3 Fintech News Stories
#1: Updates From The Spend Management Space
What happened?
A couple of interesting announcements from the world of spend management.
First, Pipe (the embedded finance platform) acquired Glean.ai:
Pipe, a fintech company enabling embedded financial solutions for software platforms, today announced its strategic acquisition of Glean.ai, a leading AI-powered spend management company. With this acquisition, Pipe becomes the first embedded finance company to bring together embedded capital and spend management for small businesses via its partners.
Glean.ai’s spend management solution is an ideal complement to Pipe’s existing embedded capital and business charge card solution, which are delivered through Pipe’s payments and vertical software partners. Pipe is working with the world-class Glean.ai team to integrate it within Pipe’s internal processes and build an even better spend management solution partners can offer to their small business customers.
And second, U.S. Bank launched a spend management platform for its commercial customers:
The bank is rolling out the digital platform across its full portfolio of business banking credit cards in a move it says will give users an alternative to relying on multiple tools.
The tool is designed to help business owners drive down costs, reduce manual work, and save time through the use of card controls, integrated accounting, and intuitive receipt capture within a single, easy-to-use dashboard.
So what?
This will sound hyperbolic, but I really do think it’s true — everything you need to know about what’s happening in fintech, you can learn by studying the spend management space.
Just looking at these two news stories, you can pick out a bushel of relevant fintech trends, including:
- Vertical B2B SaaS — Pipe’s ambition is to enable vertical B2B SaaS companies to be as competitive as possible with their larger, industry-agnostic competitors (I wrote about the competition between these two groups here). Those larger competitors (think Square, Intuit, Shopify, Ramp, Brex, etc.) all specialize in different areas of B2B financial services (e.g., spend management, lending, banking), and it’s very difficult for small, vertical B2B SaaS companies to match up, in terms of functionality, without help. Pipe wants to be the company that helps them, and this acquisition nudges them a bit closer.
- AI hype — Credit to Glean.ai’s CEO, Howard Katzenberg, for being ahead of the market in attaching AI to the end of his company’s name and snagging the matching URL. Glean announced its $10M seed round in March 2022, about nine months before ChatGPT was released. I don’t know how much AI is actually built into the product or how much the .ai URL ultimately helped the company (the terms of this acquisition weren’t announced), but I doubt it hurt!
- Product Bundles vs. Modularity — There is an ongoing debate in the spend management space about whether providers should bundle spend management software with B2B charge cards and credit cards or specialize in one or the other and facilitate the necessary integrations to enable customers’ best-of-breed strategies (sometimes referred to as “bring-your-own-card”). Companies like Citi, Navan, and Astrada are focused on specialization and modularity (which, personally, I think is the right strategy). Others, like American Express and now U.S. Bank, are pursuing an all-in-one product bundle strategy.
#2: Plaid-ify Any Website
What happened?
An infrastructure startup called Deck has raised a $12M Series A to enable companies to “Plaid-ify” any website:
The new raise, led by Infinity Ventures, brings Montreal-based Deck’s total raised since its January 2024 inception to $16.5 million. Golden Ventures and Better Tomorrow Ventures co-led its seed raise.
Deck claims that it is building the infrastructure for user-permissioned data access — across the entire internet. Its browser-based data agents “unlock” the data from any website through automation.
To put it more simply, Deck helps users connect any account online and aims to turn the information into structured, usable data, with full user permission.
So what?
First, these guys made a huge mistake by not naming the company Platypus (Platypus can Plaid-ify any website …), but whatever. Deck is fine, I guess.
Second, this is the logical endpoint of open banking.
The whole idea of open banking is that banks have a bunch of data that they make available to their customers, but that they don’t use or monetize in any other way, even though that data has massive commercial value. So, why not leverage those customers’ credentials to access that data and sell it to companies that can build something valuable with it for the customers, even if what gets built is competitive with what the banks offer? And if the banks get mad about it (which they will), just say, “hey, it’s the customer’s data and they chose to share it!”
Put simply, customer permission is the skeleton key that unlocks access to data that would never be made available otherwise.
We’ve seen this key unlock data in B2B accounting, consumer payroll, and e-commerce, among many other industries. Now, Deck is building the infrastructure to manufacture this skeleton key for any industry. And Deck itself acknowledges that this is likely to piss off the owners of all those locked doors:
“While it may hypothetically be violating some terms and conditions, our technology follows the open data international trend that was initiated and greatly popularized by open banking, and has pushed regulators across the world to make it clear in several jurisdictions that consumers and businesses have the right to access and transfer their data.”
What an utterly fantastic quote. And directionally accurate (not legal advice!)
Courts have generally held that violating a website’s terms and conditions does not constitute criminal hacking (although it may still result in other non-criminal consequences). And Deck is correct that regulators and lawmakers around the world tend to believe that consumers and businesses should be allowed to share their data with whomever they want.
The idea makes sense. My question is about the execution.
Deck’s target market is the entire internet. That’s a very big market! Usually, the recipe for success in customer-permissioned data aggregation is specialization. You pick an industry. You learn the unique quirks of how companies in that industry store, protect, and share access to customer data. You build different solutions to scrape that data based on those quirks. You monitor the performance of those screen scrapers and iteratively work to improve them to maximize coverage and connectivity. And you build API endpoints and attributes to deliver structured data that meets the needs of the use cases your data enables.
