Twitter is officially laying the groundwork for its Super App ??; AmEx is doing fantastic job w Embedded Finance ??; Why the hell Stripe needs $3B? ??
Linas Beliūnas
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Last week (30 January - 3 February) was undoubtedly the hottest week in FinTech in 2023 so far.?We will look at Twitter, which is officially laying the groundwork for its Super App ?? (& why Revolut & Klarna can only dream about it); AmEx which is doing a fantastic job with Embedded Finance ?? (& how they are building the ultimate B2B payments powerhouse); and question why on earth Stripe needs $3 billion ?? (+ a few bonus reads on Stripe), 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.
Twitter is officially laying the groundwork for its upcoming Super App ??
The news ???Twitter?has sought regulatory approval across the US for its new payments architecture that is in the works.
More on this ???Elon Musk, the owner of Twitter , is moving ahead with plans to bring payment functionality to Twitter, bringing another revenue stream to the struggling social media giant. Though the technology will primarily be fiat-focused, it will be built so that crypto-functionality can be added in the future.
As reported by the Financial Times, Twitter has employed a small team to map out the architecture for bringing payments to the platform. The company has also been applying for state regulatory licenses across the US to become eligible for the task, after registering with the US Treasury as a payment processor in November 2022. It hopes to complete US licensing within a year, and then expand internationally.
Elon Musk has previously shown interest in bringing a suite of payment services to Twitter, ranging from peer-to-peer transactions to debit/ credit cards, creating an ‘everything app’ that facilitates payments, commerce, and messaging. It would even allow people to buy products directly through the platform.
?? THE TAKEAWAY
Twitter ?? X App ???We all know that Elon has a habit of shouting his mouth off and speaking loudly about many things. Also, the fact that Twitter might be pivoting to FinTech has been floating for quite some time. Yet, given his firm is filing the relevant applications might suggest there is a seriousness to this idea, and it might have actually started to lay the ground for Elon’s Super App ambitions. Huge, if true.
American Express is doing a fantastic job with Embedded Finance ??
The launch ???Global card issuer and payments processor?American Express (AmEx)?has recently launched?American Express Business Blueprint, a set of digital cash flow management tools for small businesses.
More on this ???Business Blueprint evolved out of Kabbage, an alternative lending startup that the company acquired in 2020. With the launch of Business Blueprint, the Kabbage brand is now retired.
The new service provided by AmEx allows any small business in the US to access personalized cash flow insights to determine smarter financial inclusions, free of cost.?
At the same time, SMEs can access applications to select different financial products, including new lines of credit, and use the products, once approved, to efficiently manage their cash flows and scale their businesses.
Why it matters? ???With this move, AmEx is not only further doubling down on SMEs. More importantly, it shows that the company is doing a brilliant job with embedded finance.
Here’s more on this + the takeaway (& a bonus read on how AmEx is building a B2B payments powerhouse):
SME focus ???At the core, Business Blueprint is all about SMEs and SMEs only. With the launch AmEx thus aims to become a one-stop shop for all small businesses’ financial needs - from helping them to make payments and get paid, to giving them access to working capital, among other things.
Why? ???SMEs are the lifeblood of many economies yet historically, they have been pretty much underserved in most parts of the world (especially the US), with many small business owners claiming it was nearly impossible for them to get loans to scale their organizations. This is exactly where American Express is coming in to bridge the gap.
Also, given the company has a long history of supporting SMEs, this seems like a natural fit. By the way, AmEx is the main business credit card issuer in the US.
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?? THE TAKEAWAY
Focus on embedding finance experiences ???AmeEx’s Business Blueprint illustrates the very best of what embedded finance is all about. The embedded payments hub from the credit card giant will not only help entrepreneurs manage their cash flows, but will also allow them to easily and securely take a loan, pay bills and vendors, send wires, check their bank account balance, make mobile check deposits, accept new card payments, and more.?Given the growth potential here, it’s a very solid play from AmEx:
Zooming out, this perfectly ties into their big strategy - to build the ultimate B2B payments powerhouse. That could be huge.
Why the hell Stripe needs $3 billion? ??
It’s Stripe again ???Just a few weeks after slashing its internal valuation for a third time, Stripe is reportedly in talks to raise as much as $3 billion.
More on this ???Despite that the FinTech told employees last week that it would evaluate a public offering next year, it is now looking to raise from its existing investors at a valuation between $55B and $60B.
While this is a drastic cut from its last raise in early 2021 which valued the company at $95B, it is not too far from its recent internal drop to $63B.
The most recent internal valuation cut of 11% marked the third for the payments giant in the last six months, following a 28% cut last July and a smaller cut again in October.
?? THE TAKEAWAY
Wait, but why? ???In short, the fresh capital would be used to pay tax liabilities associated with employee stock grants. Stripe likely has a large swathe of double-trigger RSUs that will expire if they don’t IPO. Hence, it seems they found some sort of workaround on the liquidity trigger, yet need to pay taxes on all of those RSUs that are now vesting. We must note that stock options are a crucial tool for tech startups to recruit and retain valuable employees, and several veteran members of Stripe have stock units that are set to expire this year. Zooming out, Stripe’s next moves could pave the way for other late-stage, high-value companies grappling with the same problems.
Extra Reads & Quick Bites for Curious Minds??
Money Moves??
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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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1 年Musk is trying hard to save Twitter from insolvency