The Big Story: Human Interest's Path to IPO

SMB-focused 401k provider Human Interest recently announced a $267 million funding round, paving the way for a public market listing. This investment builds on the company's impressive growth, which includes a $40 million Series C funding round in 2020, subsequent rounds, and a minority stake acquisition by BlackRock in 2023. Human Interest is approaching cash flow break-even and has the resources to sustain continued growth without additional capital.

• Human Interest plans to go public when the time is right.
• The company has secured significant funding and has a strong track record of growth.
• Human Interest focuses on providing 401k solutions for small and medium-sized businesses.

Payments Unicorns are Rare

The number of new fintech unicorns in the second quarter of 2024 was only two, a stark contrast to the 49 born in the same period in 2021. This indicates a shift in the market, with increased scrutiny and a focus on profitability.

• Altruist, a custodian for registered investment advisors (RIA), raised $169 million in Series E funding, valuing the company at over $1.5 billion.
• Pigment, a Paris-based startup, raised $145 million in a funding round, reaching a $1 billion valuation just five years after its inception.

Analysis of the Week: The Payments Landscape

Fintech unicorns, particularly those focused on payments, are becoming more rare as the market matures and investors prioritize profitability. Altruist's recent funding round and its focus on RIA custody services highlight the growing demand for robust infrastructure solutions in the fintech ecosystem.

• The decline in fintech unicorn creation reflects the changing investment landscape and increased regulatory scrutiny.
• Altruist's success suggests a strong demand for solutions catering to the needs of registered investment advisors.
• Pigment's rapid growth highlights the importance of business planning platforms for large companies.

Recent Payments Funding Rounds

Several fintech startups have recently secured significant funding, demonstrating continued interest in the payments and financial technology sectors.

• Fragment, a digital ledger API startup, raised $9 million from fintech infrastructure executives from Stripe, BoxGroup, Avid Ventures, Zach Perret (Plaid), and Jack Altman (Lattice).
• Coast, a financial services platform for the future of transportation, raised $40 million in Series B funding led by ICONIQ Growth, building on its previous $25 million venture round.
• Astor, a free personal finance platform for women, raised $1.4 million to merge community and investing in an approachable way.
• Slope, a B2B payments platform, secured $65 million in strategic equity and debt financing from JP Morgan Payments.
• Matera, a Brazilian company providing instant payment solutions, received a $100 million investment from Warburg Pincus.

Other Fintech News

The fintech industry continues to evolve with new developments in payments, regulatory updates, and mergers and acquisitions.

• Paytm, an Indian fintech, reported a decline in revenue and a significant increase in losses due to regulatory changes.
• Deel, a fast-growing payroll provider, acquired Hofy, a London-based company that manages office equipment for remote hires.
• Pesa, an African remittance fintech, is nearing the completion of licensing requirements for expansion into the United States.

High-Interest Headlines

Keep an eye on these noteworthy developments in the payments and fintech landscape.

• Tiger Global is in talks to lead a $500 million share deal for Revolut, a financial services company.
• A new fintech unicorn, a credit card backed by your home, is attracting attention in the industry.
• Capstack Technologies acquired Edge Tradeworks, a move that consolidates technology solutions for the financial industry.

Fintech Trends: Investing, IPOs, and Funding

The fintech sector continues to attract significant investment, with companies pursuing funding rounds, IPOs, and strategic acquisitions. Investors are looking for companies with a strong business model, a clear path to profitability, and a focus on solving real-world problems in the financial services space.

• The growth of fintech unicorns is slowing down, indicating a shift in investor appetite.
• Companies like Altruist are gaining traction by providing specialized services to specific segments of the market.
• The increasing demand for payments and financial services platforms is driving investments in fintech startups.