Visa makes another big bet on fintech in the last month

International payment system Visa will bur British payments start-up Currencycloud, in its second major fintech acquisition of 2021, CNBC reports.

The deal values Currencycloud at £700 million ($962 million), Visa said. The payments giant led an $80 million investment in Currencycloud at the beginning of 2020. As a result, the sum it’s paying for Currencycloud would be reduced by the outstanding equity it already owns.
Founded in 2007, London-headquartered Currencycloud sells software for banks and fintech firms to process cross-border payments.

“Consumers and businesses increasingly expect transparency, speed and simplicity when making or receiving international payments. With our acquisition of Currencycloud, we can support our clients and partners to further reduce the pain points of cross-border payments and develop great user experiences for their customers,” said Colleen Ostrowski, Visa’s global treasurer. recalls that a month ago Visa announced about buying Swedish fintech startup Tink for $ 2.1 billion. The report said that Visa hopes to accelerate adaptation of open banking in Europe through the merger of its own developments with Tink tools.

It should be noted that Visa’s $5.3 billion deal was canceled earlier this year. In particular, in January 2020, Visa was going to buy the U.S.-based fintech service aggregator Plaid. However, due to an anti-trust claim of the U.S. Department of Justice the deal fell through. The Justice Department sued to block the deal last November, alleging the acquisition would allow Visa to unlawfully maintain a monopoly in the online debit-card market.

AraratBank launches a trading platform with innovative solutions has talked to Anahit Shakaryan, Head of Investment Banking Department of AraratBank.

I can definitely state that, especially in recent times, the financial institutions in Armenia have been paying more attention to the global financial market integration, which is absolutely due to the high demand among customers. On the other hand, the field is path-breaking for the RA banking and financial sector, and in many cases, the participants of the sector may face industry-specific problems which require additional efforts to be solved.

From the perspective of effective investment management, this topic is relevant and vitally important both for individuals and legal entities.
One thing is for sure: the trend we have today will affect positively the customers of the bank as their financial literacy improves in line with the process of intensive integration with the system. These are the important factors that are fundamental to the development of the sector.

As regards the challenges, they are largely interrelated with the macroeconomic stability and foreign policy in the country, since this involves international relations. Financial institutions, especially the ones operating in the foreign market, should be careful in choosing partners, given not only the stability of the partner but also the activities often determined by political and credit risks. In the financial sector, the lack of qualified managers in the team is obvious and very often represents an obstacle.

It is well known that the global financial markets have always captured investors by the variety of financial instruments and high liquidity. In addition to the financial instruments available in the local market, are our citizens provided with an access to the broad financial toolkit offered by the international market today and if so, how?

Today we can say that the Republic of Armenia is home to the licensed companies which provide access to the services and a wide range of financial instruments available in the global financial market.
It is noteworthy that AraratBank has recently signed a new cooperation agreement, expanding the range of services provided in the global financial market and therefore providing access to around 5,000 top-performing financial assets: securities of over 12 countries, including shares listed on the most reputable stock exchanges in the United States and Europe, a number of commodities, currency pairs, stock indices and other financial instruments.

All AraratBank customers, who are ready to invest in the global financial market within acceptable risk exposure, may take full advantage of the instruments above through the AraratBank TRADING PLATFORM, which is a safe and user-friendly trading platform with innovative solutions. It is available on Desktop and Web browsers as well as iOS and Android operating systems. As a matter of fact, our skilled employees are ready to support both beginner and professional customers in managing their funds efficiently.

Would you please highlight the advantages that make you stand out from other companies providing similar services in the market?

Trust is, perhaps, the first and foremost circumstance, which I consider necessary to emphasize. The Central Bank of Armenia exercises control over the commercial banks operating in Armenia, including Araratbank. It should be noted that the regulatory body in our country – the Central Bank of the Republic of Armenia – is guided by stringent control and regulation policies, which is an important indicator to have trust in banks.

At that, the availability of banking services, professional team, multilingual customer service, competitive rates, and working across time zones are the important benefits for AraratBank customers. Moreover, each customer will have a personal manager to assist in managing invested funds skilfully and correctly.

It is worth mentioning that improving financial literacy of the population is a key precondition for the sustainable and efficient development of the field. Moreover, the more comprehensible and simpler the information is, the more efficient and profitable the transaction of the customer will be. Our team provides information using understandable terms and simple language.

