Software | Biz Builder Mike

MetaBank Announces New Collaborations With Finix & TabaPay

September 22, 2020 by bizbuildermike

MetaBank, N.A. announced on Tuesday the expansion of its payments platform to include processors Finix and TabaPay. According to Metabank, Finix builds payments infrastructure for vertically-focused software providers and fintech companies. With Finix, businesses may own and monetize entire payments experience without having to build an in-house system from scratch or rely on third-party payment service providers.

Meanwhile, TabaPay is a card payments processor for fintech companies who want a simple and comprehensive solution to disburse, collect payments, and fund accounts in real-time. While sharing more details about the partnerships, Sheree Thornsberry, Meta EVP and Head of Payments, stated:

“Consumers are demanding seamless, faster payments across the board, and our partners wanted choices for processing these payments. We responded to that demand with more options than ever before, so that they can help businesses and consumers receive funds efficiently and effectively, all via the processor of their choice.”

Richie Serna, Finix CEO and Co-Founder, went on to add:

“We’re excited to partner with Meta, a leading provider of payments services, to help build out their faster payments platform. Faster payments enable merchants to respond with speed and flexibility to new market demands. With Meta, we will bring speed and innovation to even more businesses and consumers.”

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The Real Lesson of the Snowflake IPO

September 18, 2020 by bizbuildermike

On Wednesday, Snowflake (SNOW) went public in one of the most highly anticipated IPOs ever.

Snowflake is a cloud data platform that helps companies efficiently organize and analyze huge databases. The company’s revenue is growing at a rapid 133% year-over-year rate.

Snowflake’s IPO priced at $120 for a valuation of $33 billion. That alone made Snowflake the most valuable software company ever at the time of their IPO, according to Fortune.

There are two primary problems here for those of us who are “retail investors.” First, only well-connected investors got in at the initial $120 price. Demand for this deal was so high that shares opened to the public at $245 and were trading at $290 at 12:47PM EDT on Wednesday.

So unless they happened to have a connection at a major investment bank or Snowflake, most investors probably didn’t get in at the $120 IPO price. Warren Buffett’s Berkshire Hathaway — and other well-connected firms — invested at that price. But the rest of us didn’t have that option.

The second problem is that on its first day of trading, Snowflake was already valued at more than a $60 billion market capitalization! As a comparison, Twitter currently trades at a market capitalization of $32 billion. It’s true that Snowflake is growing much faster than Twitter. But it also only has a fraction of the revenue which Twitter does and is currently losing a lot more money.

The issue is that this week is the first time most investors will get a chance to buy Snowflake shares. And it’s already worth more than $60 billion. Snowflake is an impressive and disruptive company, true. But at that high of a valuation, there’s only so much upside left (and quite a bit of risk). The biggest gains were already made by Snowflake’s early private investors. The public never got a chance to buy when it was still small.

One more thing. In February of this year, Snowflake raised $479 million at a $12.4 billion valuation from private investors. What could have possibly changed between February and today that made the company 5x more valuable? I believe the spike can only be explained by the bubbly financial environment we’re in today.

Private markets are where tech growth happens

Snowflake isn’t the only hot tech company to IPO at a crazy valuation. Today it’s rare to see any hot tech company IPO at a valuation of less than a few billion dollars. Just take Uber’s IPO at an $84 billion market cap and how Facebook was worth $104 billion when it went public as a couple of examples. Those are monstrously large IPO valuations. And Snowflake is right up there with them.

Nowadays when a really hot tech company goes public, it’s often already a big and mature business. And the majority of investors’ gains were made in private markets.

This is one of the main reasons I continue to invest in private startups. It’s one of the only ways to get access to very fast-growing companies today. Of course, there’s also more risk involved in private markets. But that’s balanced out by the higher upside potential. Startup investing also requires a lot more patience than trading stocks — but in my experience that’s a benefit and not a bug.

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China: WeiyangX Fintech Review

September 12, 2020 by bizbuildermike

CBIRC: Increasing Efforts to Crack Down on New Types of Illegal Commercial Insurance Activities

Recently, the Anti-Illegal Financial Activities Bureau of China Banking and Insurance Regulatory Commission (CBIRC) published an article entitled “Analysis of Illegal Commercial Insurance Activities and Regulatory Suggestions” in “Observation of Insurance Risk”.

As noted in the article, with the advancement of internet technology and third-party payment in recent years, the technical threshold for the establishment of related websites and APP platforms has been greatly reduced. This has led to the rapid development of illegal commercial insurance, and many third-party network platforms of information technology intermediary services are engaged in illegal insurance intermediary businesses. Therefore, in order to better protect the consumers, the article called for clarifying the regulatory body and regulatory standards for these new types of illegal online businesses in the future. (Source: Observation of Insurance Risk)

China’s Digital Economy Reaches ¥35.8 Trillion in 2019

On September 10^th, the Cyberspace Administration of China released the “Report of Digital China Development (2019)”.

According to the report, China’s digital economy registered ¥35.8 trillion ($5.07 trillion) in 2019, accounting for 36.2% of China’s GDP and 67.7% of GDP growth.

The structure of the digital economy continues to be optimized and upgraded, and the added value of industrial digitalization accounts for 80.2% of the digital economy. (Source: Cyberspace Administration of China)

Jniu Technology Completes ¥35 million Pre-A Round of Financing

On September 11^th, smart insurance brokerage service provider, Jniu Technology, was reported to have secured a ¥35 million Pre-A round of financing. The investment was provided by Sequoia Capital China and Eminence Ventures.

Established in 2019, Jniu empowers traditional life insurance companies’ personal insurance and insurance intermediary markets through agent operations, and help establish digital operating systems, distribution systems and supply-chain capabilities. (Source: ebrun)

Lithuania Plans to Establish Bilateral Fintech Cooperation with Hainan Province

On September 9^th, an academic seminar themed “China-Europe Digital Securities and Open Finance” was held in Hainan Resort Software Community (RSC). Officers from Hainan RSC introduced the development of the park and related policies of Hainan Free Trade Port.

The Hainan FTP will offer zero tariffs, low tax rates, simplified taxation and other policy supports for trade, investment, cross-border capital flows, transportation, and safe and orderly flow of data.

Sankauskas Andrius, Senior Commercial Counselor of the Republic of Lithuania in China, said that this is in line with the EU’s policy and the cooperation between the two sides will have a more consistent policy environment.

In April 2021, Lithuania will lead global fintech companies to come to Hainan to participate in the “Hainan Fintech Week”, and plan to establish a bilateral fintech cooperation relationship between Lithuania and Hainan. (Source: Hainan Daily)

The above is a weekly synopsis of the biggest stories on Fintech in China provided by WeiyangX, part of Tsinghua University, in partnership with Crowdfund Insider.

WeiyangX is the most influential website focusing on Fintech in China. The site covers the latest news, industry data analysis, business practices, and in-depth Fintech cases in Fintech. WeiyangX is incubated by Fintech Lab. Founded by Tsinghua University’s People’s Bank of China (PBC) School of Finance in 2012, the Fintech Lab is the first and leading research entity dedicated to leading best practices, promoting interdisciplinary innovation, and encouraging entrepreneurship in the field of fintech through scientific research and innovative project incubation.

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