Deck started out with a more focused approach:
Initially, the company has been focused on working with utility companies, having connected to over 100,000 utility providers in more than 40 countries across North America, Europe, and Asia.
But it has since broadened its approach to any industry where data is “trapped” in online customer accounts.
I’m not sure if that broader approach is workable at Deck’s size, but then again, LLM-powered AI agents weren’t around when Plaid and other open banking pioneers were first building out their screen scrapers:
When a user connects an account, Deck’s infrastructure handles everything behind the scenes. Its AI agents log in, navigate, and extract the data “just like a human would — but faster, more reliably, and at scale,” said Leboeuf.
It then generates scripts to keep those connections live and reusable without AI involvement going forward.
#3: Won’t Get Fooled Again
What happened?
Ryan Breslow is officially back. Or so says the lede of this TechCrunch article:
Breslow is unveiling Wednesday a new “superapp” that he hopes will formally mark his return as [Bolt’s] leader. He describes the new product as “one-click crypto and everyday payments” in a single platform
The app at once competes with a number of other companies such as crypto exchange Coinbase, payments platform Zelle, and PayPal. Its advantage, Breslow claims, is the ability to do what all these others do from one place via mobile.
For example, the app will allow users to buy, sell, send, and receive major cryptocurrencies such as Bitcoin, Ethereum, USDC, Solana, and Polygon directly within the app. Users are provisioned an on-chain balance powered by Zero Hash and will be able to see their balance in real time, Breslow says.
Breslow is also hoping to pick up where Zelle left off with the shutdown of its standalone app. With Bolt’s new offering, users can process peer payments “with just a single click” within its app. With Zelle, users can only send payments to peers through banking apps.
On top of that, Bolt has partnered with Midland States Bank to now also offer a debit card that features a rewards program
So what?
The term “superapp,” like “one-click checkout” before it, is a term that seems to attract a lot of delusional fintech founders. It works because, on the surface, it sounds unassailably compelling. Like, who wouldn’t want a single app that you can do all your banking in?!?
However, the purveyors of this dream tend to overlook a lot of crucial details, such as:
- There are already numerous companies that allow customers to buy and sell crypto, send and receive money, and spend money on a payment card that is widely accepted by merchants. This includes, off the top of my head, obscure brands like PayPal, Cash App, and Robinhood.
- The value of many of these features lies in the network effects that the companies offering them have earned over the years. It’s easy to say, “Hey, Zelle is removing P2P payments from its standalone app. We have an opportunity to grab market share!” It’s much harder to map out a customer acquisition and retention strategy that gets you anywhere close to the reach and ubiquity that Zelle has through its network of bank partners.
- The reason a debit card with rewards (1%-3% cash back in Bolt’s case) stands out in the market is that the unit economics of debit cards in the U.S. generally don’t support rewards. Not even Durbin-exempt interchange fees get you to break even. And yet, according to the TechCrunch article, Breslow is planning to use debit interchange as one of the main revenue growth drivers for Bolt.
Of course, these details pale in comparison to the larger concerns that any customer, partner, or investor should have about working with Breslow and Bolt, given the numerous other issues that both have faced over the last couple of years, as TechCrunch helpfully notes:
The fintech company last year was reportedly trying to raise $450 million in an unusually structured deal that would have valued it at $14 billion. That deal raised questions over its unusual use of $250 million in “marketing credits” and lack of confirmation from an investor mistakenly identified as its lead.
Some of Bolt’s investors, including BlackRock and Hedosophia, sued to block the round, Forbes reported, but that was voluntarily dismissed by all parties, Bolt announced in March.
Breslow was also previously sued by former investor Activant Capital over a $30 million loan that the founder had taken out. Activant claimed Breslow saddled the startup with $30 million in debt by borrowing that amount and then defaulting, with company funds used to pay it back.
All in all, it’s hard not to think of Breslow’s return to Bolt and pursuit of the superapp dream as some kind of meta performance art piece, critiquing the tech industry’s unshakable faith in failed and controversial founders.
In support of this theory, I would like to submit as evidence Ryan Breslow’s superapp soundtrack, which is linked directly from the product’s webpage:
And includes — and I swear this is true — the song “Won’t Get Fooled Again” by The Who.
2 Fintech Content Recommendations
#1: The Synapse-Evolve Disaster: One Year Later (by Jason Mikula, Fintech Business Weekly) 📚
For anyone interested in BaaS Island, this recent anniversary piece on the Synapse-Evolve disaster by Jason Mikula is worth reading and bookmarking for periodic re-reads.
#2: Firings, ‘cheerleader energy’ and lost trust: What really led to the Luka Doncic trade (by Tim MacMahon, ESPN) 📚
I know this isn’t fintech content, per se, but I think it’s vital for anyone working in a professional setting to understand how companies can make idiotic business decisions.
1 Question to Ponder
How do the companies that provide cash flow underwriting scores get access to the performance data necessary to build and maintain those scores? How different is that process from how traditional credit scores are built and maintained?