In your opinion, how much money on average does a beginning investor needs to start investing?  

This is one of the most frequently asked questions, the answer to which is rather ambiguous. Beginning investors must first of all be sufficiently informed about the financial markets, have a clear knowledge of the risk/reward ratio, and only then start investing. An investor can even manage an investment of 500 U.S. dollars efficiently, if he or she possesses the required knowledge. Our team plays a major role in the vital processes of guiding customers properly, executing transactions accurately, and identifying the right solution for a problem.

Given my professional background of over two decades in foreign and local financial markets, I assure that you can consider an average of 10,000 to 20,000 U.S. dollars for the efficient management of a diversified portfolio. As I noted before, a number of factors, including but not limited to investors’ ideas and considerations, readiness to take a risk, should be considered before making any investment.

In this context, I would like to underline that the large volume of assets managed in the financial market can be easily diversified, reducing the impact of market risks on the investment portfolio.

The Internet is brimming with a variety of appealing offers. What should investors be wary of? Are all brokerage firms trustworthy?   

The Internet is indeed flooded with numerous appealing offers. However, the so-called “unscrupulous brokers”, which are not licensed by the Central Bank of the Republic of Armenia, are active in the virtual reality.  Brokers like these, as a rule, come up as legal entities registered in reputable companies in Europe, controlled by European or Australian regulators. As a result, services are provided to citizens through a company registered in an offshore country, which is definitely not regulated.

Insecure storage of funds, low liquidity of assets, and open position frauds are the main risks our citizens often face.

Based on the experience of countries with enhanced financial systems, it can be stated that improving the financial literacy of population is the most efficient way to combat financial fraud. It is noteworthy that, in addition to providing investment services, our bank is committed to improving the financial literacy of population.

Today, a number of large international companies provide services based on CFD contracts, which enable customers to increase the liquidity of investments paying low commission fees. Transactions in AraratBank TRADING PLATFORM are also concluded based on СFD contracts, which will in the end enable our citizens to execute transactions with a safety cushion at hand.

I find it important to emphasize that citizens should place trust only in the financial market participants, which are licensed by the Central Bank of the Republic of Armenia. However, if they prefer the services provided by foreign companies, it is necessary to analyze the financial situation of the company, the field of regulation, and the documents to be signed very carefully.

How Tech Won the Pandemic and Now May Never Lose

As the world reeled, Silicon Valley supplied the tools that made life and work possible. Now tech companies are awash in money — and questions about what it means to win amid so much loss.

SAN FRANCISCO — In April 2020, with 2,000 Americans dying every day of Covid-19, Jeff Bezos, Amazon’s chief executive and the world’s richest man, announced he was focusing on people rather than profits. Amazon would spend about $4 billion in the next few months “providing for customers and protecting employees,” he said, wiping out the profit the retailer would have made without the virus.

It was a typically bold Amazon announcement, a shrewd public relations move to sacrifice financial gain at a moment of misery and fear. Mr. Bezos said this was “the hardest time we’ve ever faced” and suggested the new approach would extend indefinitely. “If you’re a shareowner in Amazon,” he advised, “you may want to take a seat.”

At the end of July 2020, Amazon announced quarterly results. Rather than earning zero, as Mr. Bezos had predicted, it notched an operating profit of $5.8 billion — a record for the company.

The months since have established new records. Amazon’s margins, which measure the profit on every dollar of sales, are the highest in the history of the company, which is based in Seattle.

After stepping aside as chief executive early this month, Mr. Bezos flew to suborbital space for 10 minutes this week. Upon returning, he expressed gratitude to those who had fulfilled this lifelong dream. “I want to thank every Amazon employee and every Amazon customer, ’cause you guys paid for all this,” he said.

Mr. Bezos, who was not available for comment for this article, was the only chief executive of a tech company to enter zero gravity in his own spaceship in the past year. But Amazon’s pandemic triumph was echoed all over the world of technology companies.

Even as 609,000 Americans have died and the Delta variant surges, as corporate bankruptcies hit a peak for the decade, as restaurants, airlines, gyms, conferences, museums, department stores, hotels, movie theaters and amusement parks shut down and as millions of workers found themselves unemployed, the tech industry flourished.

