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A tale of two surveys: Fintech VCs change tune on investment landscape – TechCrunch

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Welcome to The Interchange! If you received this in your inbox, thank you for signing up and your vote of confidence. If you’re reading this as a post on our site, sign up here so you can receive it directly in the future. Every week, I’ll take a look at the hottest fintech news of the previous week. This will include everything from funding rounds to trends to an analysis of a particular space to hot takes on a particular company or phenomenon. There’s a lot of fintech news out there and it’s my job to stay on top of it — and make sense of it — so you can stay in the know. — Mary Ann

What a difference a few months makes. In mid-February, we published a survey of 10 fintech investors with questions on topics such as what areas they are excited about and their outlook for the future. Here we are, not even six months later, and the vibe from the responses of our latest survey — this time of eight fintech investors — is a very different one.

A few examples…

When asked in February what differences in the landscape he saw in 2021 and if deals were much more competitive, Accel partner Ethan Choi responded: “On the investing side, deals were definitely more competitive and valuations certainly reflect that, even despite a correction in public fintech comps.”

And SoftBank Investment Advisers’ managing partner Munish Varma, in response to the same question, said: “The heightened level of funding has increased competition, especially for high-quality companies.”

In July, when asked the same question, Lightspeed Venture Partners’ Justin Overdorff said: “Seed hasn’t changed that much, but Series A and Series B round sizes have definitely compressed. Companies are raising less money at lower valuations than in 2021, which reflects the market sentiment.”

And Avid Ventures’ founder and managing partner Addie Lerner said: “Last year…given very low interest rates, investors were seeking yield anywhere they could find it and paying a premium for growth. Now, in a rising interest rate environment, investors across stages are valuing companies based on fundamentals and prioritizing capital-efficient growth, while looking more closely at public market comps for valuation guidance.”

Bottom line is that earlier this year, the sentiment was more of: “Woo hoo — everything is amazing and 2021 was a stellar year in the world of fintech.” And today, it’s more like: “We’re proceeding very, very cautiously — and you should too.”

I have to say that both my editors and I were very impressed with the thoughtfulness in the responses of these surveys. The VCs who responded — which this time around included Paul Stamas of General Atlantic, Alda Leu Dennis of Initialized Capital, Michael Gilroy of Coatue, Justin Overdorff of Lightspeed Venture Partners, Addie Lerner of Avid Ventures, David Jegen of F-Prime Capital, Nik Milanović of the Fintech Fund, Jay Ganatra of Infinity Ventures — clearly took their time to provide nuanced answers that help give us a better picture of the current fintech investment landscape. In my humble opinion, the quality of the responses along with all the fabulous analysis and overall content consistently produced on TechCrunch+ is well worth the $99/year cost of the subscription.

Weekly News

Starting his career in fintech as a software engineer, Rex Salisbury became a founding member of Andreessen Horowitz’s fintech practice alongside general partners Anish Acharya and Angela Strange before becoming a partner in 2019. During his two years at the firm, Salisbury went on to back the likes of now-decacorn Deel and Tally, two companies he had gotten to know through the Cambrian community he’s built up since 2016. Now he’s launched his own early-stage fund, Cambrian Ventures, out of which he plans to deploy $20 million “to back the next generation of fintech founders” at the angel, pre-seed and seed levels with checks up to $500,000.

Publicly traded Lemonade has laid off about 60 employees of Metromile, the auto insurtech company it recently acquired — adding to the volatility the technology sector has seen over the past 18 months. In an emailed statement, a Lemonade spokesperson told TechCrunch that it was “able to offer a role at Lemonade to about 80% of the Metromile team,” but that as the deal was “synergistic” it is able to “operate with fewer people than were needed to staff the two standalone.” Such staffing cuts are not abnormal in such business combinations, even if that is little comfort to those in eliminated roles. Meanwhile, sources tell me that many employees felt “blindsided” by the move and question whether Lemonade complied with the WARN Act. Those same sources also say that Lemonade required outgoing employees to sign a form with a “non-disparagement” clause. I reached out to Lemonade to ask about all of this, but got no reply.

China’s billionaire tech boss Jack Ma plans to cede control of Ant Group, the fintech powerhouse closely affiliated with Alibaba, the e-commerce giant he founded, the Wall Street Journal reported on July 28. If realized, the move will mark another important turn in Ant’s restructuring and power shuffling since China called off its $35 billion initial public offering nearly two years ago.

