SoftBank heads for the exit?

Definitely not enough relaxing under tall palm trees this summer :-( but at least the juicy deals never stop.

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SoftBank Vision Fund scores two exits in August

American Express acquired SMB lending fintech Kabbage. The purchase price hasn’t been disclosed. Kabbage was last valued at $1.2B in 2017. American Express is onboarding the team and technology and Kabbage’s existing loan book is not included in the purchase agreement. Kabbage has created its proprietary algorithm evaluation of loan applications using traditional and alternative data sources. These range from bank account data, payment processing data, accounting statements to even sentiment and social media signals. Leveraging Kabbage’s technology American Express plans to offer small businesses flexible working capital solutions much needed in this difficult time and beyond. If you want to find out more about the deal, check out our blog post.

UK-based industrial software company Aveva acquired SoftBank-backed OSIsoft for $5B. SoftBank owns 45% of OSIsoft’s stake. SoftBank Vision Fund, which reported annual losses of $18B for the last financial year ended in March 2020, reported an investment gain of $2.8B this quarter. SoftBank Group has been resuscitating its share price by the $41B buyback programmes in part to fund a $23B stock buyback announced in March. A merger between Sprint and T-Mobile closed in April, Softbank-backed Lemonade, an insurance company, had an IPO in July (its share price increased by more than 138% on its IPO day). SoftBank spent $9.5B since March on buybacks. Softbank is selling down stakes in Alibaba, T-Mobile, and its wireless operations unit Softbank Corp. to support its share buyback programmes. SoftBank also plans to sell the $32B British chip maker Arm. SoftBank acquired Arm in 2016 and put 25% ARM stake ($8B) into SoftBank Vision Fund in 2017. SoftBank Vision Fund has previously invested $4B in Nvidia in 2017, and sold off its entire stake in the company in 2019 January.

Payments

The graphic below illustrates major fundings in payments companies in 2020.

San Francisco-based payments infrastructure company Finix added extra $30M to its Series B funding round. Finix helps businesses to build their own payment processing infrastructure without depending on 3rd party processors such as Stripe. The company’s CEO revealed that transaction volume more than quadrupled YoY in the second quarter of 2020. Investors include American Express Ventures, Lightspeed Ventures and the company has raised $96M to date.

Stem, a platform that helps musicians distribute and collect revenues, raised $10M funding from Slow Ventures, Upfront Ventures and Aspect Ventures. Founded in 2015, the company has raised $22.5M.

Volante Technologies: The Payments as a Service company bagged $35M in growth equity financing led by Wavecrest Growth Partners. BNY Mellon, Citi Ventures, Poste Italiane and Visa also participated in the funding.

Nium, a digital international payments startup for individual and business customers, received an Electronic Money Institution licence from the FCA in the UK. Under this license, Nium will be able to offer digital payment services in the UK. Nium’s customers include one of Thailand's biggest banks KBank and UAE’s leading bank Mashreq.

UK open-banking startup Railsbank is taking on Wirecard Card Solutions, a UK business of Wirecard, the infamous ‘fallen-from-grace’ German payment provider. Wirecard faced a huge accounting scandal earlier in June. Before the collapse, Wirecard’s UK customers included Curve, ANNA Money, Revolut, Pockit, U Account, FairFX. Check out our blog post if you want to find more about the Wirecard scandal.

WorldRemit, a Transferwise competitor, acquired Sendwave, a payments company specializing in digital remittance services to East and West Africa. The purchase price is unknown. Sendwave will continue to operate under its own brand.

Investing

CommonStock, a group chat designed for sharing of investment knowledge, raised $9.7M in seed funding. The platform has more than 10,000 users and made $300M worth of trades. The platform is currently in beta.

Following a $200M Series G last week led by D1 Capital Partners, commission-free trading app Robinhood is now valued at $11.2B. Compared to the recent prior valuation of $8.6B in July 2020, the commission-free trading app pumped up its valuation $2.6B in a month. Click here to read more about Robinhood’s mad growth.

Canadian wealth manager CI Financial acquired US-based investment manager Balasa Dinverno Foltz for $4.5B. CI Financial has also acquired Wealthbar, an online portfolio management company in December 2018.