The combined stock market valuation of Apple, Alphabet, Nvidia, Tesla, Microsoft, Amazon and Facebook increased by about 70 percent to more than $10 trillion. That is roughly the size of the entire U.S. stock market in 2002. Apple alone has enough cash in its coffers to give $600 to every person in the United States. And in the next week, the big tech companies are expected to report earnings that will eclipse all previous windfalls.

Silicon Valley, still the world headquarters for tech start-ups, has never seen so much loot. More Valley companies went public in 2020 than in 2019, and they raised twice as much money when they did. Forbes calculates there are now 365 billionaires whose fortunes derive from tech, up from 241 before the virus.

As Cyberattacks Surge, Security Start-Ups Reap the Rewards

SAN FRANCISCO — As cyberattacks proliferated this year, Sanjay Beri, the chief executive of Netskope, a cloud security start-up, got a phone call. Then an email. Then more messages.

All were from venture capitalists who wanted to invest in his company. Given the ransomware attacks and nation-state hacks that were making headlines, they told him, companies that made security products had a bigger market and mission than before.

“We weren’t looking for capital,” said Mr. Beri, who founded Netskope in 2012, but the cyberattacks “definitely increased their interest.”

After bids from seven investors, Netskope raised $300 million this month at a valuation of $7.5 billion, up from a $2.8 billion valuation last year. It was one of the year’s largest cybersecurity funding rounds, but not the maximum that Netskope could have attained.

“We could have raised $1 billion in capital,” Mr. Beri said.

Recent cyberattacks around the world have taken down operations at gasoline pipelineshospitals and grocery chains and potentially compromised some intelligence agencies. But they have been a bonanza for one group: cybersecurity start-ups.

Investors have poured more than $12.2 billion into start-ups that sell products and services such as cloud security, identify verification and privacy protection so far this year. That exceeds the $10.4 billion that cybersecurity companies raised in all of 2020 and is more than double the $4.8 billion raised in 2016, according to the research firm PitchBook, which tracks funding. Since 2019, the rise in cybersecurity funding has outpaced the increase in overall venture funding.

The surge follows a slew of high-profile ransomware attacks, including against Colonial Pipeline, the software maker Kaseya and the meat processor JBS. When President Biden met with President Vladimir V. Putin of Russia last month, cyberattacks perpetrated by Russians were high on the diplomatic agenda. This month, the Biden administration and its allies also formally accused China of conducting hacks.

The breaches have fueled concerns among companies and governments, leading to increased spending on security products. Worldwide spending on information security and related services is expected to reach $150 billion this year, up 12 percent from a year ago, according to the research company Gartner.

“Before we got to this point, we as security teams were having to go and fight for every penny we could get, and now it’s the exact opposite,” said John Turner, an information security manager at LendingTree, the online lending marketplace. Executives, he said, are asking: “Are we protected? What do you need?”

All of this is set to drive business for cybersecurity companies, creating a potential windfall that has excited investors. The average valuation of cybersecurity companies raising funds this year has more than doubled to $524.1 million from $221.8 million in 2020, according to PitchBook.

“In close to two decades as a V.C., I’ve never seen valuations so escalated,” said Asheem Chandna, a venture capitalist at Greylock Partners, who has invested in security companies such as Palo Alto Networks.

The money is flooding into start-ups that are tackling hackers in new ways. Traditionally, security systems at companies relied on the idea of securing a perimeter. That meant companies installed firewalls and other software to protect access to their corporate network.

But over the past several years, a shift to cloud computing has rendered the perimeter and the reliance on corporate networks obsolete. Employees now get access to applications over the internet, rather than through a data center operated by their employer. That has opened the door to start-ups that focus on cloud-based security and identity verification.

“Don’t build higher fences — have really good ID cards,” said Jason Crabtree, chief executive of Qomplx, a risk analytics start-up that provides identity verification software and is in the process of going public.

The funding frenzy has built for months. The pandemic provided momentum when companies shifted to remote work, which required securing those remote access systems, investors and executives said.

On a Friday evening in October, Mr. Chandna, the Greylock venture capitalist, introduced the chief executive of an email security company he had invested in, Abnormal Security, to another investor, he said. That investor, Venky Ganesan of Menlo Ventures, who had been pursuing a meeting with the chief executive, Evan Reiser, for months, immediately emailed Mr. Reiser to invite him to dinner that night.

