Daily Tearsheet: Extend CEO on running an SMB-focused fintech in a downturn, Plaid adds crypto to its network, and the 2022 DataDay Guide
- Fintechs like Extend are targeting SMB market, looking to partner with banks and try to change the system from the inside.
- And Plaid's new crypto functionality allows consumers to connect their crypto wealth to their personal finance applications.
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“We have no intention of going away from the banks”: Extend CEO Andrew Jamison on running an SMB-focused fintech in a downturn
The SMB sector is sort of a middle child – simple like a consumer, but with the complexity of a business.
This middle market segment has been overlooked by the traditional financial services industry, and fintechs are still trying to figure out how to serve this segment profitably, as this sector operates on fairly small margins and there’s a lot that can happen on the loss side.
Extend is one such fintech that is targeting this market.
Extend’s CEO Andrew Jamison told Tearsheet, how the fintech is selling software, and its clients are banks across the US. Instead of targeting the SMB sector by offering an alternative to traditional banking services, Extend took a different approach – it decided to try and fix the system from the inside.
Plaid amps up crypto portability by adding leading exchanges to its network
Around 145 million Americans, or 56% of the nation’s adult population, report having owned a cryptocurrency at some point. Furthermore, as equity markets crash and inflation soars, 46.5 million Americans who’ve never owned crypto in the past seek to buy some next year.
As an increasing amount of American wealth is now held in crypto, Plaid is adding leading exchanges to its network, allowing consumers to connect their crypto wealth to the fintech apps they use. The firm bridge the data portability gaps between Web3 and mainstream digital finance.
The 2022 Guide to DataDay
When Tearsheet first introduced the DataDay Conference three years ago, the issue of screen scraping was a major discussion point. This year, it was barely mentioned. The evolution toward direct data sharing agreements, APIs, and tokenization has expanded the industry’s aperture toward enabling new use cases.
Here's Tearsheet's DataDay Guide 2022 to learn about:
- the companies, technologies, and products powering today's financial data industry
- how financial data and open banking help FIs keep up with customer demands
- bank-fintech partnerships and how they're getting more important
- and more...
Just look at the charts
1. The 15 biggest down-rounds of 2022
2. A significant proportion of consumers are using BNPL as their financing option
PayPal is the boss in the SMB lending sector
PayPal didn’t offer precise quarterly origination figures for its “Working Capital” loan product, but it did reveal total originations since 2013 -- 1.3 million loans for a total of $25.6 billion across the US, UK, Australia, and Germany. Though there is an international component, the totals are higher than rivals OnDeck and Square Capital over the same time period. The company’s SMB lending operations draw little attention given that its payment business, which includes Venmo, is so massive. (deBanked)
Amex launches digital, cross-border payment solution for US small businesses
Amex is helping small businesses keep up with the global competition with its launch of American Express Global Pay, a new cross-border payments tool for small businesses based in the U.S. It allows businesses to make domestic and international B2B payments to suppliers in more than 40 countries and 12 currencies using the mobile-optimized website. (Finovate)
A volatile year continues for Robinhood, which is slashing 23% of its workforce
Robinhood lays off 23% of staff. The layoff comes just three months after the fintech released 9% of its full-time staff. At the time of its last layoffs in late April, Robinhood had about 3,100 employees after letting go of around 300 workers -- a 23% reduction in staff would amount to about 713 employees affected, leaving roughly 2,400 employees currently employed at the company. CEO and co-founder Vlad Tenev conveyed that layoffs are “particularly concentrated” in the company’s operations, marketing, and program management functions. (TechCrunch)
Novo rolls out Express ACH
Novo, a financial platform for small businesses, announced that the company launched Express ACH, a service that will allow all of Novo’s SMB customers to process same-day ACH payments. (Finextra)
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