July 3, 2020

092: Money Talks #18: Wirecard & BaaS | Circit as a Panacea | Diffuse | Overseas Startup Investors

In this week's Money Talks segment, Pete Townsend and Eoin Fitzgerald look ahead to the impact of Wirecard on Banking-as-a-Service, how the Irish tech startup Circit could have prevented the Wirecard audit mess, and Diffuse's take on startups looking over

Show Notes
Guest Profile

This episode of MoneyNeverSleeps is kindly sponsored by Ireland’s fintech and financial services recruitment specialists, Top Tier Recruitment. If you would like an intro to the team at Top Tier Recruitment, please click here.

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In this episode, Eoin and Pete dig into pieces of content from this week that are relevant to the cosmic cloud of startups, tech, venture deals and enterprise in which they live.

The main stories stories covered in this week's episode include:

BaaS Works, it's the Regulations That Don't (Chris Skinner's blog, 30th June)

We take a look at regulation at the process level rather than the entity level, i.e. Stripe enable the merchant checkout process, so regulate that instead of Stripe’s whole business. It’s complicated to implement, but we’re seeing see snippets of it already on the crypto side.
On the Wirecard mess specifically, our favourite quote was in the FT on June 30th (paywall) from Sharon Bowles, former chair of the European Parliament’s economic and monetary affairs committee. “If you are going to audit a brewery, you don’t just count the barrels of beer. You should wiggle them to see if they are full.”
A special segment from David Heath, founder and CEO of Irish tech startup Circit, on how Circit could have prevented the Wirecard audit mess where Wirecard's purported cash balances were not being properly confirmed by auditors.

The Problem with Raising Money Overseas (Diffuse blog, 1st July)

“A lot of the funds we got introduced to in the U.S., they quickly closed the conversation when they realized we weren’t U.S.-based,” says Ollie Walsh, CEO of a European B2B company.
“Greylock, Accel, Index and Sequoia all did their first early stage Irish investments in the last 12 months. You can take that as a once-off, or you can take that as ‘they’ve looked here once, and that means they’re going to start looking here again’.” Finn Murphy, Frontline Ventures, on ep 85 of MoneyNeverSleeps
If they do get funded by a US VC, how do we keep Irish startups from re-locating to the US when their investors have such a compelling case? There's a bigger talent pool of those experienced in Series A to Series C level growth, a friendlier tax regime for founders and employees, and a bigger customer market in your new backyard. Scale Ireland are trying to do something about this at the systematic level, but what about the talent pool of "VP Growth" types that can take a company from $1mn in annual revenue to $100mn or $1bn?

Japan's SBI to Launch Crypto Fund with 50% in XRP (iHodl, 26th June)

Pete was just waiting for Colin Platt to jump all over this - he was so surprisingly mild-mannered when Pete put it his way on Twitter, “It’s Softbank International, they’re long time bag holders, probably a way to shift it off their balance sheet because the liquidity has dried up.”
If Colin's right, it’s another heartwarming example of SBI’s rock-solid sense of fiduciary responsibility (as an ode to Colin's signature sarcasm).
Colin was on ep 79 of MoneyNeverSleeps, and see his recent blog post on Plexus - he makes complex topics very accessible by the way - on crypto coming out of quarantine.

Other stories we also touched on this week include:

Unilever and Verizon are the latest companies to pull their advertising from Facebook (TechCrunch, 26th June)
Deutsche Bank Taps Symphony & WhatsApp for Messaging Platforms (MarketsMedia, 25th June)
‘Flying Blind Into a Credit Storm’: Widespread Deferrals Mean Banks Can’t Tell Who’s Creditworthy (WSJ (paywall) 29th June)

Books we're reading this week:

On Pete's Kindle this week is My Trip to the Startup World: the Voice of Fintech by Rudi Falat who was on episode 74
Eoin is reading only news and blogs this week as he's been drafting the MoneyNeverSleeps newsletter!

Please visit https://www.moneyneversleeps.ie/ for all of our other episodes. Also, follow us on Twitter @MNSShow, @PeteTownsendNV and @EoinFitzgerald9 for updates and more information.