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The game theory of a bank run, navigating advisor relationships, and bond laddering explained

by MPD
This post is by MPD from @MPD - Medium

Here’s what’s covered on this week’s episode:

  • The fallout from SVB’s closure.
  • Different strategies founders can keep in mind when deciding on where to keep and invest their cash reserves, including bond laddering.
  • Due to the recent events in banking there has been a lot of crypto activity. Brett breaks it down.
  • Startup Tip of the Week: how to navigate advisor relationships

Links:

Listen via your preferred platform here.

*DISCLAIMER*

Interplay Family Office LLC (“Interplay”) is registered as an investment adviser with U.S. Securities and Exchange Commission (“SEC”). Registration of an investment adviser does not imply any level of skill or training. Information about the qualifications and business practices of Interplay is available on the SEC’s website at www.adviserinfo.sec.gov._ Interplay only transacts business in states where it is properly registered or is excluded or exempted from registration requirements. Offering of asset management services through Interplay is pursuant to an investment advisory agreement. The views expressed in this podcast/vodcast are subject to change based on market and other conditions. The podcast/vodcast may contain certain statements that may be deemed forward looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Any projections, market outlooks, or estimates are based upon certain assumptions and should (Read more...)

Banking Madness: A before and after analysis of Silicon Valley Bank’s collapse, plus what really…

by MPD
This post is by MPD from @MPD - Medium

Banking Madness: A before and after analysis of Silicon Valley Bank’s collapse, plus what really happened with Silvergate

In the past week three prominent banks closed their doors. On this week’s episode we break down what’s happening.

Links:

Listen via your preferred platform here.

*DISCLAIMER*

Interplay Family Office LLC (“Interplay”) is registered as an investment adviser with U.S. Securities and Exchange Commission (“SEC”). Registration of an investment adviser does not imply any level of skill or training. Information about the qualifications and business practices of Interplay is available on the SEC’s website at www.adviserinfo.sec.gov._ Interplay only transacts business in states where it is properly registered or is excluded or exempted from registration requirements. Offering of asset management services through Interplay is pursuant to an investment advisory agreement. The views expressed in this podcast/vodcast are subject to change based on market and other conditions. The podcast/vodcast may contain certain statements that may be deemed forward looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Any projections, market outlooks, or estimates are based upon certain assumptions and should not be construed as indicative of actual events that will occur. Information communicated during the podcast/vodcast does not involve the rendering of personalized investment advice but is limited to the dissemination of general market information. A professional adviser (Read more...)

The Banking Crisis: More Kicking the Can

by Continuations by Albert Wenger

There were a ton of hot takes on the banking crisis over the last few days. I didn’t feel like contributing to the cacaphony on Twitter because I was busy working with USV portfolio companies and also in Mexico City with Susan celebrating her birthday.

Before addressing some of the takes, let me succinctly state what happened. SVB had taken a large percentage of their assets and invested them in low-interest-rate long-duration bonds. As interest rates rose, the value of those bonds fell. Already back in November that was enough of a loss to wipe out all of SVB’s equity. But you would only know that if you looked carefully at their SEC filings, because SVB kept reporting those bonds on “hold-to-maturity” basis (meaning at their full face value). That would have been fine if SVB kept having deposit inflows, but already in November they reported $3 billion in cash outflows in the prior quarter. And of course cash was flowing out because companies were able to put it in places where it yielded more (as well as startups just burning cash). Once the cash outflow accelerated, SVB had to start selling the bonds, at which point they had to realize the losses. This forced SVB to have to raise equity which they failed to do. When it became clear that a private raise wasn’t happening their public equity sold off rapidly making a raise impossible and thus causing the bank to fail. This is a classic example of (Read more...)

Ranked: The World’s Most Valuable Bank Brands (2019-2023)

by Marcus Lu
This post is by Marcus Lu from Visual Capitalist

most valuable bank brands

The World’s Most Valuable Bank Brands (2019-2023)

Since 2019, Chinese banks have held the top four spots on Brand Finance’s Banking 500—an annual ranking of the most valuable bank brands.

Brand value in this context is a measure of the “value of the trade mark and associated marketing IP within the branded business”. In other words, it measures the value of intangible marketing assets, and not the overall worth of the business itself.

In this infographic, we’ve visualized the Banking 500’s top 10 brands since 2019 to show you how the ranking has evolved (or stayed the same).

Top Bank Brands of 2023

The 10 most valuable bank brands of 2023 are evenly split between China and the United States. In terms of combined brand value, China leads with $262 billion to America’s $165 billion.

