Inflation Ticks Up; Klarna’s IPO Pop; Pipe and Uber Team Up

Inflation ticked up to 2.9%. Employment numbers revised downward. Lisa Cook stays at the Fed, for now. Rainforest raises a Series B. Klarna IPOs. Mazlo emerges from stealth. OnePay gets into mobile phone service game. Pipe and Uber team up.

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Inflation Ticks Up, Complicated Fed’s Job

Inflation ticked up in August, with prices rising 2.9% year over year. That makes for the fastest pace of price increases since the start of the year. Inflation has wiped out nominal gains in income for most households apart from the country’s richest, data released by the Census Bureau last week shows. Overall, the Census Bureau estimates that inflation-adjusted household income rose just 1.3% last year, but, with a 1.4% margin of error, it’s possible some households saw real income decline. Meanwhile, revised jobs figures from the Bureau of Labor Statistics shows that job growth last year wasn’t as robust as previously thought. The data, for the period through March, are likely to be revised downward by 911,000 jobs, per the government’s preliminary benchmark revision. Prior to the revision, government data indicated employers added nearly 1.8MM jobs in the year through March. Rebounding inflation and the soft jobs numbers put the Fed in the unenviable position of attempting to navigate a slowing economy that is still experiencing elevated inflation. There is a small silver lining this week at least: credit card charge-offs in Q2 fell about half a point to 4.15%, according to new analysis from S&P Global. Credit card delinquency rates also fell 18bps year over year to 2.98%. The American consumer is holding on, for now anyway.

Judge Blocks Trump’s Attempt to Fire Fed Gov, For Now

Last week, a federal judge blocked President Trump’s attempt to fire Federal Reserve Governor Lisa Cook. Trump is seeking to fire Cook for “cause,” stemming from allegations she claimed two different homes as her “primary” residence, enabling her to obtain favorable loan terms. The judge granted Cook’s request for a temporary court order that will keep her in role, which includes voting on rate decisions, while the case is heard. The next FOMC rate setting meeting will be held September 16-17. The judge found that Cook is “substantially likely” to prevail in her case, with the judge writing in part, “Removal was not meant to be based on the President’s assumptions about the official’s future performance as extrapolated from unproven conduct dating from before they assumed the office.”

Rainforest Raises $29MM Series B

Rainforest, a payment processing platform that’s challenging incumbents that include the likes of Stripe, announced it has raised a $29MM Series B. The round was co-led by Infinity Ventures and Matrix Partners, with participation from Accel and Tech Square Ventures. Rainforest, which describes itself as “payments-as-a-service,” aims squarely at helping vertical SaaS firms handle payment processing for their merchant customers. The company says its offering is differentiated vs. giants in the space, like Stripe and Adyen, as it was “purpose-built” for vertical SaaS companies. Rainforest founder and CEO Joshua Silver told Crunchbase News, “Payment providers who divide their attention between platforms and merchants can never truly prioritize platform-specific needs like residual reporting and merchant management.”

Klarna IPOs

Klarna has successfully debuted on the public markets. The company raised about $1.37Bn in its initial public offering. Shares priced at $40, above Klarna’s target range of $35 to $37. The $40 price point values Klarna at some $15Bn, which is a healthy rebound from the $6.7Bn it raised at in 2022, but still substantially below the more than $45Bn valuation it notched in a Softbank-led round in 2021. Shares opened for trading on the New York Stock Exchange at $52 per share, a healthy first day IPO “pop,” though the stock gave up some of those gains and is trading around $44 as of the time of writing. Commenting on the IPO, Klarna cofounder and CEO Sebastian Siemiatkowski told CNBC, “To me, it really just is a milestone”. Siemiatkowski holds an approximately 7.5% stake in the company, making him worth in excess of $1Bn.

Mazlo Emerges from Stealth

Mazlo, a fintech designed to help non-profits manage their finances, has emerged from stealth and announced it has raised $4.6MM. Investors include Andreessen Horowitz, Westbound Equity Partners, Super{Set}, and the Social Good Fund. Mazlo’s goal is to offer a comprehensive finance platform designed for the unique needs of non-profits. Mazlo cofounder Kian Alavi said, “There were companies out there handling bits and pieces, like basic spending accounts and the ability to accept payments for sorority fundraising,” but Mazlo wanted to offer a comprehensive, compliant platform, “one that had all of the banking and finance tools a nonprofit organization would need.”

OnePay Gets into Mobile Service Game

Walmart-backed neobank OnePay is getting into the mobile phone game. OnePay has tapped telecom-as-a-service provider Gigs to power its own mobile phone plan. A plan from OnePay that costs $35 per month will include unlimited 5G data, talk, and text via AT&T’s network, per reporting from CNBC last week. OnePay is hardly the only upstart banking service to offer mobile plans. Germany-based N26, U.K.-based Revolut, and Sweden-based Klarna all currently offer or plan to offer mobile phone plans in some of their markets.

Pipe and Uber Team Up

Embedded SMB lender Pipe announced it has inked a deal with Uber to empower restaurants on Uber Eats to access working capital via Pipe. Eligible restaurants will be able to tap funds through Uber Eats Manager to manage and grow their businesses. Financing offers will be tailored based on the firm’s revenue, cash flow, and business performance. Of the partnership, Pipe CEO Luke Voiles said, “Uber Eats is an integral part of how its restaurant partners operate, making access to working capital a natural next step. Working with Uber, Pipe is able to move fast to understand the needs of these restaurants and deliver capital where traditional banks have failed. Together, we’re unlocking growth for restaurants by finally putting long-overdue capital within reach.”