A flurry of financial technology companies sprouted following the 2008 crisis, offering among other things access to morally-conscious investing and credit to the underbanked—spaces that banking giants have been slow to approach or avoided.
But being new can also have growing pains that can be felt by consumers. Look to challenger, branchless bank Chime, which suffered an outage in October, leaving millions without access to their accounts, per Fortune:
“Unable to access his account for the bus fare, ‘I had to miss a whole day’s pay,’ [says Chime user Spencer Kremin]. And Kremin wasn’t the only Chime customer left out in the cold. Service outages affecting the company’s roughly 5 million customers left many not only disgruntled and concerned—but stuck at checkout lines, gas pumps, and restaurants, unable to access their money.
Kremin says he had plenty of company on Twitter where Chime customers were commiserating. ‘One lady bought four tires and she couldn’t pay for them, and people were getting the [police] called on them in restaurants,’ Kremin recalls. Part of the problem is that one of Chime’s key demographics happens to be people who, like Kremin says, live paycheck to paycheck—and for whom the loss of a day’s wages truly stings. From Wednesday, October 16 through Friday, October 18, cards were completely unavailable for transactions for a total of 4.5 hours, but other services (including the mobile app) were also intermittently unavailable during those days, the company said.”
A friend recently visited me from London. As I apparently do now in all conversations, I asked who she banked with and how she was paying for things in her trip to the U.S. The answer: Popular U.K. fintech Monzo, which offers bank accounts with a savings rate of up to 1.50%—better than most established consumers accounts that offer 0% here in the states. But when I inquired whether they would consider moving all their funds into Monzo, she said no.
She and her husband worry that newer fintechs won’t survive through a downturn—they were more willing to trust the traditional banks and a diversified approach to storing their funds.
Hardly a scientific survey by any stretch (and to be fair, Monzo’s partner bank in the U.S. is FDIC insured and even big banks like Wells Fargo have suffered outages), but It did strike me as interesting that this lingering concern exists among consumers in regards to fintechs.
Read the full story here.
‘Tis the season to be reconsidering your job position:
The interconnected world of travel and tech has gone through some serious turnover over the last week.
Uber CEO Dara Khosrowshahi’s old haunt, travel website Expedia, announced that both its CEO Mark Okerstrom and CFO Alan Pickerill would be stepping down. That comes after the duo clashed with the board over the company’s strategy. Per the Wall Street Journal, Google’s redesigned hotel-search function has been a headwind to such travel search companies.
Meanwhile, Alphabet founders Larry Page and Sergey Brin announced plans to step down as CEO and president Thursday—leaving Sundar Pichai in charge of the company currently undergoing antitrust scrutiny. While the company was built on a morally conscience, do-no-evil credo some two decades ago, it is now coming to terms with the sheer scale and impact of its search engine and the tech’s ability to affect companies, whole industries, perhaps even political outcomes.
Both Page and Brin had already been stepping away from day-to-day operations, and largely unseen in the public eye. The duo will remain on Alphabet’s board. At the same time, United Airlines announced Thursday that CEO Oscar Munoz will also transition to executive chairman of the board in May 2020, with President J. Scott Kirby taking over the role.
Lucinda here filling in for Polina until her return on Monday Dec. 9. In the meantime, please send deals to Lucinda.firstname.lastname@example.org.
- Kustomer, a New York-based enterprise customer service platform, raised $60 million in Series E funding. Coatue led the round and was joined by investors including Battery Ventures and Tiger Global Management.
- May Mobility, an autonomous Transportation-as-a-Service(TaaS) provider, raised $50 million in Series B funding. Toyota Motor Corporation led the round and was joined by investors including SPARX Group, Millennium Technology Value Partners, Cyrus Capital Partners, BMW iVentures, and Toyota AI Ventures.
- Flow, A New Jersey-based cross-border e-commerce solution for brands and retailers, raised $37 million in Series B funding from New Enterprise Associates (NEA), American Express Ventures, and Latitude Ventures.
