August 11, 2017

Coinbase capitalizes on crypto-surge
Cryptocurrencies have been on a rocketship this year. Bitcoin had briefly hit $1,000 at the end of 2013, and then spent 3 years trying to recover from a huge decline. It ended 2016 priced at just under $1,000, but has more than tripled to $3,400 so far this year. The same has been true for Ethereum and other cyptos. On the strength of interest, Coinbase, a provider of retail and institutional digital currency exchanges, raised a $100MM Series D round at a $1.6 billion valuation. This is up from a rumored $500MM valuation in 2015.

Fidelity launches Coinbase integration
Prior to the Coinbase Series D announcement this week, Coinbase and Fidelity publicly announced their partnership which allows Fidelity users to track their Coinbase digital currency balances through the Fidelity online portal. Customers cannot trade through Fidelity, but there should be no surprise if the two companies launch more functionality over the coming year. Other financial firms have integrated with Coinbase before – Hedgeable, a robo-advisor, has had a Coinbase integration for roughly two years which allows Hedgeable to buy and sell Bitcoin on your behalf as part of your automated asset allocation strategy.

Student lending startup pursues sale
If you are tired of hearing about SoFi, a different student lender made headlines recently with the news that it has hired Barclays to assist in a transaction. Earnest, a San Francisco student lending startup that raised $75MM of equity in a Series B round in 2015, is pursuing a “dual track” process that could result either in a sale of the company or in raising $50MM of fresh capital. The company, with over 200 employees, is seeking a sale price of around $200MM, and word is that they have at least one bid for an undisclosed amount.

Startup digital bank acquires luxury department store bank
Back in May, I covered how UK-based digital banking startup Tandem Bank lost its banking license due to lack of regulatory capital. Tandem quickly made other plans, and recently announced that it is acquiring Harrods Bank, the banking arm owned by luxury department store Harrods. The acquisition will give Tandem a banking license, $104MM in capital, and a $260MM loan book. However, Harrods Bank lost about $11MM last year, so the acquisition is not a slam-dunk. Tandem will still need navigate a successful launch of its own products while burning cash on the digital bank and legacy bank side. The transaction has not yet been approved by regulators.