Instacart announced on July 25 that the Electronic Benefits Transfer and Supplemental Nutrition Assistance Program (EBT SNAP) can now be used to buy groceries online in 10 additional states through its app. The 10 states are Colorado, Hawaii, Idaho, Louisiana, Montana, New Mexico, Oregon, Utah, Washington and Wyoming. Instacart says Albertsons Companies and Sprouts Farmers Market are among the first to accept EBT SNAP online in these states. For some context on how the program came about in the first place, check out this article I wrote earlier this year.

Cardless announced plans to launch co-branded credit cards on the American Express network. The move follows Amex Ventures’ investment in the three-year-old San Francisco–based startup’s $40 million Series B round that was announced in July of 2021. The company declined to say how much Amex contributed specifically other than to say it was “significant.” Put simply, Cardless aims to help consumer brands launch credit cards “very quickly and easily” by handling the program creation, card underwriting, lending, issuance and customer service for brands.

As we discussed last week, many believe that the modern-era consumer credit score system is broken, locking millions of potential homeowners out of the American dream. Ready Life, a new fintech backed by Figure Technologies, has developed what it describes as a “revolutionary mortgage lending model” that relies on good rental payment history to qualify buyers for home purchases. “We are rewriting the rules for homeownership,” says Ready Life CEO Ashley D. Bell, a corporate finance attorney and a former White House policy advisor for Entrepreneurship and Innovation, in a press release. When the Ready Life platform launches this fall, consumers who pay their rent on time using the Ready Pay Visa Debit Card will qualify for mortgages without a credit score review, the company says.

Earlier this year, Apple revealed a new buy now, pay later feature, Apple Pay Later, that has reportedly now drawn the attention of the Consumer Financial Protection Bureau (CFPB), reports 9to5Mac. According to the publication, CFPB director Rohit Chopra said that Apple Pay Later raised “a host of issues,” with antitrust concerns. The Financial Revolutionist points out that “while Apple’s move into BNPL will leverage the Apple Pay network and Apple’s reach through hardware to scale quickly, this combination of software and hardware is what makes Apple Pay Later a potential privacy risk.”

Payments giant PayPal finally has attracted an activist in Elliott Management, a $50 billion hedge fund, reported the Wall Street Journal and Barron’s. The latter publication says, “PayPal had been a pandemic-darling as households increasingly shopped online but shares have slid more than 60% this year as people returned to their pre-pandemic spending habits. Earlier this year, the company cut its 2022 earnings forecast, which led to the company’s worst one-day selloff in its history as a publicly traded company.” PayPal’s valuation has tanked to $89 billion from $350 billion over the past year. Why should we care? Well, according to the Financial Revolutionist, If Elliott’s activist-investor takeover succeeds, then the hedge fund has several strategies at its disposal to correct the course at PayPal.”

Visa and Mastercard’s earnings are good indicators for the economy as a whole, according to Moody fintech analyst Peter Krukovsky, who wrote via email: “Card networks Visa and Mastercard are a terrific broad barometer of economic activity, and the strength of Visa’s US transaction flows in the June quarter and in July indicates sustained solid consumer demand. While the demand effect of higher interest rates may build over time, continued strong trends at the card networks point to sustained growth trends for the payment processing industry.”

After Brex’s controversial announcement that it would no longer work with SMBs, it has now tapped San Francisco–based startup Oxygen “to provide their small business customers a smooth transition.” Last November, TC’s Manish Singh had reported that Oxygen — a digital bank aimed at freelancers and small businesses — was reportedly raising funds at a $500 million valuation.

Speaking of spend management, Ruth Foxe Blader, partner at Anthemis Group; Eric Glyman, co-founder and CEO of Ramp; and Thejo Kote, founder and CEO of Airbase will talk about balancing runway and growth onstage at TechCrunch Disrupt on October 18–20 in San Francisco. For more details, head here. P.S. Hope to see you there!

Alternative investment platform Yieldstreet has appointed Timothy Schott to serve in the newly created role of chief financial officer. In a press release, the company said that Schott’s “expertise in a wide range of finance and business functions, as well as his significant capital markets and M&A experience, positions Yieldstreet for continued customer growth and long-term success.” When asked if this meant the company was eyeing the public markets, a spokesperson told me via email: “No plans! Tim’s just been brought on board to build out the infrastructure so the company can scale.”

There is no doubt that the COVID-19 pandemic has made it less common for people to use cash to pay for their everyday purchases. Because of hygiene and social distancing measures, merchants who used to frown upon letting customers pay small amounts by card are now encouraging contactless transactions. And with many outdoor activities simply out of the question, cash was more often hoarded than it was spent. Now it appears that contactless payments are here to stay.

