Industry News
Quarterspot is Shifting Its Business Focus
January 22, 2020Last week, several industry insiders reported receiving an email from NY-based company Quarterspot that said their agreement had been terminated.
The contents stated that the company is “shifting its business focus and will no longer be originating loans, but will continue to service currently outstanding loans.”
deBanked has confirmed that to be true. More information may be reported as it becomes available.
Broker Fair 2020 Announces Two Special Keynote Speakers
January 17, 2020Two special guests will speak at Broker Fair 2020 on May 18th in New York City. Scott Rasmussen and John Henry will complement a roster of leading professionals from the commercial finance industry. Broker Fair 2020 will be deBanked’s largest ever event.
TICKETS ARE ON SALE NOW AND EARLY BIRD PRICING IS STILL AVAILABLE!
Nav Co-founders Step Down From C-Level Positions
January 14, 2020
Levi King, a co-founder of Nav Inc., resigned as the company’s CEO on Tuesday. In a two-part explanation on LinkedIn, King wrote. “To be clear, I’m not burned out on Nav. I’m not aspiring to do something elsewhere, and I’m not leaving the company. I’m still dedicated and passionate about helping Nav succeed. And, I will – just in a different capacity moving forward.”
King will do that by serving as the executive chairman of the board of directors. President & COO Greg Ott will take over as CEO.
On LinkedIn, King further wrote that the company needs “a more qualified leader” to take Nav to the next level after he and co-founder Caton Hanson have successfully grown the company to the right point.
Hanson, who served as the company’s Chief Legal & Compliance Officer, also stepped down and updated his job role with Nav to that of being “Of Counsel” on a part-time basis. Unlike King’s message on LinkedIn, Hanson’s reads as a farewell.
“Thank you for believing in me and our dream,” he wrote. “Thank you for your part in helping Nav achieve what some have called ‘impossible’. I am grateful to know you, have had the opportunity to work alongside you and to call you friends (and for many of you — co-owners). I look forward to Nav’s next chapter – and mine.”
Greg Ott, the new leader of the company, is said in a Nav press announcement to have served as a strategic and organizational leader in both startups and Fortune 1000 corporations. Prior to joining Nav, Ott served as Vice President of Marketing for Intuit QuickBooks.
“Nav’s founders created a company that is truly unique in its ability to revolutionize how small business owners navigate and access capital to grow their business,” Ott commented. “I look forward to building upon Nav’s successes and furthering the company’s vision of aligning financing qualifications, predicting needs, and facilitating transactions between data providers, lenders, partners and small businesses.”
Hudson Cook Partner Appointed to CFPB Taskforce on Federal Consumer Financial Law
January 14, 2020Jean Noonan, a Partner at Hudson Cook, LLP, has been announced as one of the new members of the Consumer Financial Protection Bureau Taskforce on Federal Consumer Financial Law.
Seeking to produce research and legal analysis of US consumer financial laws, over the next year the taskforce will focus on “harmonizing, modernizing, and updating the federal consumer financial laws – and their impending regulations – and identifying gaps in knowledge that should be addressed through research, ways to improve consumer understanding of markets and products, and potential conflicts or inconsistencies in existing regulations and guidance,” according to a CFPB statement.
Noonan has served as General Counsel at the Farm Credit Administration and Former Associate Director of the bureau of Consumer Protection Credit Practice at the Federal Trade Commission. The Hudson Cook Partner has also focused her legal practice on fair lending, private and consumer protection matters, as well as consumer financial services.
“It is a true honor to participate in this historic undertaking by the Bureau,” Noonan said in a Hudson Cook statement. “I look forward to collaborating with the other members of the Taskforce who share my deep interest and experience in the field to help the Bureau to enhance and fortify our consumer financial laws and regulations.”
Visa Acquires Plaid in $5.3 Billion Deal
January 14, 2020
Yesterday it was announced that Visa and Plaid, the financial services company that helps business connect with customers’ bank accounts, have penned a deal that would see Visa purchase the San Francisco-based startup for $5.3 billion. The purchase price is roughly double Plaid’s previous valuation of $2.7 billion after its 2018 Series C investment of $250 million. Pending regulatory confirmation, the acquisition is expected to be completed in 3-6 months.
Founded in 2013 by Zach Perret and William Hockey, Plaid’s API enables companies to easily link with customers bank accounts and connects to a host of apps, such as Venmo, Robinhood, Coinbase, TransferWise, and Acorns. The company claims to have connected to one quarter of Americans with bank accounts and has expanded to both the UK and Canada.
