Pipe Bags $100Mn Debt Line; Synapse Drama Continues; Apple Tap to Cash

By Cole Gottlieb

June 16, 2024

Happy Sunday,

Both inflation and interest rates held steady. Consumer optimism on stocks edges up. Pipe bags a $100Mn debt facility. InScope raises $4.3Mn to automate accounting. Synapse drama continues. U.S. Bank partners with Greenlight. Apple launches “Tap to Cash,” Affirm partnership. PingPong announces embedded lending.

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Inflation & Rates Steady

Last week, the CPI report and FOMC read out occurred on the same day. Prices were flat month over month and up 3.3% vs. the prior year. Core CPI was up 0.2% month over month and 3.4% vs. a year ago. Meanwhile, as expected, the Fed held rates steady, though it revised its forecast down to just one rate cut later this year. It’s too soon to tell if the Fed’s policy stance is sufficiently restrictive, Fed Chair Powell said. Consumer optimism about equity prices increased slightly, reaching its highest level since May 2021.

Image: CNBC

Pipe Bags $100Mn Debt Facility

Revenue-based financing startup Pipe announced it has secured a $100Mn facility with Victory Park Capital, with the potential to increase the line to $200Mn in the future. Pipe targets not only SaaS startups but also more traditional SMBs that may have difficulty accessing credit from traditional lenders. Pipe leverages transaction data and AI and machine learning techniques to underwrite businesses. By embedding Pipe into software platforms and point-of-sale systems firms use to run their business, Pipe can benefit from data typical lenders may ignore and, potentially, lower CAC thanks to embedded distribution. In a conversation with PYMNTs about the new facility, Pipe CEO Luke Voiles also gave a nod to the need to get compliance right, saying, “Life is too short not to do compliance the right way,” and describing compliance as a “competitive advantage” vs. other lenders.

InScope Raises $4.3Mn Seed Round

Automated financial reporting startup InScope, led by cofounders Kelsey Gootnick and Mary Antony, announced it has raised a $4.3Mn seed round. The round was led by Lightspeed Venture Partners, with participation from individual investors that included Jake Heller, Debbie Clifford, Vipul Ved Prakash, and Nadia Asoyan. The impetus for the company stems from Gootnick and Antony’s backgrounds in accounting, where they experienced first-hand how tedious and time-consuming putting together financial statements and disclosures could be. The first iteration of the product focuses on simplifying preparing cash flow statements, and the company plans on expanding to offer capabilities that let users more easily draft quarterly and annual statements. InScope plans to use the funding to grow its customer base and continue building out its feature set.

Synapse Drama Continues

The convoluted case of bankrupt BaaS platform Synapse continued last week, including some unexpected twists and turns. The Chapter 11 trustee, former FDIC Chair Jelena McWilliams, filed her first status update with the court. The filing indicates a potential gap of $85Mn vs. what end users of Synapse fintech clients are owed. While using an independent forensic auditor to untangle the books and records would be the preferred path, the bankruptcy estate lacks funds to pay for such services. Instead, McWilliams is relying on the four banks, Evolve, AMG, American National, and Lineage, to work together based on the records each hold to reconcile the accounts in order to release funds to end users.

In a creditor committee meeting last Monday, Synapse cofounder Sankaet Pathak seemingly acknowledged the company co-mingled its own operating funds, fintech platform reserve and operating funds, and end-user funds in “FBO” accounts at Evolve. In an unexpected twist, news leaked that Pathak is seeking $11Mn in funding for a new robotics startup, Fintech Business Weekly’s Jason Mikula first reported on X and later confirmed by The Information and CNBC.

U.S. Bank Partners with Greenlight

U.S. Bank has announced a partnership with kids’ debit card startup Greenlight. The regional bank will give its clients with eligible accounts complimentary access to Greenlight’s app and card via an embedded mobile app experience. U.S. Bank said the partnership supports its strategy of enhancing financial education for its customers and their families. Greenlight is currently used by more than 6Mn parents and children, according to the company.

Apple Launches “Tap to Cash,” Partners with Affirm

At Apple’s Worldwide Developer Conference, the smartphone giant announced a new peer-to-peer payment feature, which will allow consumers to exchange money by tapping their phones together. While the company demoed an elegant user experience, Apple Cash, which has long allowed users to send each other funds via Apple’s messaging app, iMessage, has failed to make a significant dent in the dominance of Venmo, Cash App, and Zelle in the P2P payment space. In other Apple news, the company has teamed up with BNPL provider Affirm to offer Affirm’s financing options through Apple Pay in the U.S. Affirm’s BNPL plans will surface as an option for Apple Pay users beginning later this year. The company said it also plans to make installment loans via credit and debit cards available through Apple Pay for Citigroup, Synchrony, and Fiserv-related issuers.

PingPong Announces Embedded Lending

PingPong, a cross-border payments provider, announced its expansion into embedded lending last week. The feature will enable U.S. business of all sizes to access liquidity through the platform. PingPong partnered with embedded lending solution provider Kanmon on the capability. Lending products will include fixed-term loans and accounts payable financing for amounts up to $250,000. The application process takes about five minutes, with funds available within 48 hours, the company said.

In the News:

Fed’s Higher-for-Longer Stance Hits Firms That Expected Rate Cut (Bloomberg, 6/11/2024) Some business caught off guard by Fed’s higher-for-longer position.

New York Fed Is Losing Talent and ‘Street Cred’ Under John Williams (Bloomberg, 6/9/2024) Is the NYFed losing its “swagger”?

Klarna signs deal with Sainsbury’s for interest-free BNPL payments (IBS Intelligence, 6/10/2024) British users can now split-pay their bill at grocer Sainsbury’s.

Credit card borrowers are starting to show greater strength, new data indicates (American Banker, 6/10/2024) New analysis suggests card borrowers are holding up better than expected.

Citi introduces real-time funding for corporate treasurers (Finextra, 6/10/2024) Citi announced Real Time Funding for corporate clients in Australia, Hong Kong, and the U.K.

Cash use persists in US beyond pandemic (Payments Dive, 6/11/2024) Despite the impact of the COVID pandemic, some consumers still prefer cash.

BNY Mellon rebrands as BNY (Finextra, 6/12/2024) BNY Mellon will now be known simply as “BNY.”

Stablecoin Issuer Paxos Lays Off 65 Employees (PYMNTS, 6/12/2024) The cut amounts to about 20% of the company’s workforce.

PayPal hires high-ranking marketing gurus to delve into payments data (American Banker, 6/11/2024) PayPal looks to build a marketing business leveraging its first-party data.

Lighter Fare:

Inside the rise of river surfing, the Midwest’s next big thing (NatGeo, 6/7/2024) Watch out, coastal elitists, Midwesterns have discovered surfing.