Looking at Latin America’s socioeconomic conditions these days, you can find plenty of reasons to be pessimistic or at least daunted by how much is left to improve. Sure, problems are also opportunities, but what if there are just too many hurdles to overcome in the near future? And yet, despite the worsening global and local macroeconomic climate, unicorns keep being minted in the region. Here’s why Clocktower Technology Ventures remains bullish on the region’s fintechs.

Viber, the messaging app owned by Japanese e-commerce giant Rakuten, has long been dancing around the area of fintech, launching services like money transfer and chatbot payments in various countries over the years. Now it is making a move to double down on that strategy: It’s launching Payments on Viber — a new service that will let users set up digital wallets tied to their Viber accounts.

Funding and M&A

Balance raises $56M to tip the one-click checkout scales in favor of B2B merchants

Sequoia backs fintech Dbank in maiden Pakistan investment

Pogo lands millions to become the ‘Honey for the real world’

You can’t afford a house, but you can probably afford Nada

Fintech Guava raises $2.4M to provide banking services to Black small business owners

With over $3B in AUM, Portage Ventures targets $750M for its first late-stage fintech fund 

PSA: Startup Battlefield 200 Applications close soon. Apply today to join Startup Battlefield 200 for the chance to exhibit your startup for free at TechCrunch Disrupt this October and win the $100,000 equity-free prize. Applications close August 5.

One more thing, be sure to listen to fellow fintech enthusiasts Alex Wilhelm, Natasha Mascarenhas and I riff on a bunch of industry news in last week’s Friday edition of the award-winning Equity podcast.

With that, it’s time for me to go. Thank you for reading and may you have a wonderful week ahead. I can’t believe it is nearly August already. Where has the summer gone? xoxo, Mary Ann

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Investment regulator imposed $14M in enforcement penalties in latest fiscal year

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TORONTO — Canada’s investment product regulator says it imposed more than $14 million in fines and other financial enforcements in its last fiscal year.

The Canadian Investment Regulatory Organization (CIRO) says the total also includes imposed costs and the forced return of ill-gotten profits.

The regulator says it also ordered suspensions and permanent prohibitions in a significant proportion of proceedings against individuals.

Enforcement efforts included a $2 million fine against Fortrade Canada for recommending a high-risk product to unsophisticated retail clients, and a $1.7 million fine and permanent ban on securities-related business against Paul Walker for a range of misconduct including soliciting more than $1.5 million in investments for an outside business activity.

CIRO was created at the start of 2023 through a combination of the Investment Industry Regulatory Organization of Canada and the Mutual Fund Dealers Association of Canada.

The new self-regulatory organization says it is focused on harmonizing its regulatory approach to create more consistency and timeliness with enforcement action.

This report by The Canadian Press was first published July 16, 2024.

The Canadian Press

 

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Conditions on Simandou investment now satisfied

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LONDON, July 15, 2024–(BUSINESS WIRE)–All conditions have now been satisfied for Rio Tinto’s investment to develop the Simandou high-grade iron ore deposit in Guinea, including the completion of necessary Guinean and Chinese regulatory approvals. The transaction is expected to complete during the week of 15 July 2024.

Along with the recent approval by the Board of Simfer1, this allows Simfer to invest in and fund its share of co-developed rail and port infrastructure being progressed in partnership with Winning Consortium Simandou2 (WCS), Baowu and the Republic of Guinea.

More than 600 kilometres of new multi-use trans-Guinean railway together with port facilities will allow the export of up to 120 million tonnes per year of mined iron ore by Simfer and WCS from their respective Simandou mining concessions in the southeast of the country3. Together, this will be the largest greenfield integrated mine and infrastructure investment in Africa.

Rio Tinto Executive Committee lead for Guinea and Copper Chief Executive Bold Baatar said: “We thank the Government of Guinea, Chinalco, Baowu and WCS for their partnership in reaching this milestone towards developing the world class Simandou project.

“Simandou will deliver a significant new source of high-grade iron ore that will strengthen Rio Tinto’s portfolio for the decarbonisation of the steel industry, along with trans-Guinean rail and port infrastructure that can make a significant contribution to the country’s economic development.”

Under the terms of the transaction, Simfer will acquire a participation in the WCS project companies constructing rail and port infrastructure, commit to perform a portion of the construction works itself and commit to funding its share of the overall co-developed infrastructure cost, in an aggregate amount of approximately $6.5 billion (Rio Tinto share approximately $3.5 billion)4.

Chalco Iron Ore Holdings Ltd (CIOH) has now paid its share of capital expenditures incurred or required by Simfer to progress critical works up to completion. A first payment of approximately $410 million, for expenditures until the end of 2023, was made on 28 June 2024, and a second payment of approximately $575 million, for 2024 expenditures, was made on 11 July 2024. These amounts settle all expenditures incurred up to date.

