The Oakland-based fintech start-up Marqeta has closed a $260 million in Series E funding to fuel its global expansion — and move further into consumer credit.
"There's credit in the U.S., and there's credit around the world," Jason Gardner, Marqeta's CEO, told Cheddar in an interview Monday. "We're seeing credit increase throughout Europe, and it's a new phenomenon within pretty much all of Asia. As we begin to grow and globalization begins to take hold further the ability to use credit is going to become more and more important."
Asia dominates the global payments revenue pool, according to an October report by McKinsey, but consumer and commercial credit cards drive just 6 percent and 2 percent of it respectively, compared to 35 percent and 11 percent in North America.
Ant Financial's Alipay, a customer of Marqeta, and Tencent-owned WeChat Pay handle 93 percent of all mobile transactions in China, which in 2017 totaled $15.4 trillion. Mobile payments in the U.S. are projected to reach $282 billion by 2021.
And in Europe, challenger banks (i.e., digital-first or digital-only bank startups) have gained traction over the past few years with Atom Bank, Tandem Bank, Monzo, Starling Bank, Revolut, and N26 raising $1 billion in funding collectively.
Marqeta may not be a household name, but it provides the platform behind companies that are, including Square and Affirm. (It issues Square Cash App users' debit cards and provides the virtual credit cards for Affirm users.)
"Modern card-issuing, the core of our business, has taken off like a rocket," Gardner said. "It's undeniable that people are using less cash. The ability to leverage merchants online and offline, especially ones that are taking cards, is a great opportunity for us, and this new money will allow us to position ourselves to take advantage of it."
The global market for card-issuing volume is more than $45 trillion, according to research by Edgar, Dunn & Company.
Marqeta also has a "just-in-time funding" business that allows contracts of on-demand companies like DoorDash or Instacart to pay for the things they buy on behalf of users instead of carrying prepaid cards; Marqeta funds the exact amount of the transaction at the exact time the card is swiped.
Travel, in addition to e-commerce and virtual cards, is a priority market for Marqeta in the U.S. and globally, Gardner said.
Gardner added that Marqeta's competitors — legacy financial firms like First Data, TSYS, and Fiserv — mostly sell to banks, which are ultimately after the same customers as Marqeta. Marqeta, however, has always positioned its platform as a developer-friendly product designed for on-demand service companies and alternative lenders. As more digital-first businesses are born and existing businesses become more digital and more global, Marqeta could challenge the world's two largest payments giants.
"Visa and Mastercard are really the only networks that have interconnected every single merchant on the globe that takes cards online or offline," Gardner said.
Coatue Management led the recent fundraise, first reported by TechCrunch. Spark Capital, Lone Pine, Geodesic, and Vitruvian also participated, as well as existing investors Visa, ICONIQ, Goldman Sachs, 83North, Granite Ventures, CommerzVentures, and CreditEase.
The raise brings Marqeta's valuation to nearly $2 billion. Marqeta had raised $45 million in June 2018 at a $545 million valuation.
A big-screen adaptation of the anime “Chainsaw Man” has topped the North American box office, beating a Springsteen biopic and “Black Phone 2.” The movie earned $17.25 million in the U.S. and Canada this weekend. “Black Phone 2” fell to second place with $13 million. Two new releases, the rom-com “Regretting You” and “Springsteen — Deliver Me From Nowhere,” earned $12.85 million and $9.1 million, respectively. “Chainsaw Man – The Movie: Reze Arc” is based on the manga series about a demon hunter. It's another win for Sony-owned Crunchyroll, which also released a “Demon Slayer” film last month that debuted to a record $70 million.
The Federal Aviation Administration says flights departing for Los Angeles International Airport were halted briefly due to a staffing shortage at a Southern California air traffic facility. The FAA issued a temporary ground stop at one of the world’s busiest airports on Sunday morning soon after U.S. Transportation Secretary Sean Duffy predicted that travelers would see more flights delayed as the nation’s air traffic controllers work without pay during the federal government shutdown. The hold on planes taking off for LAX lasted an hour and 45 minutes and didn't appear to cause continued problems. The FAA said staffing shortages also delayed planes headed to Washington, Chicago and Newark, New Jersey on Sunday.
Boeing workers at three Midwest plants where military aircraft and weapons are developed have voted to reject the company’s latest contract offer and to continue a strike that started almost three months ago. The strike by about 3,200 machinists at the plants in the Missouri cities of St. Louis and St. Charles, and in Mascoutah, Illinois, is smaller in scale than a walkout last year by 33,000 Boeing workers who assemble commercial jetliners. The president of the International Association of Machinists says Sunday's outcome shows Boeing hasn't adequately addressed wages and retirement benefits. Boeing says Sunday's vote was close with 51% of union members opposing the revised offer.
The stunning indictment that led to the arrest of more than 30 people — including Miami Heat guard Terry Rozier and other NBA figures — has drawn new scrutiny of the booming business of sports betting in the U.S. The multibillion-dollar industry has made it easy for sports fans — and even some players — to wager on everything from the outcome of games to that of a single play with just a few taps of a cellphone. But regulating the rapidly-growing industry has proven to be a challenge. Professional sports leagues’ own role in promoting gambling has also raised eyebrows.
Tesla, the car company run by Elon Musk, reported Wednesday that it sold more vehicles in the past three months after boycotts hit hard earlier this year, but profits still fell sharply. Third-quarter earnings fell to $1.4 billion, from $2.2 billion a year earlier. Excluding charges, per share profit of 50 cents came in below analysts' estimate. Tesla shares fell 3.5% in after-hours trading. Musk said the company's robotaxi service, which is available in Austin, Texas, and San Francisco, will roll out to as many as 10 other metro areas by the end of the year.
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