RankBankBrand Value (USD billions)
1🇨🇳 ICBC$69.5
2🇨🇳 China Construction Bank$62.7
3🇨🇳 Agricultural Bank of China$57.7
4🇨🇳 Bank of China$47.3
5🇺🇸 Bank of America$38.6
6🇺🇸 Wells Fargo$33.0
7🇺🇸 JP Morgan$31.8
8🇺🇸 Chase$31.3
9🇺🇸 Citi$30.6
10🇨🇳 China Merchants Bank$24.5

Chinese banks have a massive market to serve, which helps to lift the perceived value of their brands. For example, Industrial and Commercial Bank of China (ICBC) serves over 500 million individuals as well as several million business clients.

It’s worth noting that ICBC is the world’s largest bank in terms of assets under management ($5.5 trillion as of Dec 2021), and in terms of (Read more...)

The Top 10 Biggest Companies in India

by Omri Wallach
This post is by Omri Wallach from Visual Capitalist

The Top 10 Biggest Companies in India

The Top 10 Biggest Companies in India

When India hosted the 13th BRICS summit in September 2021, it was the sixth-largest economy in the world with a GDP of $3.05 trillion.

That’s more than double the GDP it had when the country first joined the group of emerging economies in 2009 (alongside Brazil, Russia, China and later South Africa), at $1.3 trillion.

What are the major industries and companies driving this growth in GDP, and rising alongside it? This time we’re highlighting the top 10 biggest companies in India, the world’s most populous democracy.

What Are the Biggest Public Companies in India?

India’s growth to one of the world’s most powerful economies came extremely quickly, considering it only became a federal republic in 1950.

In 1951, the country was considered relatively impoverished compared to the Western world, with 361 million people, a per-capita income of just $64, and a literacy rate of 17%. By 2021, the population had surged to 1.2 billion, income rose to $1,498, and literacy climbed to 74%.

And most of that growth was fueled internally, as the Indian government was largely protectionist until the 1990s. Today, its free market policies and wide cultural reach help bolster the country’s massive industrial, agricultural, and telecommunications industries.

Here are India’s biggest public companies by market capitalization in October 2021:

Top 10 Indian CompaniesCategoryMarket Cap (USD)
Reliance IndustriesOil and Gas$230.7B
Tata GroupInformation Technology$186.7B
HDFC BankFinancial$135.1B
InfosysInformation Technology (Read more...)

The Top 10 Biggest Companies in Brazil

by Omri Wallach
This post is by Omri Wallach from Visual Capitalist

The Top 10 Biggest Companies in Brazil

The Top 10 Biggest Companies in Brazil

In 2009, the at-the-time emerging economies of Brazil, Russia, India, and China held their first formal summits as members of BRIC (with South Africa joining in 2010).

Together, BRICS represents 26.7% of the world’s land surface and 41.5% of its population. By GDP ranking, they’re also some of the most powerful economies in the world.

But what drives their economies? We’re highlighting the top 10 biggest companies in each country, starting with Brazil.

What Are the Biggest Public Companies in Brazil?

Brazil isn’t just one of the largest and most diverse countries in the world, it is also an economic powerhouse.

With over 213 million people, Brazil is the sixth most populous country on Earth and the largest in Latin America. It’s also the wealthiest on the continent, with the world’s 12th-largest economy.

Once a colony focused on sugar and gold, Brazil rapidly industrialized in the 20th century. Today, it is a top 10 exporter of industrial steel, with the country’s economic strength coming chiefly from natural resources and financials.

Here are Brazil’s biggest public companies by market capitalization in October 2021:

Top 10 Companies (October 2021)CategoryMarket Cap (USD)
ValeMetals and Mining$70.8B
Petróleo BrasileiroOil and Gas$69.2B
Itaú UnibancoFinancial$53.3B
Banco Santander BrasilFinancial$50.5B
AmbevDrinks$44.8B
Banco BradescoFinancial$38.5B
WEGIndustrial Engineering$31.2B
BTG PactualFinancial$27.0B
Rede D’Or Sao LuizHospital$24.7B
XP Inc.Financial$23.4B

At the top of the (Read more...)

One banks $40M to offer ‘all-in-one’ financial services to the middle class

by Mary Ann Azevedo

One, a startup that aims to bring “all-in-one banking” to the middle class, announced today that it has raised $40 million in a Series B round of funding.

Progressive Investment Company (the insurance giant’s investment arm) led the round, which included participation from Obvious Ventures, Foundation Capital, Core Innovation Capital and others. The financing brings One’s total raised since its 2019 inception to $66 million.

Since making its product generally available in September of 2020, Northern California-based One has grown to have “hundreds of thousands” of customers, according to CEO and co-founder Brian Hamilton, who previously co-founded PushPoint (which was acquired by Capital One).

“Stretched middle-income households and working families deal with financial stress on a daily basis and are largely unsupported by current offerings,” Hamilton said. “This can be viewed as a kind of a noisy market, and so this funding has been a good validation of the vision and kind of the products, in that we have been able to stand out in that market.”