The co-developed infrastructure capacity and associated cost will be shared equally between Simfer, which will develop, own and operate a 60 million tonne per year5 mine in blocks 3 and 4 of the Simandou Project, and WCS, which is developing blocks 1 and 2.

Under the co-development arrangement, Simfer and WCS will deliver separate infrastructure scopes to leverage expertise. Simfer will construct the approximately 70 kilometre Simfer spur rail line and a 60 million tonne per year transhipment vessel (TSV) port, while WCS will construct the dual track approximately 536 kilometre main rail line, the approximately 16 kilometre WCS spur rail line and a 60 million tonne per year barge port.

Once complete, all co-developed infrastructure and rolling stock will be transferred to and operated by the Compagnie du Transguinéen (CTG) joint venture, in which Simfer and WCS each hold a 42.5% equity stake and the Guinean State a 15% equity stake6.

First production from the Simfer mine is expected in 2025, ramping up over 30 months to an annualised capacity of 60 million tonnes per year5 (27 million tonnes Rio Tinto share). The mine will initially deliver a single fines product before transitioning to a dual fines product of blast furnace and direct reduction ready ore.

Simfer’s capital funding requirement for the Simandou project as a whole is estimated to be approximately $11.6 billion, of which Rio Tinto’s share is approximately $6.2 billion, broken down as follows.

US dollars in billions (nominal terms) Simfer

capex

  Rio Tinto
share
Mine and TSVs, owned and operated by Simfer
Development of an initial 60Mt/a mine at Simandou South (blocks 3 & 4), to be constructed by Simfer $5.1 $2.7
Co-developed infrastructure, owned and operated by CTG once complete
Simfer scope (funded 100% by Simfer during construction)

Rail: a 70 km rail-spur from Simfer mine to the mainline, including rolling stock
Port: construction of a 60Mt/a TSV port

$3.5 $1.9
WCS scope (funded 34% by Simfer during construction)

Port and rail infrastructure including an approximately 552 km trans-Guinean heavy haul rail system, comprised of a 536 km mainline and a 16 km WCS rail spur

$3.0 $1.6
Total capital expenditure (nominal terms) $11.6 $6.27

Rio Tinto’s share of expected capital investment remaining to be spent from 1 January 2024 is to be $5.7 billion. Rio Tinto’s expected funding requirements for 2024 and 2025 are included in its share of capital investment guidance for this period, with project funding expected to extend beyond this timeframe.

Further details on the Simandou project can be found in the 2023 Investor Seminar presentation at https://www.riotinto.com/en/invest/investor-seminars.

As Chinalco, Baowu, China Rail Construction Corporation and China Harbour Engineering Company are Chinese state-owned entities, and given Chinalco indirectly holds 11.2% of shares in the Rio Tinto Group, they, and WCS, may be considered to be associates of a related party of Rio Tinto for the purpose of the UK Listing Rules. Rio Tinto’s funding commitment pursuant to the infrastructure co-development arrangement (Rio Tinto share $3.5bn) is a smaller related party transaction for the purposes of Listing Rule 11.1.10R and this announcement is, therefore, made in accordance with Listing Rule 11.1.10R(2)(c).

___________________________
1 Approval has been granted by the Board of Simfer Jersey Limited, a joint venture between the Rio Tinto Group (53%) and Chalco Iron Ore Holdings Ltd (CIOH) (47%), a Chinalco-led joint venture of leading Chinese SOEs (Chinalco (75%), Baowu (20%), China Rail Construction Corporation (2.5%) and China Harbour Engineering Company (2.5%)). Simfer Infraco Guinée S.A.U. will deliver Simfer Jersey’s scope of the co-developed rail and port infrastructure, and is, on the date of this notice, a wholly-owned indirect subsidiary of Simfer Jersey Limited, but will be co-owned by the Guinean State (15%) after closing of the co-development arrangements. Simfer S.A. is the holder of the mining concession covering Simandou Blocks 3 & 4, and is owned by the Guinean State (15%) and Simfer Jersey Limited (85%).
2 WCS is the holder of Simandou North Blocks 1 & 2 (with the Government of Guinea holding a 15% interest in the mining vehicle and WCS holding 85%) and associated infrastructure. WCS was originally held by WCS Holdings, a consortium of Singaporean company, Winning International Group (50%) and Weiqiao Aluminium (part of the China Hongqiao Group) (50%). On 19 June 2024, Baowu Resources completed the acquisition of a 49% share of WCS mine and infrastructure projects with WCS Holdings holding the remaining 51%. In the case of the mine, Baowu also has an option to increase to 51% during operations. After Closing, Simfer will hold 34% of the shares in the WCS infrastructure entities during construction with WCS holding the remaining 66%.
3 WCS holds the mining concession for Blocks 1 and 2, while Simfer S.A. holds the mining concession for blocks 3 and 4. Simfer and WCS will independently develop their mines.
4 A true-up mechanism will apply between Simfer and WCS to equalise most of their costs of constructing the co-developed rail and port infrastructure. The figures shown here are pre-equalisation.
5 The estimated annualised capacity of approximately 60 million dry tonnes per annum iron ore for the Simandou life of mine schedule was previously reported in a release to the Australian Securities Exchange dated 6 December 2023 titled “Simandou iron ore project update“. Rio Tinto confirms that all material assumptions underpinning that production target continue to apply and have not materially changed.
6 Ownership of the rail and port infrastructure will transfer from CTG to the Guinean State after a 35 year Operations Period, with Simfer retaining access rights on a non-discriminatory basis and at least equivalent to all Third Party Users.
7 By the end of 2023, Rio Tinto spent $0.5 billion (Rio Tinto share) to progress critical path works. Rio Tinto’s share of expected capital investment remaining to be spent from 1 January 2024 was $5.7 billion.

