We saw a flurry of product and financing announcements at Money 2020 this week. Before we dig in though, we’ll start with macro news.

The Fed cut rates for the 3rd time this year. Fed Chief Powell signaled the central bank is done cutting rates, but markets expect more tricks-and-treats to come… Fed funds futures imply a 54% chance of at least one more rate cut by April 2020. Also, the Fed has now moved from a “one-off adjustment” positioning of their initial rate cut to a trendline.

The healthy Friday jobs report supports the ‘wait and see’ Fed view (although it is a backward looking indicator). The report indicated growth in employment of 128K in October and a tick-up in unemployment to 3.6%.

Gains were driven by the service sector – hospitality, retail, and healthcare. Manufacturing remains in a recession but at a smaller share of the overall economy.

Source: WSJ, Labor Department, PeerIQ

What’s Hot and What’s Not at Money 2020?

Attendance was at record levels. Here’s our view on the areas attracting the most attention at Money 2020:

  • Lending-as-a-Service: lenders that enable non-banks, banks and credit unions originate loans (e.g., loan origination software, digital experience, bank workflow software, etc.). Examples: Better, nCino, Happy Money (backed by CUNA Mutual), Alchemy, Splash Financial, Blend, Roostify
  • International Lending: Non-banks expanding access to credit, particularly in the LatAm markets. Examples: CrediJusto (Mexico SME), Addi (Colombia POS), Nova Credit
  • Underwriting infrastructure: Reducing OPEX or fraud risk thru automation. Examples: Ocrolus, Feedzai

Nova Credit, led by CEO Misha Esipov, touches on two of the above themes. The startup announced a partnership with American Express to open access to credit-worthy borrowers with data on international bureaus. Lend Academy has a nice write up on the offering here.

POS lending also has some buzz, though there seems to be a race-to-the bottom dynamic in underwriting standards emerging. Exhibit A: One lender that will go nameless was ‘differentiating’ by offering a 100% approval rate on applications in a bid to win merchants.

In Financing news, PeerStreet, led by co-founders, Brew Johnson and Brett Crosby, raised $60 million in Series C funding round. The round was led by Colchis Capital and featured participation from prior investors A16Z, ThomVes, and others. This latest round of funding will help the company continue to scale PeerStreet’s two-sided marketplace — the first and largest of its kind for investing in real estate debt.

Product announcements at Money 2020

Blend, a FinTech startup led by CEO Nima Ghamsari, launches its new auto loan product. This is another datapoint in the ‘convergence’ theme (e.g., infrastructure companies spanning multiple lending products, lenders bolting on deposit capabilities, challenger banks adding lending, etc.). 

Blend powers banks such as Wells Fargo and U.S. Bank, with an online mortgage application platform. They are now applying their mortgage success product to auto lending.

BlueVine, a leader in providing online working capital for small businesses, announced its new banking service. BlueVine now provides the BlueVine Business Debit Mastercard as a way to manage everyday finances. Business owners get 1% back on their balance if it exceeds $1,000.00. This makes BlueVine Business Banking one of the nation’s highest yield business checking accounts. Customers can have an unlimited number of transactions with zero fees.

Uber makes its debut into the financial services industry with their new division called Uber Money. Uber aims to house their efforts by creating a digital wallet and upgraded debit and credit cards.

Uber will give 4-million-plus drivers on their platform and couriers around the world access to a mobile bank account with the goal of retaining drivers. Uber will release a debit card with an “instant pay” service, which has been tested in the U.S. and other markets. More than 70% of driver payments are made using instant pay.

Instant pay is a no-fee banking account with the debit card in the U.S. It seems that the real winner in the announcement seems to be Green Dot, a leading prepaid debit card issuer, which is powering Uber’s new offering.

Industry News:

Lighter Fare: