22 April 2022 |

Russia-Ukraine’s Effect on Crypto and Fintech M&A Heats Up

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Hello everyone—welcome back to our weekly FTT newsletter. We’re gonna be switching things up a lot here—first up, more tunes! 

There’s a lot of Blondish on here, since she played at an event we sponsored with Vol. 1 Ventures for Miami Bitcoin Week. She was so good live—I was sober (this new thing I’m trying…its boring AF but I feel better, so tradeoffs) but still managed to go out till 4AM. Built different as the kids say. 

Here’s the playlist:

Anyway back to fintech stuff. A long time ago we used to have a feature called “candidate of the week.” It was sick—we featured people, anonymously or not, who were looking for jobs. I’d love to restart that, so if you’re interested, hit me up at [email protected]. 

For a lot of people, finding a job in fintech is still really hard. Companies like Pallet (which FTT has been an early partner and a small investor) have made it easier than ever for creators with audiences to start up job boards and talent collectives. And while everyone features jobs in their newsletters I always thought it’d be more compelling to highlight the talent, cause there’s a large segment of hiring managers reading FTT. I’m excited to try and see how this goes! (If you’re a hiring manager looking for specific roles, hit me up at [email protected] too.) 

Now to the news…

Lots of M&A in fintech this week:

Brex bought financial planning software company Pry Financials for $90 million, the company announced on the 19th. On the same day, Robinhood announced it was buying UK based crypto company Ziglu for an undisclosed amount. And just a month before, Apple bought up UK open banking startup Credit Kudos, according to The Block. I’ll have more on this on Monday but both myself and most people I talk to are expecting a lot more acquisitions in fintech, for a plethora of reasons. 

Amazon’s coming straight for Shop Pay:

The retailer announced “Buy With Prime,” a new product aimed toward third-party e-commerce merchants. It’ll initially start with merchants that use Amazon for fulfillment but the company says in its press release that they’ll expand to non-Amazon merchants too.

Amazon combines Amazon Pay, its buy button, with free 2-day or next-day shipping and free returns. Shop Pay has helped Shopify turn into a fintech company by facilitating consumer payments to Shopify merchants, and then using that data to lend capital to fast-growing e-commerce companies.

But, Amazon has other advantages it can leverage into a competing product—namely, its owned fulfillment and logistics networks that guarantee free 2-day shipping. It’s a core feature that’s catapulted Amazon Prime to become one of the most popular subscription products in the US. Shopify’s stock took a 17% drop this week, in part to the Buy With Prime news. 

IMF’s Global Financial Stability report:

The IMF recently published a Global Financial Stability report, with a ton of interesting crypto info and data. (Sidenote: I think it’s pretty important to read reports like this; understanding the macroeconomic landscape and applying it to fintech can definitely be an advantage…and fun lol.) One part I wanted to highlight specifically was the IMF’s perspective on the effect of the Russia-Ukraine war on crypto assets. 

The IMF says that volumes around emerging markets have been increasing steadily, and “a more structural shift toward crypto assets as a means of payment and/or store of value could pose significant challenges to policymakers…”

The report singled out Turkey, where exchange rates volatility has been high, and there’s more use cases around crypto there as well. Similarly, in the second chart above, you can see the ruble and hryvnia, the Russian and Ukrainian national currencies, spike in trading volume around the start of the Ukraine war and other notable events prior to the start (sanctions and capital restrictions against Russia.) 

The report also had a noteworthy stat: last years monthly average revenue for Bitcoin mining was around $1.4 billion—Russian miners may have 11% market share, and Iranian miners, roughly 3%.

Tweets of the Week