- AutoPets, an Auburn Hills, Mich.-based maker of self-cleaning cat litter boxes, raised $31 million. Pondera Holdings led the round.
- Starship, a New York-based fintech focused on HSAs, raised $7 million in funding. Valar Ventures led the round.
- Infinitum Electric, an Austin-based maker of IoT-enabled electric motors, raised $12.5 million Series B round of financing. Cottonwood Technology Fund led the round and was joined by investors including Chevron Technology Ventures and AJAX Strategies.
- Otis, a New York-based fintech for investing in art and other alternative assets, raised $11 million in Series A funding. Maveron led the round.
- Brideside, a Chicago-based concierge bridal and bridesmaid shopping firm, raised $7 million. Beringea led the round with participation from Sawdust Ventures.
- Proteus Motion, a New York City-based maker of rehab technology formerly known as Boston Biomotion, raised $3.8 million led by NBA Commissioner Emeritus David Stern and Harris Blitzer Sports & Entertainment.
- Bond Pet Foods, a Boulder biotech company making animal-free and protein-rich pet food, raised $1.2 million.
PRIVATE EQUITY DEALS
- Thoma Bravo agreed to acquire Instructure, a Salt Lake City-based maker of educational software, for roughly $2 billion.
- Wynnchurch Capital acquired Clyde Industries, an Atlanta-based provider of services for the global pulp and paper industry. Financial terms weren't disclosed.
- Crédit Mutuel Equity invested in Care Health Group, a Canada-based pharmacy group. Financial terms weren't disclosed.
- StonePoint Materials, backed by Sun Capital partners, acquired Road Builders, a Greenville, Ky.-based materials and paving construction operation. Financial terms weren't disclosed.
- Canopy Biosciences, backed by Ampersand Capital Partners, acquired Core Diagnostics, a Hayward, Calif.-based provider of biomarker analysis services for biopharmaceutical researchers. Financial terms weren't disclosed.
- Ardian made a minority investment in S&H, a Paris-based consulting firm focused on HR and finance support functions. Financial terms weren't disclosed.
- Gemspring Capital invested in Shrieve Chemical Company, a Texas-based marketer of industrial chemicals, performance fluids and specialty lubricants. Financial terms weren't disclosed.
- Permira closed its acquisition of Cambrex Corporation, a New Jersey-based small molecule firm providing drug substance, drug product and analytical services across the entire drug lifecycle. Financial terms weren't disclosed.
- The Health & Safety Institute, backed by Waud Capital Partners, acquired Martech Media, a Texas-based industrial tech training provider. Financial terms weren't disclosed.
- Kinderhook Industries majority recapped South Carolina-based Long’s Drugs and California-based PharMedQuest Pharmacy Services, combining on-site and central fill pharmacy services and healthcare facilities that focus on underserved populations. Financial terms weren't disclosed.
- Snow Software, acquired Embotics, a Kanata, Ontario-based hybrid cloud management. Financial terms weren't disclosed.
- Brainshark acquired Rekener, a Charlestown,Mass.-based sales scorecard provider. Financial terms weren't disclosed.
- NexPhase Capital agreed to sell Flexible Architecture & Simplified Technology a New Jersey-based software company for the life insurance and annuity industry, to Verisk Analytics for about $193.5 million.
FIRMS + FUNDS
- Loyal Valley Capital closed its second advantage fund at $465 million.
- TA Associates hired Charles Ha as a Vice President in its Boston office as a member of the North America Technology Group.
- Transformation Capital Partners hired Mike Dixon, formerly General Partner at Sequoia Capital, as its third Managing Partner.
- H.I.G. Capital named Rick Rosen and Brian Schwartz have been named co-presidents. H.I.G. also promoted Doug Berman to the head of U.S. private equity; Wolfgang Biedermann has been promoted to executive managing director and head of Europe buyouts; and John Bolduc, executive managing director, will continue overseeing H.I.G.’s credit funds.
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