Inflation Eases; Capitalize & Setpoint Announce Funding; Apple Opens Up NFC

Inflation eased. A September rate cut may be on the table. Capitalize and Setpoint announce their Series B rounds. Green Dot extends Apple deal. Tally shuts down. Techstars lays off 17%. Apple opens up NFC access.

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A Rates Cut Comes into View as Inflation Eases

Inflation eased for the fourth month in a row, increasing the likelihood that the Fed cuts rates at its next meeting. Core CPI, which excludes volatile food and energy prices, came in at 3.2% in July vs. the year prior. Overall CPI was up 2.9% year over year, which came in lower than expected. Rent prices were an outlier, accounting for 90% of the month-over-month increase. The Producer Price Index also increased by less than forecast, with the measure up 2.2% vs. last year. Still, not everyone is convinced that inflation has been beat. Fed Governor Bowman still sees upside risks, pointing to U.S. fiscal policy, housing pressure, and geopolitical uncertainty. Bowman continues to urge caution on cutting rates too early.

Capitalize Raises $19Mn Series B

Capitalize, which simplifies rolling over old 401(k)s, announced it has raised a $19Mn Series B. The round was led by RRE Ventures, with participation from Canapi Ventures, Bling Capital, and Industry Ventures. The company was originally founded as a direct-to-consumer product, acquiring customers and helping them to find and move old 401(k) plans into IRAs. Capitalize would earn a referral fee from brokerages customers moved funds to. But in 2022, Capitalize launched a B2B product, allowing brokerages like Betterment or Schwab to offer its capabilities inside of their platforms. The segment now accounts for more than 50% of Capitalize’s business. Capitalize is paid a per-rollover fee by the brokerages that deploy its enterprise product. The company is looking to develop ways to more quickly move funds as part of the notoriously manual rollover process.

Setpoint Announces $31Mn Funding Round

Setpoint, which describes itself as a “operating system” for capital markets, announced it has raised $31Mn Series B. The round was led by 645 Ventures, with participation from Andreesen Horowitz, Citi, Floating Point, Wells Fargo, and others. The latest round brings Setpoint’s total capital raised to date to $76Mn. Setpoint’s platform helps automate debt facility management, which, the company says, reduces costs and increases speed for borrowers and lenders. Setpoint plans to use the fresh funding to continue developing its product, including by expanding its data science and engineering teams. The company also plans to leverage LLM models to improve its data verification and asset valuation processes.

Green Dot Renews BaaS Deal with Apple

Green Dot announced it has renewed its banking-as-a-service partnership with Apple. Green Dot powers Apple’s “Apple Cash” offering, which can hold Goldman-issued Apple Card users’ cashback and offer peer-to-peer payments via Apple’s iMessage, though few use that feature. According to Green Dot, it has signed a multi-year extension with Apple with “improved” financial terms. The good news comes on the heels of Green Dot’s recent enforcement action and $44Mn settlement with its primary federal regulator, the Federal Reserve.

Green Dot has leaned into its BaaS business line and also works with Amazon Flex, Dayforce, and Quickbooks. The business unit has seen revenue grow nearly 40% year over year to just over $250Mn. Total partnership revenue now accounts for 44% of the bank’s topline. While BaaS revenue is growing, Green Dot’s retail business has sagged, with revenue declining about 25% year over year to $96.7Mn. Historically, Green Dot has been heavily dependent on a key partner, Walmart, for distribution in its retail segment. While the retailer still offers its Green Dot-powered Moneycard, Walmart has been more aggressively pushing services from its majority-owned neobank, One, presumably to Green Dot’s detriment.

Tally Shuts Down

Tally, which raised a total of $172Mn, is shutting down. The company spent much of its life offering automated tools and lines of credit to help users consolidate and pay down credit card debt. This April, the company announced it would cease its consumer-focused offering and instead pivot to B2B, intending to sell its debt management services to other firms. But the effort hasn’t panned out, with Tally CEO Jason Brown saying the company had made the “sad and difficult” decision to shut down, after exploring all other options.

Techstars Lays Off 17% of Staff

Startup accelerator Techstars, a prolific seed stage investor, is laying off 17% of its global workforce. Techstars cofounder and CEO David Cohen said in a note that the company had over hired, staffing up to support “thousands” of new investments each year, while, in reality, it is only doing around 700 currently. Sales, partnerships, engineering, and portfolio services teams will bear the brunt of the cuts, Cohen said. The reductions will also mean the end of the Techstars powered by JPMorgan partnership later this year, once all allocated funds have been invested.

Apple to Open up NFC Access

In a move widely interpreted as an effort to head off antitrust scrutiny, Apple is opening upaccess to the near-field communications capability on its device – sort of. The change will come with the release of iOS 18.1 later this year, which will enable users to designate what wallet or payment is surfaced when users double-click their phone’s side or home button. Historically, Apple has restricted access to its devices’ NFC capabilities, claiming it is necessary for security reasons. The change will allow app developers to add a variety of contactless capabilities, including use cases like student IDs, hotel keys, merchant loyalty and rewards cards, transit cards, and so forth. Apple says that government IDs will be supported “in the future.” But there are strings attached: specifically, that, like with its App Store, Apple intends to charge third parties for using the capability.