CRYPTO INVESTING

Betterment Becomes the Buyer 

TL;DR: And just like that… Betterment said it’s acquiring Makara, a robo-advisor for crypto assets, to give retail investors and financial advisors access to crypto.

Betterment was reportedly valued at $1.3 billion last fall after raising $160 million in a Series F round. Makara (founded in 2021) has raised about $6.6 million to date from investors including Liquid 2 Ventures and Signum Capital. 

The deal does two things: 

1. Marks Betterment’s official entrance into the crypto sphere
2. Further cements CEO Sarah Levy’s goal of Betterment going public in the future

What’s Up

After long-time robo rival Wealthfront announced its sell to UBS just last month, Betterment has basically been left as the last big robo-advisor standing. 

That led to the buzz that Betterment is up for sale next. With a contrarian POV, I explained why I’m optimistic that Betterment will stay independent and exit through an IPO. 

However, I didn’t come up with this take just for contrarian sake. But when you spend an hour interviewing and getting to know a fintech CEO, you gather some exclusive knowledge (that I also share with you all). 

If Betterment wanted to sell, why not do it under founder John Stein? Why change leadership and bring in Sarah Levy? Why make major acquisitions (Wealthsimple last year and now Makara) and why roll out new offerings? It doesn’t add up.

A company that is trying to sell will only do the bare minimum to keep up the bottom line and won’t focus on a long-term vision. 

Follow the People, Not the Institution 

Everyone likes focusing on comparing institutions to their rivals. In that sense, it’s easier to determine that Betterment would follow the paths of Wealthfront and Personal Capital.

What if we focused, instead, on the people inside the company, the leadership, and the nuances behind their goals and values. Let’s connect the dots by following people. That insight can help us make sense of what’s to come. 

When I interviewed Sarah, there is an edge to her mindset as a newcomer to fintech and a passion in her eye to make Betterment work that is hard to ignore. Couple that with growth strategies around Betterment for Business, 401(k) offerings, Betterment for Advisors, and now crypto portfolios. 

Does this sentiment apply to every fintech out there? Of course not. But I want to challenge our industry to do a better job of focusing on the people operating our industry and not just comparing organizations and jumping to conclusions.  

Crypto, Everywhere

On another note, it’s hard to ignore that crypto is everywhere. To think just a year ago robo-advisors and other fintech investing apps wouldn’t step into crypto because it was deemed too risky for investors. Look at us now: 

• Robo-advisor Stash launched crypto via Grayscale in January 
• SoftBank-backed fintech DriveWealth adds crypto and challenges Coinbase
• Titan launched the first actively managed portfolio of crypto assets last summer

Don’t miss an exclusive interview with Titan’s Clay Gardner tomorrow. Find it here when it goes live: https://pod.link/1600731457

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INTERNATIONAL

TripActions bumps UK and EU Investments

TL;DR: Corporate payments fintech TripActions is acquiring Comtravo, a travel management co. that serves German, Austrian, Swiss, and Scandinavian regions. 

With a second Europe-based acquisition for TripActions, the fintech co. has invested more than $400M into the UK and EU markets in less than a year.

What’s Up

TripActions launched in Europe in December to make space for employees across international waters to work for American companies and have corporate cards. 

Combined with Comtravo, the TripActions Group will now support more than 7,500 customers and manage nearly $6 billion in total travel budget across more than 94 countries — with half of the group’s business now in Europe and the UK.

Acquiring a regional travel company is a smart move when a US-based fintech aims to make its mark across waters. When you’re launching products into other countries, it’s critical to have insight into the custom/specific needs of each culture. 

What works in the US, doesn’t always work in the EU or UK. Companies need to partner or acquire local shops to have a clearer vision and insight into ways to serve that community best. That’s what TripActions is doing here. 

Why it Matters

Investments in international fintech companies are hot. 

Investors threw down almost 3x as much money into fintechs based in the U.K., Germany, and France in 2021 as they did in 2020. 

Fintech is one of the most exciting and rapidly changing industries in existence. But it is also becoming a great equalizer for consumers outside of the U.S. 

For example, India’s GDP is forecast to grow by $950 billion by 2025 due to fintech alone, creating 21 million jobs. One of the core outcomes of this? Massively enhanced financial inclusion. You know how we love that here. 

CLIMATE FINTECH

Global Climate Fintech Funding Tops $1B 

TL;DR: Investments in fintech are blowing up everywhere, even in climate-based fintech. According to a CommerzVentures report, climate fintech startups raised $1.2 billion in 2021. 3x higher than all previous years, combined. 

For perspective: Before 2021, all 292 startups identified raised a total of $400M.

By the Numbers

• European climate fintech startups raised more than their US counterparts with $624M vs. $576M. 
• Within Europe, UK-based climate fintech raised the most funding with $194M. 
• As an emerging space, 68% of all funding rounds occurred at the seed or pre-seed stage. 
• Carbon accounting and climate risk management are the climate fintech sub-sectors that attracted the most funding, with $410M and $304M, respectively. 
• B2B startups raised $1B of the total. ~6x more funding than B2C startups. 

Key Players

EU may have taken the most funding total, but the two largest climate fintech funding rounds were announced by US startups: Xpansiv (a marketplace for carbon credits) raised $140M, and Persefoni (a carbon accounting platform) raised $115M. 

Other key players include: 

1. Doconomy: Provides a global standard for consumer carbon footprinting. 
2. Sweep: Offers companies to measure, visualize, and analyze how different operations contribute to the overall carbon footprint. 
3. ClimateX: Provides location-specific climate risk assessments and detailed analysis tailored to specific industry needs. 
4. Kettle: Developed an intelligent reinsurance model, enabling more stable returns for insurance companies. 

WTF ELSE?

• Vietnamese Investing App Infina raises $6M
• Polygon raises $450M from Sequoia Capital India, SoftBank and Tiger Global
• Nigerian health tech startup Reliance Health raises $40M led by General Atlantic
• Yieldstreet launches its newest real estate offering with a targeted annual
• US Consumer fintech funding takes a (small) breather
• SPAC Aurora Technology Acquisition prices $200 million IPO