Not being Visa’s first interaction with Plaid, the startup had previously received investment from its new owner, along with other recognizable names like Mastercard, Goldman Sachs, Citi, and American Express.
“This fits well, strategically,” commented Al Kelly, Visa’s CEO, in a call with investors on Monday. “We’re excited about new business and the ability for this to accelerate our revenue growth over time.”
Speaking to CNBC, Perret told CNBC that “We feel fortunate to have been there for the early days of fintech, and to have helped develop that ecosystem … This represents an important milestone, and the ability to work with Visa to make our products much bigger and better – both domestically and internationally.”
Whether such developments mean added features, further expansion to new territories, or something else entirely remains unclear. However, much like Google’s acquisition of Fitbit late last year, this merger witnesses the passing on of a treasure trove of data, with the curtain being pulled on the financial details of millions of transactions between startups and consumers; leaving Visa better positioned to understand and pre-empt what exactly is happening in industries where unpredictable disruption is valued above all else.
Pacific Equity And Loan Acquires Emerald Capital Funding
January 12, 2020
This week Pacific Equity & Loan, a hard money lender based in Washington state, acquired Emerald Capital Funding. Done to “provide more resources and investment opportunity to real estate investors in the Washington market,” according to a statement from PEL, the merger will see all of ECF’s staff move over to PEL.
“The move comes amid a rapidly evolving mortgage industry in specifically the private money and hard money lending sector,” ECF’s President and Founder Christopher Robinson commented. “We need to stay ahead of the curve and assure that our customer receive the best value, the best technology, and continue to work with a trusted local lender.”
Speaking to deBanked, Sang Yoon, PEL’s Director of Business Development and Co-founder said that he was excited to move forward, noting that it’s a “two heads are better than one situation. By merging or acquiring a company, we are better able to service our customers.”
The Scoop Behind The Primary Capital / Infinity Capital Funding Acquisition
January 6, 2020
This morning, Primary Capital announced that it had acquired the merchant cash advance division of Infinity Capital Funding. Infinity, which has been operating from California since 2006, began as an MCA company before expanding to offer small business loans as well. The acquisition will see Infinity’s thirteen years of data, technology, and merchant portfolios pass onto Primary.
Speaking on the acquisition, Primary Capital Managing Member David Korchak said that “anything that you can acquire with that much time behind it and that much experience behind it is excellent, and for us with what we’re trying to do it’s tremendous. It’s a big, massive help for us.”
As well as the intangible assets that will be conferred to Primary, Isaiah Kenigsberg will be joining their team. Having served as Infinity’s Financial Controller, Kenigsberg is now CFO at Primary.
The decision to acquire Infinity’s book came after Primary noticed that it was winding down its MCA operations, Korchak told deBanked. Seeing the value in obtaining such a trove of data proved too enticing to pass the Managing Member said, and Primary has been digging into the information obtained for the last three months.
For Korchak, something that has stood out from this analysis is the patterns that have emerged in the portfolio. “The thing that’s remarkable for these companies that have been around as long as them, is everyone seems to have clients that have taken 30 advances from them. They have clients that started back in ’07, ’08, that are still active merchants which is remarkable.
“The only difficulty is trying to analyze and say, ‘Why is this merchant after 30 different cash advances over a 12-year period still taking cash?’ And that’s really our model. And our goal for this year is to try and help subprime borrowers get out from having to take toxic debt like cash advances for their business. Ultimately, the data that we’re acquiring from ICF and this acquisition is going to help us study a lot of the transitions that MCA merchants have made since the beginning and see which ones have actually been able to get out of it.”
Asked whether there are any more acquisitions in the pipeline, Korchak responded, “Absolutely, we’re heavily data and service-driven for this year specifically, and we have a lot more to come.”
Jonathan Braun Has Checked In To Prison
January 2, 2020
Jon Braun, who Bloomberg Businessweek profiled in a 2018 story series, checked into FCI Otisville on Thursday. He was sentenced to 10 years in prison on May 28th for drug related offenses he committed a decade ago. He was originally scheduled to surrender on August 25th but he successfully delayed the date until today, January 2nd.
I have not attempted to contact Mr. Braun since the day of his sentencing. But purely by chance I shared an elevator with him in the Brooklyn Federal Courthouse on May 28th just mere minutes after he had been handed ten years. Given the opportunity, I asked him how he felt about what just happened.
“I hope it goes by quick,” he replied stoically.
