NEWSLETTER 6.0
MAY 15, 2024
Mercury’s Out of This World Acquisition
Kelvin Sekigahama
Mercury, founded in 2017 by Immad Akhund, Max Tagher, and Jason Zhang, has been one of the most phenomenal B2B companies that have helped over 100,000 startups since its launch. Most recently the company is expanding into new territory and takes on new challenges as it enters the consumer banking industry. This acquisition and expansion does not come as a surprise as Akhund stated “We already have a few hundred thousand users of our business banking product, and a lot of people have expressed that they want a personal banking product,” in an interview that was conducted by Techcrunch. However, the real surprise is Mercury choosing to add this additional feature even though the company was recently scrutinized for allowing “foreign companies to open accounts through one of its partners, Choice Bank”(Azevedo). Choice Bank created many problems for Mercury as their services were seen as being used inappropriately and were not being vetted properly. They overcame these claims as it was justified that the whole fintech industry as a whole was being scrutinized. With this in mind the objective of Mercury was to “own both the business and person” as this would allow them to optimize their strategic planning and maximize their companies outreach. Many of the things that are involved on the B2B side could also be used to leverage the consumer side of business. Some of the integrations that mercury will implement with their consumer banking is charging a subscription fee of $240 dollars annually for the services of their company. This could directly impact startup companies that are not willing to pay this fee and they may look for other services aside from Mercury. This addition is very justifiable as after the SVB crisis, 40% of startups began using Mercury. In addition to this Mercury reported profitability for 7 consecutive quarters, and customer volume grew to 95 billion by January 2024. Mercury as one of the most established B2B companies continues to show exponential growth, branching out into different industries like consumer banking as it paves the way for other businesses as well.
Alex Crouse
Carbon Decoupling in the EU: The Role of Fintech and the ETS
The European Union’s Emissions Trading System (ETS) has proven to be one of the most effective climate policies to date. Launched in 2005, the ETS was the first and is currently the largest carbon emissions trading scheme in the world. Fintech plays a crucial role in optimizing the effectiveness of ETS emissions reduction. Carbon Delta, a Zurich based FinTech, utilizes artificial intelligence and big data analytics to help companies manage carbon assets more effectively, simultaneously enhancing public transparency.
The ETS functions as a cap-and-trade system, meaning a set number of carbon permits are issued for all industries covered by the ETS and then they are bought and sold based on individual carbon outputs. This system has reduced carbon emissions in the EU by 47% as of 2023, and emissions are scheduled to fall by 4.3% each coming year until 2040, when no new permits will be issued. These carbon permits serve not only to reduce carbon outputs but also generate revenue to fund investments in low-carbon innovation and clean energy transitions. As a result of carbon trading, the ETS has produced over EUR 153 billion in revenue since 2013.
Zurich-based fintech firm, Carbon Delta, is renowned for its specialization in climate risk analysis and plays a pivotal role in enhancing the operational efficiency of the EU's Emissions Trading System. Utilizing big data analytics, Carbon Delta processes vast amounts of environmental and financial data to provide emissions assessments and predictive market insights. In joining big data and AI, Carbon Delta can provide global investors a better understanding of the impact of climate change on their investment portfolios. Furthermore, their use of blockchain technology ensures that emissions tracking is tamper-proof and transparent, increasing accountability for firms and providing clear data for public confidence. Beyond maximizing financial and environmental outcomes, Carbon Delta's technology aids companies in maintaining compliance with evolving regulations, mitigating risks associated with non-compliance and enhancing their overall sustainability profile.
By demonstrating the effectiveness of financial technologies in enhancing transparency and efficiency, the EU ETS serves as a model that other regions might emulate to facilitate their own environmental and economic goals. Additionally, the substantial revenue generated from the trading system serves to discredit criticisms of a green energy transition being economically unviable. With the rising cost of oil and imminent environmental decline, the US and other countries may consider the ETS as a possible blueprint for the path towards a carbon neutral future.
Tabapay what it is and what's currently happening with it:
Connor Menke
Tabapay is a payments software company that is designed to speed up money moving from banks and financial technology companies. Tabapay’s goal is to scrap the older system of using checks and automatic clearing houses, to automatic online transfers of money. Tabapay has innovated a platform to allow instant money transfers from the bottom-up which has eliminated costs in the money transfer process by removing the middleman creating a stable and direct method for money transfers. Many major credit card brands such as Visa and Mastercard use Tabapay, and their clients stretch even further to over 2,500 other companies and banks. The growth that this company has seen over the last 7 years since being founded can be attributed to their business model of targeting payments and payouts. With this model Tabapay has focused its efforts on changing the money transfer system as a whole, developing account funding, business to business services, debt repayment, and many more services. Working into many different fields of money transferring, and successfully growing to be one of the largest competitors in the market has been remarkable. Recently Tabapay has begun to buy assets from Synapse, a banking-as-a-service startup, that has had trouble with the current macroeconomic forces, this has adversely affected clients and platforms, which has led to layoffs and more recently Synapse filing for bankruptcy. Acquiring these assets will continue to help Tabapay grow their business and effectively reach more businesses to help with their money transfers and advancement.