Private Markets, Angel and Secondary Investing, Sacra

Sacra

Private Markets, Angel and Secondary Investing

Bringing transparency to private markets so investors, founders, and employees can build on conviction. Sacra delivers deeply researched insights on the private companies shaping tomorrow's markets. By surfacing the data, context, and operator perspective that are missing from private markets today, we help secondary buyers and sellers price equity accurately and unlock liquidity for the people building these businesses.

Private Capital Markets

<ul><li>Mercury is becoming the Booking.com of startup banking, aggregating demand using free checking accounts and the best banking experience to commoditize suppliers (partner banks) who pay for access to Mercury’s customer base.</li><li>SVB got unbundled during COVID and then unwound completely in 48 hours, with Mercury and Brex initially emerging as the primary beneficiaries, with Mercury adding $2B+ in deposits and thousands of customers in a week.</li><li>SVB’s growth left it vulnerable to bottom-up disruption from Mercury and Brex (both founded in 2017), which offered bank accounts and corporate cards to underserved startups outside the core Silicon Valley clique (e.g., international startups).</li></ul>

Mercury is becoming the Booking.com of startup banking, aggregating demand using free checking accounts and the best banking experience to commoditize suppliers (partner banks) who pay for access to Mercury’s customer base.SVB got unbundled during COVID and then unwound completely in 48 hours, with Mercury and Brex initially emerging as the primary beneficiaries, with Mercury adding $2B+ in deposits and thousands of customers in a week.SVB’s growth left it vulnerable to bottom-up disruption from Mercury and Brex (both founded in 2017), which offered bank accounts and corporate cards to underserved startups outside the core Silicon Valley clique (e.g., international startups).

Mercury: The Unbundling Of Silicon Valley Bank

<ul><li>Plaid (2021 valuation: $13.4B) grew 47% in 2021 to reach $250M in revenue and crossed 500M+ connected bank accounts acting as a middleware for fintechs like Block (NYSE: SQ) and Robinhood (NASDAQ: HOOD) to connect to their customers’ bank accounts for moving money to their app or fast-tracking customer onboarding.</li><li>Plaid became a consumer brand—going beyond serving as a white-label account linking service—by putting its logo on the bank linking experience inside fintech apps, sitting in the middle of a 3-sided, Visa-like network of 500M customers, 11,000 banks, and 2,600 fintechs.</li><li>In recent years, data aggregation has stagnated and become commoditized—the major players Plaid, Yodlee, Finicity (acquired by Mastercard for $825M) and MX (2020 valuation: $1.9B) build proprietary connections with only the top ~500 banks while outsourcing development to offshore software companies in India or reselling connections from other data aggregators for the long tail of 11,000+ banks.</li></ul>

Plaid (2021 valuation: $13.4B) grew 47% in 2021 to reach $250M in revenue and crossed 500M+ connected bank accounts acting as a middleware for fintechs like Block (NYSE: SQ) and Robinhood (NASDAQ: HOOD) to connect to their customers’ bank accounts for moving money to their app or fast-tracking customer onboarding.Plaid became a consumer brand—going beyond serving as a white-label account linking service—by putting its logo on the bank linking experience inside fintech apps, sitting in the middle of a 3-sided, Visa-like network of 500M customers, 11,000 banks, and 2,600 fintechs.In recent years, data aggregation has stagnated and become commoditized—the major players Plaid, Yodlee, Finicity (acquired by Mastercard for $825M) and MX (2020 valuation: $1.9B) build proprietary connections with only the top ~500 banks while outsourcing development to offshore software companies in India or reselling connections from other data aggregators for the long tail of 11,000+ banks.

The Future Of Plaid's $250M Screen Scraping Business

<ul><li>Our goal was to get our engineers out of the weeds and make Retool our force multiplier.</li><li>Retool provides dashboards, but you can also view a customer&#39;s configuration and then with one click, change their configurations or send emails very easily.</li><li>For Lithic, it’s been the last 10% of customization that’s delivered the majority of the value.</li></ul>

Our goal was to get our engineers out of the weeds and make Retool our force multiplier.Retool provides dashboards, but you can also view a customer&#39;s configuration and then with one click, change their configurations or send emails very easily.For Lithic, it’s been the last 10% of customization that’s delivered the majority of the value.

Ronnie Caspers, Product At Lithic, On Using Retool For Fintech Ops

Cross River Bank / Private Capital Markets

<ul><li>We see ourselves as the center of it.</li><li>Where we see ourselves is a mix of technology.</li><li>The evolution has really broadened where you can go with these financial services, which is really exciting because nowadays you can go to several players like ourselves to get all you need.</li></ul>

We see ourselves as the center of it.Where we see ourselves is a mix of technology.The evolution has really broadened where you can go with these financial services, which is really exciting because nowadays you can go to several players like ourselves to get all you need.

Anthony Peculic, Head Of Cards At Cross River Bank, On Building A Fintech one-stop Shop

<ul><li>We have raised more than $90M in funding at this point in Seed and Series A.</li><li>Highnote is bringing a very differentiated approach to the market because what we saw in the industry is one of two models.</li><li>What we have already built and gone live with is a full-stack card issuance platform with a bare-metal connection to both Visa and MasterCard.</li></ul>

We have raised more than $90M in funding at this point in Seed and Series A.Highnote is bringing a very differentiated approach to the market because what we saw in the industry is one of two models.What we have already built and gone live with is a full-stack card issuance platform with a bare-metal connection to both Visa and MasterCard.

Deb Bardhan, Chief Business Officer At Highnote, On Incentive Structures In Card Issuing

United States

API-based platform for developers to issue and manage virtual and physical payment cards

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Lithic (LITHIC US)

Mercury: The Unbundling Of Silicon Valley Bank

TL;DR: As Silicon Valley Bank collapsed last week, $3B+ in funds flowed through the startup ecosystem to other startups, particularly neobanks...

Sacra

The Future Of Plaid's $250M Screen Scraping Business

Plaid (dataset) indexed on the explosive growth of consumer fintech, growing 50% annually for the last 5 years and hitting $250M in revenue in...

Sacra

Ronnie Caspers, Product At Lithic, On Using Retool For Fintech Ops

Sacra interview with Ronnie Caspers, Product at Lithic, on the fintech ops use case for Retool.

Sacra

Anthony Peculic, Head Of Cards At Cross River Bank, On Building A Fintech one-stop Shop

Sacra interview with Anthony Peculic, Head of Cards at Cross River Bank.

Sacra

Deb Bardhan, Chief Business Officer At Highnote, On Incentive Structures In Card Issuing

Sacra interview with Deb Bardhan, the Chief Business Officer at Highnote.

Sacra

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