Welcome in Exchange! If you received this in your inbox, thank you for your registration and vote of confidence. If you are reading this as a post on our site, please register here so you can get it directly in future. Each week, I’ll take a look at the hottest fintech news from the previous week. This will include everything from funding rounds to trends to analysis of a specific space to hot opinions about a specific company or phenomenon. There’s a lot of fintech news out there, and it’s my job to stay on top of—and understand—it so you can stay informed. Let’s go! — Mary Ann
Hey, hey — this is going to be a slightly shortened version of this newsletter since Monday the 5th is a holiday here in the US and the news was a little slower than normal last week. But there is no rest for the weary, so here we go!
In Friday’s episode of Stocks PodcastNatasha, Alex and I discussed how small a world this venture community is.
Just hours after the recording on September 1st, we learned of another example of this.
Now executives or founders moving into full-time investment roles is not uncommon. But there were a few things about this news that made our ears prick up.
Earlier this year, Brex reached decacorn status with an increase of $300 million. The tumultuous startup began life offering corporate cards to startups and over time has evolved its model to include “a big boost” in software and serving larger enterprise clients less focus on SMEs and early stage startups. (The move was a bit controversial met with surprise and some disappointment in the startup community.)
Now, if you’re the chief revenue officer of a startup that’s on a growth trajectory, it looks like, well, a little unusual time to go. Especially when Blond is said to be one of the company’s first 20 employees.
Conrad wrote, “At the time, Brex only had a website with reserved seats and less than $100 in sales…four-plus years later, the business is several hundred million dollars in annual revenue.”
Even more notable, however, is that Blond left Brex to join a venture capital firm that is an investor in one of the company’s biggest competitors in the corporate spend space, Ramp.
For the uninitiated, Brex and Ramp have been feuding for years.
Blond told Forbes that he made the decision to start “full-time startup investing” at the beginning of the year. According to the article: “He interviewed with several firms, but ultimately went with the one whose partner, Midas List investor Keith Rabois, helped him break into the local tech scene. “I’ve always been impressed with Keith and the reputation of Founders Fund,” says Blond. “When I decided I wanted to get into VC, it was obvious that Founders Fund was the best option for me to explore.”
I caught up with Blond to get his take on the news through a fintech lens. He was about to board a plane, but we tackled these quick questions and answers:
TC: When exactly did you leave Brex?
SB: I’m still a full-time employee at Brex. My last day as a full-time employee is right before I start at FF. We went out and hired an amazing new CRO, Doug Adamickto replace me and I helped with the transition.
You told Forbes you decided to invest full-time in startups earlier this year. What made you make this decision and how long have you been investing as an angel?
I have been an angel investor for about four years. I decided I wanted to be a full-time VC for several reasons: (a) I really enjoyed angel investing, I learned a lot, and I believe I was able to really help the companies I invested in scale their operations to the storefront. (b) I was able to join two of the fastest growing tech businesses (Zenefits and Brex) with some of the best founders around (Parker, Pedro and Henrique). The combination of (a) and (b) gives me some level of confidence that I will be good in the VC role (picking the right companies and helping them grow revenue). (c) Brex has been a truly amazing experience and the success we have achieved will be difficult to replicate if I join another company. I am ready and motivated for a new challenge.
What will be your focus at Founders Fund? Will you invest in fintech?
Erin Gleason, Head of Communications at Founders Fund, answered this question:
ETC.: Sam will be a generalist investing across stages, sectors and geographies like all our partners, but he is particularly interested in early stage corporate deals.
What do you think about the fact that Founders Fund is an investor in Ramp, one of Brex’s biggest competitors? Is this a problem at all?
I consider Ramp to be a FF portfolio company as a coincidence. This did not affect my motivation to want to join and my focus will be on investing in and helping new portfolio companies. I am very loyal to Brex and everyone I have made close friendships with there.
You were one of Brex’s earliest employees. What do you think about the future of the company?
I am very bullish on the future of Brex. The team is amazing and the strategy with Empower is differentiated and has already had a lot of early success winning larger enterprise clients.
Just how lucrative is the buy now pay later (BNPL) market? asks the TC+ editor Alex Wilhelm. “The new data from Klarna and the latest earnings results from Affirm clearly show that building a global business in the fintech space is far from cheap. The two companies, Affirm American and Klarna Swedish, are among the most valuable players in the BNPL market today. Now both are almost equal in value. Both recently reported financial results.”
Write on TechCrunch Ivan Mehta: “Block’s Cash app (formerly known as Square) now allows users to make payments on e-commerce sites outside of Square’s network. Until now, users could only make payments through Cash App Pay on Square terminals or Square’s online merchant partners. The company has partnered with American Eagle, Aerie, Tommy Hilfiger, Finish Line and JD Sports for the launch with more retailers such as Romwe, Savage x Fenty, SHEIN, thredUP and Wish to follow in the coming months.”
While there were a few interesting financing deals announced out of Africa this week (see the next section for more on them), our man on the ground, Tage Kene-Okaforalso wrote about how Wherea challenger bank based in Nigeria and the United Kingdom, “has joined the ranks of Africa’s tech companies cutting workforces. News of the layoffs, which was first revealed to TechCrunch by sources, was confirmed by Kuda via email, saying that less than 5% of its 450-strong workforce, or about 23 people, were being laid off… Just last August, the digital a bank that provides zero to minimal fees for cards, account maintenance and transfers and is one of Africa’s fast achievers, 55 million dollars.”
Financing and M&A
Seen on TechCrunch
Well, that’s it for this week. Again, thank you for reading! If you are here in the US, I hope you are enjoying this long holiday weekend and getting some rest and relaxation. And if you’re not in the US, I hope you’re still resting and relaxing. xoxoxo, Mary Ann