBS calls this deal an “acquisition” while Credit Suisse calls it a “merger” ??

?? THE TAKEAWAY

Now what? ???Let’s be clear - a forced marriage of the two titans of Swiss banking was something UBS had never wanted. Yet, it happened and potentially stopped the banking contagion that was initiated by the collapse of Silicon Valley Bank. So who are the winners and losers? The most obvious and biggest winner in all of this will definitely be UBS. Credit Suisse had a $0.5 trillion balance sheet and around 50,000 employees at the end of 2022. After swallowing Credit Suisse, UBS’s balance sheet will hence rival Goldman Sachs Group and Deutsche Bank in asset size. That’s solid!

And that’s it. Now come the losers, and there are quite a few of them. First comes the shareholders - the biggest one is Saudi National Bank (SNB) which already lost $1.5 billion in the last 15 weeks alone. Then, there are AT1 bondholders as all of them have been written to zero in the deal. We must note that the total write-down marked the biggest loss yet for Europe’s $275 billion AT1 market. Finally, regulators lost here too. Finma became the first financial regulator to watch a bank considered systemically important have to be rescued since the financial crisis. The most crucial question then becomes?will it be the last one?

Go deeper & discover more here: History in the making: UBS could acquire Credit Suisse???????[+2 more deeper dives]

Meta just lost the NFT game ? ??

The news ???Meta Platforms?is?winding down NFTs?on?Instagram?less than a year after its launch, CoinDesk reported. The?Facebook?parent company will focus on other ways to support creators and businesses, tweeted Meta head of commerce and financial services Stephane Kasriel.

More on this ???We must remember that Meta , which owns both social media giants FB & IG, had jumped head first into digital collectibles, rolling out this functionality to 100 countries.

However, their efforts have not yet yielded any significant result, and a bear market that has dampened demand for NFTs didn’t help either.

But it’s not alone here.

Even well-known names in the space, such as Coinbase and OpenSea, have struggled to gain traction with their NFT marketplaces. OpenSea, once the world's largest marketplace, has faced challenges due to the ongoing revolt over commission fees and royalties.

What does it tell us? ???This one is obvious - Meta has admitted it lost the NFT game. But there’s more to that, so here’s the takeaway + the proper way of doing NFTs & one big winner out of this:

?? THE TAKEAWAY

Why? ???We must remember that Deutsche Bank had earlier predicted that Instagram could be a game-changer in the NFT market, with the potential to attract millions of users. I have to admit - I had the same view. Yet, it now seems that Meta, which has already invested billions in the metaverse, is hesitant to continue with its NFT offerings and will shift its energy and resources elsewhere (AI? ??). But what’s the root cause though? I think the answer lies in my take from August 2022:

Zooming out, Facebook has been struggling to expand its business beyond social networking, or just ads (as they drive the absolute majority of its revenues). They failed with crypto (Diem/Libra was shut down), Facebook Pay/Payments (including WhatsApp) is somewhat questionable while Facebook Marketplace doesn’t have a meaningful share of the e-commerce sales. Hence, this might be their best shot right now. And it would be foolish not to take it. But there’s one but. It has the brand, the user base, and the eyeballs. But what about trust? That’s something I raised back in March, and it’s still an open question from me here.

Looking ahead, this is a great reminder of what is actually the right approach to do and launch NFTs. Look no further than Reddit, which is crushing it. Also, with Meta now out, Amazon’s upcoming NFT marketplace is the most interesting thing right now. If they do it right, it could really be a game-changer.

Reread: Reddit is crushing the NFT game. Again!???

Amazon's NFT initiative could be the inflection point for Web3???

Wix continues pushing for unified commerce ??

The partnership handshake ???Wix, a leading global SaaS platform, has recently partnered with?Forter, a fraud prevention and detection platform, to strengthen their merchant fraud protection.

More on this ???This partnership is expected to provide Wix merchants with enhanced security and protection against fraudulent transactions. Forter's AI-powered technology will analyze transactions in real time, leveraging machine learning to detect and prevent fraud attempts before they can cause harm.

In light of the increasing frequency and sophistication of fraud attempts in the fintech industry, this partnership is a positive step towards improving merchant protection and customer trust.

?? THE TAKEAWAY

Wix keeps delivering ???This partnership is a massive win for the e-commerce heavyweight.?Forter’s technology can help Wix minimize merchant CNP fraud losses, which are on track to reach $6.9B in the US this year. Improving merchant fraud solutions through Forter can thus help Wix increase its value proposition and tighten merchant loyalty. Furthermore, this move also aligns with the firm’s broader push to improve merchant payment capabilities - we can remember that recently it partnered with Stripe so merchants can use Apple’s Tap to Pay on iPhone tech. Zooming out, this all integrates just brilliantly into Wix’s push to become the ultimate unified commerce platform. Watch them out more closely from now on.

Reread: Wix + Stripe =???

Extra Reads & Quick Bites for Curious Minds??

• ChatGPT vs. Bing ???Artificial intelligence?chatbots will be used as panelists for the first time as part of a conference hosted by the Gillmore Centre for Financial Technology this week. The panel event will be part of a series of workshops conducted over two days at the conference. Organizers will record each of the workshops and feed the text transcripts through OpenAI's ChatGPT and Microsoft's Bing AI to create a report of the two-day event. ChatGPT and Bing AI will also join the discussion and answer audience questions alongside human panelists.?On a more serious note:?Generative AI will completely transform FinTech and Banking over the next 3 years?????
• Cathie from around the Block ?? Cathie Woods’ Ark Invest?added?almost $14M worth of BLOCK stock to three of its funds on Tuesday.?Ark added 159,654 Block shares to its Ark Innovation ETF, 25,783 shares to Ark Next Generation Internet ETF, and 847 shares to the Ark Fintech Innovation ETF, SEC disclosures show. These purchases add to the roughly $6.4 million in BLOCK shares purchased Monday by Ark.?Not surprised at all. Remember:?Cash App is turning into a FinTech beast we've not seen before???

Money Moves??

• Indian mobile payments company?PhonePe?has secured $200M in primary capital from US retail giant Walmart. The investment leaves PhonePe with a market valuation of $12 billion as it looks to break the $1 billion mark in its fundraising efforts. The company has raised $650m to date from various investors and is also in the process of moving the business from Singapore to India, a move expected to make it easier for PhonePe to enter new financial services sectors in the highly regulated Indian market.?Reread: PhonePe raises $350M to turbocharge growth and become a Super App???
• La Famiglia?raises €255M.?The Berlin-based VC plans to split the fresh cash between a?third seed fund of €165M and a new €90M growth fund— its first to back companies post-Series B.
• Stablecoin issuer?ECSA?secured?$3M in funding.

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 10 FinTech predictions for 2023 ??

?? Top banking trends to watch in 2023 ??

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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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