Mr. Reiser drove, he said, from San Francisco to Mr. Ganesan’s home in Atherton, Calif., about 30 miles away. By the end of the weekend, Abnormal had signed a deal to raise $50 million at a $600 million valuation, putting its total funding at $74 million. Menlo’s $40 million check was the firm’s largest investment ever.

“As shotgun weddings go, it’s as shotgun as you can get,” Mr. Ganesan said.

Since then, the ransomware attacks have given the funding wave a further boost.

In January, Lacework, a cloud security start-up in San Jose, Calif., garnered $525 million in funding. Investors reached out because of Lacework’s products, which use artificial intelligence to identify threats, said Andy Byron, the company’s chief resource officer. In total, Lacework has raised $625 million since it was founded in 2015.

Mike Speiser, a venture capitalist at Sutter Hill Ventures, which led Lacework’s January financing, had no problem getting other investors to participate, he said.

“I called the five people that I thought were the best investors and asked them if they were interested. They were all interested, and within 48 hours we had a deal,” Mr. Speiser said. “One hundred percent of the people I called said they wanted in. We could have raised well over $1 billion.”

Business has boomed for Lacework because of “the combination of all of these ransomware and nation-state attacks, together with people moving to the cloud so aggressively,” said David Hatfield, who joined the start-up in February as chief executive.

Other security start-ups have also benefited. Orca, a cloud security start-up, raised $210 million in March. Trulioo, a company that makes sure users are who they say they are when they join a platform, collected $394 million last month.

Security start-ups are also being acquired for large sums or are going public. Last month, SentinelOne went public with a market capitalization of over $10 billion, the highest-valued cybersecurity public offering. In May, Auth0, an identity verification company, was bought by Okta, another security company, for $6.5 billion.

Mr. Beri of Netskope said that with cybersecurity threats mounting, the funding boom was likely to continue.

“Many investors are not security savvy,” he said. “But when your next-door neighbors go, ‘Hey, what’s up with this ransomware stuff,’ then you know that it’s reached public consciousness. From an investor’s perspective, when something hits the average person’s mind, they realize: ‘Wow. This is here to stay.’”

13% of Americans traded crypto in the past year, survey finds

More than 1 in 10 Americans invested in cryptocurrency over the past year, according to a survey published by the University of Chicago, a sign of the popularity of digital currencies like bitcoin and ethereum.

Specifically, 13% bought or traded crypto in the past 12 months — by comparison, 24% of Americans invested in stocks over the same time period, according to the survey.

Investors were likely spurred by a run-up in crypto prices earlier this year. Indeed, most crypto investors (61%) bought in over the past six months, according to NORC, a research group at the university that published the survey.

Bitcoin hit a high of around $63,000 in mid-April, a 116% jump from about $29,000 at the beginning of 2021.

Coinbase, the largest digital currency exchange in the U.S., went public in mid-April. And celebrities like Tesla and SpaceX chief executive Elon Musk have also expressed enthusiasm for crypto investments. In May, Tesla said it would accept bitcoin as payment for vehicle purchases. (Musk has since suspended those plans due to environmental concerns relative to bitcoin mining.)

Yet digital currencies can also fluctuate wildly in value.

As of Friday morning, bitcoin had fallen to around $32,000 — about half its April highs, but still a roughly 10% gain for the year.

That volatility has led some financial experts to call crypto a speculative asset. Financial advisors generally recommend crypto investors only allocate a small portion of their portfolio to it.

“Potential investors are leery of investing their retirement savings into what has been, to date, a fairly volatile investment,” said Mark Lush, who manages the Behavioral and Economic Analysis and Decision-Making team at NORC.

“Cryptocurrencies may have staying power as an investment option, but our hunch is that they will continue to lag behind more traditional investment opportunities for the foreseeable future,” he said.

Just 11% of those not investing in cryptocurrency said they were extremely or somewhat likely to begin trading in the next 12 months, the survey found.

Crypto investors tended to be younger, and more diverse in terms of gender and race and ethnicity, relative to retail stock investors, according to the survey.

The average crypto investor is 38 years old, whereas stock investors are 47.

Forty-one percent of women, 44% of investors of color and 35% of those with income below $60,000 a year traded cryptocurrency in the past year — higher respective shares than the 38%, 35% and 27% who traded stock.

However, investors with college degrees tended to favor stock — 51% traded stock in the past year versus 45% for crypto.

The University of Chicago survey polled a nationally representative sample of 1,004 American adults from June 24 to 28.

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