Welcome to TechCrunch Fintech (formerly The Interchange)! In this edition, I’ll look at the latest wave of Brex layoffs, the state of fintech investment in 2023, and much more! I may take some time off in the coming weeks, but fear not, TechCrunch Fintech is not going away. We will be back soon!
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The big story
What goes up must come down. For expense management startup Brex, this was the case for its workforce. While interest rates were low, the company experienced an increase in business and venture capital money was easier to come by. Its workforce had grown to around 1,300 before laying off workers in October 2022. As things have come back down to earth, Brex is trying to reset, announcing this week that it has cut 282 employees, or nearly 20% of its workforce, in the framework of restructuring. . The move follows reports that the company burned through $17 million in cash each month during the fourth quarter and is trying to preserve its runway.
Analysis of the week
Fintech, oh, fintech. Last year wasn’t easy for you. Fintech investors pumped $34.6 billion into startups across 2,055 deals in 2023, down -43.8% and -32.4% year-over-year, respectively, according to PitchBook data . Valuations have also largely fallen, with a median of $19.4 million, down 13% from the 2022 median. Exits have also plunged, with only $5.9 billion in exit value generated on 185 transactions in 2023, a decrease of –76.1% and –22.3% year-on-year, respectively. But the fourth quarter was good. According to CB Insights, fintech saw eight new unicorns during the period and equity funding increased by double-digit percentages.
Dollars and cents
Bilt Rewards, whose platform aims to let consumers earn rewards on neighborhood rent and everyday spending, announced last week that it had raised $200 million at a valuation of $3.1 billion. General Catalyst led the financing, which more than doubled the New York-based company’s valuation from its $150 million raise in October 2022. The rise and rise in valuation is impressive in an environment where Mega-rounds (deals worth more than $100 million) are rare. CB Insights’ State of Venture Report 2023 found that while mega-rounds “were a feature of 2021, with more than 350 taking place each quarter. . . in the fourth quarter of 2023, this figure fell to just 78, the lowest level since 2017.
What else do we write
Swedish fintech company Klarna has announced its first subscription plan, “Klarna Plus”, for $7.99 per month, offering benefits such as no additional service fees when using the One Time Card from Klarna, double rewards points and access to exclusive discounts from popular brands.
A new list compiled by GGV US highlights 50 fintech startups that venture capitalists consider hot news. We also spoke with Hans Tung, Managing Partner of GGV, about what he is seeing in the industry today.
PayPal will begin testing a few new updates to its service, some of which will take advantage of AI-based personalization. The company is launching a new “CashPass” cash back offer called “Smart Receipts”, with, among other things, personalized recommendations.
Other very interesting titles
Rainbow raises $12 million
Sequence raises $5.5 million in funding
Sunbit Secures $310M Debt Warehouse Led by Citi
Public investment platform launches options trading and pays clients for their orders
FinZi, the Colombian fintech company, has been acquired by Girasol Payment Solution
BillingPlatform Secures $90 Million Growth Equity Investment From FTV Capital
Plaid CEO’s Fintech Predictions
Follow me on @bayareawriter for the latest fintech news, coffee articles and more.
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