Welcome to the latest in fintech news, where cutting-edge technologies and innovative financial solutions converge to reshape the landscape of banking, investing, and payments. Stay tuned as we explore the trends driving the future of finance!
OpenAI’s Sam Altman and Other Tech Leaders to Serve on AI Safety Board (WSJ)
The Biden administration has established the Artificial Intelligence Safety and Security Board to address AI-related threats to critical infrastructure. Led by Homeland Security Secretary Alejandro Mayorkas, the board includes industry leaders like Sam Altman, Jensen Huang, Satya Nadella, and Sundar Pichai, as well as academics, civil-rights leaders, and public officials. The board aims to develop recommendations for safeguarding sectors like power grids, transportation, and manufacturing against potential disruptions caused by AI advancements. While AI offers opportunities for efficiency and safety, it also poses risks if not deployed responsibly. President Biden’s executive order on AI underscores the need for government oversight, with companies required to report systems posing serious risks. Despite bipartisan concerns about stifling innovation, the administration emphasizes the importance of managing AI through both administrative actions and legislation. The board, consisting of various stakeholders, will convene quarterly to address AI-related challenges and opportunities in critical infrastructure. Read more
Elon Musk’s xAI Startup Closes In on $6 Billion Fundraising (Bloomberg)
Elon Musk’s AI startup, X.AI Corp., is close to finalizing a funding round of $6 billion, which would value the company at $18 billion. Sequoia Capital and other investors are expected to participate in the deal. This funding round aims to bolster X.AI’s competitiveness against major AI players like OpenAI. Musk, a founding member of OpenAI, has had a complex relationship with the startup in recent years. Earlier reports indicated that X.AI was in talks to raise $3 billion to $4 billion, but the latest development suggests a larger investment. Read more
US seeks 3 years prison for Binance founder Zhao (Reuters)
U.S. prosecutors are seeking a three-year prison sentence for Changpeng Zhao, the founder and former CEO of Binance, the world’s largest cryptocurrency exchange, after he pleaded guilty to money laundering violations. The request comes following Binance’s admission to evading anti-money laundering requirements and agreeing to a $4.32 billion penalty. Prosecutors argue that Zhao’s willful violations warrant a sentence above federal guidelines, given Binance’s failure to report suspicious transactions and its support for illegal activities. Zhao’s defense has requested probation, citing his acceptance of responsibility, substantial fine, and efforts to improve compliance. Read more
The Pentagon is spending billions on Big Tech and Silicon Valley startups as it goes all-in on AI (Quartz)
The Pentagon and Silicon Valley are increasingly collaborating, with contracts worth up to $53 billion awarded to major tech firms between 2019 and 2022. This partnership, driven by the military’s interest in AI and cloud computing, marks a shift in defense contracting. Notably, startups are also receiving significant military funding, reflecting a growing trend. The Defense Department’s Office of Strategic Capital aims to further facilitate this collaboration by linking startups with private capital. Read more
Salesforce is ditching its deal to buy Informatica, report says (Quartz)
Salesforce’s stock saw an increase after reports emerged that it has abandoned plans to acquire Informatica, a cloud data management firm. The potential deal, valued around $10 billion, would have been Salesforce’s largest acquisition since buying Slack in 2021. While both Salesforce and Informatica stocks dropped about 7% upon news of the potential acquisition, Salesforce shares recovered some losses, rising by 2% on Monday. Salesforce, known for its acquisitions, has bought over 70 companies since 2006, with Slack being its biggest purchase at $28 billion. With a focus on AI and serving enterprise customers, Salesforce faces competition from other tech giants like Google in targeting business clients. Read more
EU parliament passes laws strengthening AML measures (The Paypers)
The European Parliament has approved new legislative measures to strengthen the EU’s efforts against money laundering and terrorist financing. These laws ensure immediate access to beneficial ownership information for individuals such as journalists and civil society organizations, expand the authority of Financial Intelligence Units, and introduce enhanced due diligence measures for financial entities. Additionally, the legislation imposes scrutiny on ultra-high-net-worth individuals, establishes an EU-wide cash payment limit, and creates a new authority, AMLA, to oversee implementation and enforcement. These measures reflect citizen demands and aim to prevent tax evasion and enhance cooperation on corporate taxation. Read more
Amsterdam’s Moodus acquires assets of fintech firm ACTOLL to grow and innovate in the donation sector (Silicon Canals)
Amsterdam-based Moodus has acquired the assets of French fintech company ACTOLL, expanding its presence in France and enhancing innovation in the donation sector. ACTOLL, established in 1996, specializes in information systems for tolls and public transport, with plans for international expansion. Moodus, founded in 2016, provides a platform for contactless donations, addressing the gap in digital donations. With thousands of terminals across Europe, Moodus serves various sectors and plans further expansion. Read more
Gideon Valkin launches Andrena Ventures to power Europe’s fintech spinoffs (Tech.eu)
Gideon Valkin, previously associated with Monzo, ClearScore, and Entree Capital, has launched Andrena Ventures, a $12 million solo GP fund focused on supporting European fintech startups at the Pre-Seed and Seed stages. The fund’s first investment will be in Nustom, an AI startup founded by Monzo’s co-founding CTO. Andrena aims to invest in subsidiaries of successful companies spun out by former employees, leveraging the “spinoff flywheel” observed across Europe. Backed by notable investors including Entrée Capital, RTP Global, and founders of Wise and Teleport, Andrena’s debut fund has already reached its first close, with a final close expected later this year. Valkin highlights Europe’s emerging power network of founding teams and their potential to tackle pressing issues across fintech, AI, climate-tech, and enterprise software. Read more
Nayax acquires Brazilian paytech VMtecnologia to propel LatAm expansion (Fintech Futures)
Nayax, an Israeli fintech company, has completed the acquisition of VMtecnologia, a payment technology provider based in Brazil, specializing in self-service retail solutions. The deal, valued at approximately $27 million, includes an initial payment of $13 million, with the remainder to be settled over the next three years based on management retention and revenue growth. Additionally, there is a potential further payment of $5 million based on achieving specific growth objectives. VMtecnologia’s technology is expected to bolster Nayax’s expansion into Latin America, leveraging its extensive retailer network across Brazil. With VMtecnologia’s revenue of $8.5 million last year and an EBITDA margin exceeding 30%, Nayax aims to advance its presence in the automated self-service payments sector in the region. Read more
From $200 million valuation to insolvency: Insurtech startup Sproutt heading for bankruptcy (Calcalistech)
Israeli insurtech startup Sproutt, once valued at $200 million, is now facing insolvency less than three years after its founding in October 2017. Despite raising $38 million in funding and securing investments from prominent insurance companies like Harel Insurance and Menorah Mitvtachim, the company has struggled to generate income and has accumulated significant debts. Sproutt attributes its downfall to wrong strategic decisions resulting in heavy expenses and estimated losses of approximately $33 million. Specifically, its subsidiary Aktibo, which centralized the company’s activities in the U.S., failed to generate enough revenue to cover marketing expenses due to various reasons, including minimal economic savings for consumers and a preference for purchasing policies through traditional insurance agents. Despite attempting a strategic shift in 2022 to cooperate with agents and insurance agencies, Sproutt’s financial situation worsened due to decreased investments and unsuccessful marketing ventures, ultimately leading to insolvency. Read more
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