This announcement is authorised for release to the market by Andy Hodges, Rio Tinto’s Group Company Secretary.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240621382292/en/

Contacts

Please direct all enquiries to media.enquiries@riotinto.com

Media Relations,
United Kingdom
Matthew Klar
M +44 7796 630 637
David Outhwaite
M +44 7787 597 493

Media Relations,
Australia

Matt Chambers
M +61 433 525 739
Jesse Riseborough
M +61 436 653 412
Alyesha Anderson
M +61 434 868 118
Michelle Lee
M +61 458 609 322

Media Relations,
Americas

Simon Letendre
M +1 514 796 4973
Malika Cherry
M +1 418 592 7293
Vanessa Damha
M +1 514 715 2152

Investor Relations,
United Kingdom
David Ovington
M +44 7920 010 978
Laura Brooks
M +44 7826 942 797

Investor Relations,
Australia

Tom Gallop
M +61 439 353 948
Amar Jambaa
M +61 472 865 948

Rio Tinto plc
6 St James’s Square
London SW1Y 4AD
United Kingdom
T +44 20 7781 2000
Registered in England
No. 719885

Rio Tinto Limited
Level 43, 120 Collins Street
Melbourne 3000
Australia
T +61 3 9283 3333
Registered in Australia
ABN 96 004 458 404

riotinto.com

Category: Simandou

 

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BlackRock Pulls Ad Featuring Trump Rally Shooter Thomas Matthew Crooks

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A screengrab of Thomas Crooks from the BlackRock ad that aired in 2022.

Thomas Matthew Crooks, the 20-year-old who shot at former president Donald Trump at a rally in Pennsylvania, had briefly appeared in a 2022 advertisement for BlackRock Inc, the world’s largest money manager.

The ad, filmed at the Bethel Park High School in Pennsylvania, featured Crooks and several other unpaid students in the background, said the investment giant in a statement. Crooks graduated from the school in 2022.

BlackRock said it has pulled the ad but the video will be available to authorities. The ad, however, is being widely shared by social media users.

“The assassination attempt on former President Trump is abhorrent. We’re thankful former President Trump wasn’t seriously injured, and thinking about all the innocent bystanders and victims of this awful act, especially the person who was killed,” the company added in its statement.

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BlackRock, whose earnings figures are expected today, has faced scrutiny after shooting incidents since some of its index funds own shares in gunmakers.

Trump Assassination Attempt

Trump survived an assassination attempt on Saturday after a gunman opened fire at him at a rally in Pennsylvania ahead of the Presidential elections. The attack left him with a bloodied face as the former president said the bullet pierced his “upper part of right ear”.

Latest and Breaking News on NDTV

A bystander died in the attack while shielding his family and Crooks – a registered Republican – was shot dead by a Secret Service sniper.

Trump, whose Republican candidature will be finalised today, shared a message of unity after the attack and said Americans must not allow “evil to win”. “It was God alone who prevented the unthinkable from happening,” he said on social media.

Biden, too, appealed to the nation to “lower the political temperature” in a rare Oval Office address. “Politics must never be a literal battlefield, God forbid a killing field,” he said.

The US markets are expecting Trump trades to gain momentum after the attack. It has already been pinning hopes for the return of Republicans, especially after Biden’s poor performance in last month’s debate. Those trades are likely to take deeper hold as the attack sparks a wave of sympathy and support for Trump.

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