Fintech

Peer-to-peer lending’s demise is cautionary tale

13 Dec 2021

The business of directly linking savers and borrowers is all but dead after pioneers Zopa and $3 bln LendingClub pulled out. Creating an asset class requires regulatory buy-in, while bank funding costs are hard to beat. Both lessons are relevant for newer fintech upstarts.

Capital Calls: UBS, Pfizer, Peloton

13 Dec 2021

Concise views on global finance: An appeals court has reduced a penalty for the Swiss bank by 60% for tax wrongdoings; the U.S. pharma group is buying a drugmaker to bolster its post-pandemic growth options; real risks are a bigger threat to the bike-app company than fake ones.

Jack Dorsey’s fintech firm stumbles out of block

9 Dec 2021

Renaming Square to Block should have been bottom on his to-do list. Bigger priorities include integrating its $29 bln purchase of Afterpay, improving profitability and fending off rivals. Dorsey is more of a visionary. When it comes to Square, he’ll have to get his hands dirty.

Nubank becomes LatAm’s biggest, and riskiest, bank

9 Dec 2021

An IPO worth above $40 bln tops even Itaú Unibanco. At roughly 10 times tangible book value it’s a pricey bet that a Warren Buffett-backed Brazilian fintech can disrupt the region’s market before established players react, without missteps, and with immunity from economic perils.

The Exchange: Breakingviews at Reuters Next

9 Dec 2021

At the global conference, our columnists interviewed the movers and shakers at Ola Electric, Philip Morris, ViacomCBS and Klarna about disruption at scale in India, the challenges of making bold corporate transitions in tobacco and media, and Europe’s fintech frenzy.

Visa-Mastercard payments duopoly has staying power

8 Dec 2021

The $770 bln duo’s shares are down 5% in 2021. Investors worry that Amazon and banks will negotiate sweeter terms, or that fintech will cut out middlemen. But even if they have to give up some revenue, none of the threats are existential. Current valuations are too pessimistic.

Apple’s ugly China deal mostly bought time

8 Dec 2021

The iPhone maker in 2016 secretly promised Beijing $275 bln of investment in exchange for relaxing pressure on its business, per a new report. The sum exceeds its sales in the country since then. Boss Tim Cook may have had little choice, but it muddles the return calculus.

Alibaba’s new CFO signals shifting priorities

6 Dec 2021

The Chinese e-commerce company, whose market value has halved to $300 bln this year, is replacing finance chief Maggie Wu. During her seven-year tenure, Alibaba successfully courted foreign investors. Successor Toby Xu’s experience suggests there will be a greater focus at home.

Alibaba looms larger than Beijing in Weibo IPO

3 Dec 2021

China's $8 bln answer to Twitter is readying a secondary listing in Hong Kong. The company’s sway over public opinion means it is a frequent target of censorship campaigns and regulatory crackdowns. That makes the e-commerce giant's 30% stake a political liability for both.

Jack Dorsey’s exit puts Twitter in play

1 Dec 2021

Dorsey’s departure sets up the social network as an attractive target for his other firm Square in the race to build a super-app. Even PayPal or Salesforce may take another stab. Regulators may get in the way but China’s WeChat shows why the effort may be worth the headache.

Super-app Grab rides high into New York debut

1 Dec 2021

The Southeast Asian giant held firm in a difficult year. It’s on track to hit targets set from its record $31 bln SPAC merger, supporting a rich 13 times sales valuation multiple. Margins in its ride-hailing business show the promise of its food-delivery-to-fintech ambitions.

Capital Calls: Wise, Swedish oil

30 Nov 2021

Concise views on global finance: The 8 bln pound money-changer raised its revenue targets; $10 bln Swedish oil company Lundin Energy may be considering M&A options.

Pinduoduo’s strategy sows further seeds of doubt

25 Nov 2021

The Chinese e-commerce company rocketed to relevance by single-mindedly challenging Alibaba. Following policy crackdowns and rising costs, it’s expected to swing back to a quarterly operating loss. New boss Chen Lei would benefit from looking beyond farming for additional growth.

Paytm battering targets raw valuation underbelly

24 Nov 2021

India’s fintech giant is worth $13 bln after a 31% post-IPO drop. That remains exuberant at 26 times sales. The company is still growing, but revenue pressure is a concern, and costs are high. Success requires official help on fees and lending. That’s far from guaranteed.

Paytm IPO ends Morgan Stanley India winning streak

19 Nov 2021

The fintech firm’s 27% first-day drop contrasts with pops the Wall Street giant oversaw for Nykaa and others. Paytm execs and powerful buyers and sellers like Alibaba, SoftBank, and BlackRock all played a role in the fiasco. But as lead bank Morgan Stanley has most to lose.

Paytm IPO misery leaves Indian tech looking West

18 Nov 2021

The Alibaba and SoftBank-backed fintech company plunged a bruising 24% on its debut, in contrast to huge first-day pops for Nykaa and Zomato. The market is mispricing tech IPOs. It revives the debate about listing in a New York market more accustomed to money-losing firms.

Capital Calls: SEC turns tables on vote advice

18 Nov 2021

Concise views on global finance: The U.S. watchdog wants to reverse Trump-era rules restricting firms that advise investors how to vote on corporate matters.

African telcos finally get their big fintech prize

8 Nov 2021

After years of delay, Nigeria’s central bank is letting phone firms offer basic banking via handsets. For the regulator, it’s a way of staying relevant as consumers dabble in cryptocurrencies. For operators like MTN and Airtel Africa, it’s a multibillion-dollar payday.

UBS’s U.S. wealth management push lacks oomph

26 Oct 2021

The Swiss bank plans to lend more to wealthy clients while reaching new ones through a digital service. That should boost margins in the region but faces competition from rivals like Morgan Stanley. CEO Ralph Hamers would be better off bulking up through M&A, or selling out.

Wise’s profit-purpose balancing act may get harder

19 Oct 2021

The $13 bln fintech that wants to disrupt currency transfers is cutting foreign-exchange fees to win more users. Yet meeting investors’ revenue expectations while slashing prices looks tricky. CEO Kristo Käärmann may eventually have to irk either shareholders or customers.