Over the past 11 months, the startup has worked to enhance its core product offering, launching overdraft protection, an auto-save feature that rewards automatic savings contributions at 3.00% APY, cash flow-based credit lines and a credit builder product to help its customers build financial health. One claims that it has helped its users automatically save over $2 million collectively since its launch, a number that grows daily, according to Hamilton.

The company is also trying to change up how people share (Read more...)

In its first funding in 7 years, profitable fintech Lower raises $100M Series A led by Accel

by Mary Ann Azevedo

Lower, an Ohio-based home finance platform, announced today it has raised $100 million in a Series A funding round led by Accel.

This round is notable for a number of reasons. First off, it’s a large Series A even by today’s standards. The financing also marks the previously bootstrapped Lower’s first external round of funding in its seven-year history. Lower is also something that is kind of rare these days in the startup world: profitable. Silicon Valley-based Accel has a history of backing profitable, bootstrapped companies, having also led large Series A rounds for the likes of 1Password, Atlassian, Qualtrics, Webflow, Tenable and Galileo (which went on to be acquired by SoFi). 

In fact, Galileo founder Clay Wilkes introduced the VC firm to Dan Snyder, Lower’s founder and CEO. The two companies have a few things in common besides being profitable: they were both bootstrapped for years before taking institutional capital and both have headquarters outside of Silicon Valley.

“We were immediately intrigued because Ohio-based Lower echoes both of these themes,” said Accel partner John Locke, who led the firm’s investment in Lower and is taking a seat on the company’s board as part of the investment. “Like Galileo, Lower will be one of the most successful bootstrapped fintech companies globally. The combination of a company built in a nontraditional region across the globe and a bootstrapped company reminds us of [other] companies we have partnered with for a large Series A.”

There were other unnamed participants in (Read more...)

Jeeves emerges from stealth with $131M in debt and equity and a16z as a lead investor

by Mary Ann Azevedo

Jeeves, which is building an “all-in-one expense management platform” for global startups, is emerging from stealth today with $131 million in total funding, including $31 million in equity and $100 million in debt financing. 

The $31 million in equity consists of a new $26 million Series A and a previously unannounced $5 million seed round.

Andreessen Horowitz (a16z) led the Series A funding, which also included participation from YC Continuity Fund, Jaguar Ventures, Urban Innovation Fund, Uncorrelated Ventures, Clocktower Ventures, Stanford University, 9 Yards Capital and BlockFi Ventures.

A high-profile group of angel investors also put money in the round, including NFL wide receiver Larry Fitzgerald and the founders of five LatAm unicorns — Nubank CEO David Velez, Kavak CEO Carlos Garcia, Rappi co-founder Sebastian Mejia, Bitso CEO Daniel Vogel and Loft CEO Florian Hagenbuch. Justo’s Ricardo Weder also participated in this round and Plaid co-founder William Hockey put money in the $5 million seed funding that closed in 2020 after the company completed the YC Summer 2020 batch.

The “fully remote” Jeeves describes itself as the first “cross country, cross currency” expense management platform. The startup’s offering is currently live in Mexico — its largest market — as well as Colombia, Canada and the U.S., and is currently beta testing in Brazil and Chile. 

Dileep Thazhmon and Sherwin Gandhi founded Jeeves last year under the premise that startups have traditionally had to rely on financial infrastructure that is local and country-specific. For example, a company with employees in (Read more...)

Divido bags $30M to take its ‘buy now, pay later’ platform to more markets

by Natasha Lomas

London-based Divido, a whitelabel platform for retail finance that integrates with ecommerce platforms (but can also support omni-channel) so retailers can offer consumers a ‘buy now, pay later’ option at the point of sale, has bagged a $30M Series B to fund international expansion.

The funding round is led by global banks HSBC and ING, with participation from Sony Innovation Fund by IGV*, SBI Investment, OCS, Global Brain and DG Daiwa Ventures along with existing investors DN Capital, Dawn Capital, IQ Capital and Amex Ventures.

The Series B follows a $15M Series A back in 2018 — when the fintech product was available in a handful of European markets and the U.S., with a goal of launching in 10 more countries by the end of 2019.

Evidently, that anticipated rapid-fire international expansion didn’t exactly pan out as planned, as Divido is only operating in ten markets across two continents now — a little under two years later. But, flush with Series B funding, it says it’s looking to fuel the pace of its international push.

The 2014-founded startup operates a marketplace model where lenders compete to offer the most suitable credit line to consumers to grease purchases — partnering with businesses such as banks, retailers and payment partners so they can offer a ‘Buy Now Pay Later’ to their users at the point of sale.

Klarna confirms new $31B valuation

Divido claims its product leads to up to 20%-40% more sales for retailers — and it says it has (Read more...)