Issue #19

AI fintech evicted after raising $100 million, China keeps landing on moon, McDonald's loses Big Mac battle, and more.

News from May 30 - June 6, 2024

Monzo Breaks Even

Monzo, the London-based digital bank, reported its first annual profit after nearly a decade. CEO TS Anil: “We’re a rare company that has delivered scale, growth, and profitability.”

Despite economic pressures, Monzo’s loan book expanded significantly, with increased provisions for expected credit losses. The bank is set to expand into the US and Europe, starting with Ireland. Recently, Monzo secured major funding led by Alphabet’s CapitalG, boosting its valuation over £4bn.

Anil: “It’s flattering to be compared to big banks that have been around much longer. We’re building a company for the ages with a huge runway ahead.”

Source

AI Fintech Evicted After Raising $100 Million

AI mortgage startup LoanSnap faces multiple lawsuits and eviction from its headquarters, causing employee uncertainty. Despite raising $100 million, creditors, including Wells Fargo, allege that LoanSnap owes them over $2 million dollars. A former employee: "The current state is a result of terrible leadership and overspending."

LoanSnap also dealt with regulatory issues, including a $75,000 settlement in Connecticut for unlicensed mortgage loan activity. The situation worsened with missed payrolls and staff reductions from over 100 to less than 50.

Despite these challenges, LoanSnap received positive recognition, joining Visa’s fintech program and Nvidia’s AI startup program. An employee remarked, “It’s really not hard to find numerous lawsuits and complaints,” questioning how the company gained such accolades.

Source

Stripe Restricts India Access

Global digital payments startup Stripe has restricted new account sign-ups in India to an invite-only model, citing regulatory challenges. Businesses must now request invites to join, with Stripe focusing on supporting firms with international expansion.

Existing users remain unaffected, but new businesses must seek alternatives for payment processing.

Source

Bulletin Board

• China Keeps Landing on Moon. China landed on the Moon's far side, collecting samples in a historic first. This marks China’s fourth Moon landing, highlighting their rapid progress compared to NASA’s delayed Artemis Program. Greg Autry, Arizona State University: "If China wins this race, their model of authoritarian state socialism will gain in appeal and America will look more dysfunctional than ever." As China plans an astronaut landing by 2030, the U.S. faces pressure to maintain lunar leadership. Source
• FCA Rethinks Shaming. The UK's Financial Conduct Authority (FCA) is revising plans to publicly name companies under investigation after strong opposition. Critics say the move could harm London's financial reputation and scare off investors. Finance Minister Jeremy Hunt and others warn the plans could unfairly damage companies. The FCA is rethinking its approach, with the final policy expected in several months. Source 
• McDonald's Loses Big Mac Battle. McDonald's lost the right to use "Big Mac" for chicken products after failing to use it for five years, Europe's second top court ruled. The decision partially favored Irish rival Supermac's. The General Court: "McDonald's has not proved genuine use within a continuous period of five years." Supermac's, founded in Ireland in 1978, won this round, but McDonald's can still appeal to the Court of Justice of the European Union. Source
• Zara Brings Live Shopping West. Zara is expanding its live shopping broadcasts to the UK, Europe, and the US. Following success in China, the fashion brand aims to engage Western shoppers with shorter, interactive shows. A Zara spokesperson: "We think why not – from an entertainment perspective this is like an evolution." Despite uncertainties, Inditex, Zara's parent company, is leveraging its financial strength to experiment with this new selling format, highlighting its ability to innovate. Source 
• Supermarket Gamification Sparks Concerns. Four major UK supermarkets – Tesco, Sainsbury’s, Asda, and Morrisons – are offering loyalty points for hitting spending targets, sparking fears of overspending. Jo Rourke, a thrifty single mom, cautioned: "The terminology of 'challenges' could make it feel like a game... it could be quite dangerous." With food prices still high, the Competition and Markets Authority is investigating whether these loyalty schemes mislead shoppers. Source

Disclaimer: This blog offers insights into international business and global events for informational purposes only. It is not intended as investment or business advice. WeavePay is not liable for any decisions made based on the content provided.

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