In this week’s edition of The Interchange, we touch on M&As in the fintech space as AngelList nabbed a startup and Uplift got bought for less than it raised in venture funding. We get into those deals, and much more. Want to receive this in your inbox every Sunday? Sign up here.
Shopify’s credit bet, Jeeves’ update and AngelList’s second buy
Last week, Shopify announced a new offering — Shopify Credit, a business credit card designed exclusively for its merchants. The new product marked Shopify’s first pay-in-full business credit card, said Shopify president Harley Finkelstein. It is powered by Stripe and issued by Celtic Bank, “and accepted everywhere Visa is,” he added. My editor and I were intrigued by the fact that Shopify insisted it would charge no fees — no late fees, no foreign transaction fees, and no interest. But upon further digging into the fine print, as fellow fintech enthusiast Sar Haribhakti tweeted about, it turns out that Shopify is also describing the new offering as a “pay in full credit card.” So, merchants have 25 days after the close of their monthly billing cycle to pay their balance. And if they don’t? Well, according to Shopify’s website, the card will be locked and the merchant won’t be able to make any new purchases until the balance has been repaid.
That explains how/why the company is not charging any interest! Unfortunately, I was traveling early last week and didn’t get to actually speak to Harley — our interview was over email, and somehow this little tidbit of information got left out. It certainly was not something that Shopify publicized. It feels like retail/commerce companies deciding to go into the credit card space should proceed with some caution, though, if Apple’s experience is any indication. The Information did a deep dive last week on how “the tech giant and the Wall Street titan went from ‘the most successful credit card launch ever’ to Goldman trying to exit the partnership.”
I also gave us an update on fintech startup Jeeves, which did something that us reporters wish more (actually, all) private companies would do — share financials. We’ve been covering the goings-on at Jeeves since the startup first emerged from stealth in July of 2021, announcing $131 million in debt and equity financing from investors such as Andreessen Horowitz (a16z). It then announced a $57 million Series B exactly three months later. Jeeves is among the many players in the corporate card space — but CEO and founder Dileep Thazhmon believes it’s got an advantage over competitors in that it can serve clients in Latin America (its biggest market) and other regions by offering cards that can be paid in local currencies. That’s a big deal, he says, because businesses can save money on foreign transaction fees, for example. He told us: “This is a really big differentiator because it means we’re the only expense management company that can issue local cards in Latin America, North America and Europe. It takes time to build rails in other countries. If you look at U.S.-based expense management platforms, they cannot onboard a company headquartered in Mexico. If you look at Mexican expense management providers, they cannot onboard a company [that] is headquartered in the U.S. Jeeves can do both.” Read about how Jeeves entered 2023 with annualized revenue of $40 million, its recent expansion beyond corporate cards into prepaid cards and cross-border payments, and what its plans for the future are here.
I also got the exclusive on some big news out of AngelList — its purchase of fintech startup Nova and formal expansion into the private equity space. I talked both with AngelList CEO Avlok Kohli and Nova founder Pradyuman Vig about how the deal came about and what the expansion means for the organization. On Friday’s episode of the Equity podcast, Alex Wilhelm, Kirsten Korosec and I dug into what some might consider an unexpected move for AngelList — which has historically served early-stage investors. Hint: We thought it might have a little something to do with its 2022 raise that was co-led by a global investor that rhymes with Kiger. Private equity talk aside, it’s always cool to see a young founder with not just one exit