Job Growth Slows; OatFi Series A; Circle IPO
Cole Gottlieb, AVP Corporate Strategy
U.S. private payroll growth slows. OatFi announces its Series A. Circle goes public. Chime sets a price range, targets an $11Bn valuation. Klarna and PayPal launch new cards.
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Job Growth Slows
Private payroll growth in May slowed to just 37,000, coming in well below the Dow Jones estimate of 110,000 and short of April’s 60,000. Job changers saw their pay increase on average by 7%, while those staying in the same role saw wages grow by 4.5% year over year, both consistent with wage gains in April. The Bureau of Labor Statistics jobs report is expected to show the unemployment rate holding steady at 4.2%. Following the release of the ADP report, President Trump called on Fed Chair Powell to cut rates, posting on his social media site that “Powell must now LOWER THE RATE.”
OatFi Announces $24Mn Series A
OatFi, a B2B payments and financing startup, announced it has raised $24Mn in new funding. The Series A round was led by White Star Capital, with participation from existing investors QED and Portage. OatFi solves a common pain point in B2B transactions: payment terms. OatFi leverages integrations with accounts payable and accounts receivable platforms and commercial charge card workflows to operate a “behind-the-scenes” credit underwriting process to allow sellers to get paid more promptly, while allowing buyers to pay on their preferred terms. OatFi cofounder and CEO Michael Barbosa explained, “B2B payments are not just a money movement challenge—they’re a data and workflow challenge. That’s why we’ve focused on deep API integrations that offer working capital solutions within the platforms that businesses already rely on to pay and get paid.”
Circle Goes Public
USDC stablecoin issuer Circle’s shares jumped +168% in its NYSE debut, after upsizing its IPO two times. Circle raised close to $1.1Bn, up from the $624Mn initially expected. The stablecoin issuer benefitted from progress on U.S. stablecoin regulation. Circle is now listed on the NYSE under the ticker “CRCL.”
Chime Sets Price, Targets $11Bn Valuation
The stars seem to be aligning for multiple IPOs to get out the door, with Chime alsosetting a price for its offering. The neobank announced it will target a price range of $24-$26 per share for its 32Mn share offering. At the high end of that range, Chime would beworth about $11Bn on a fully diluted basis, according to a Bloomberg analysis. Still, even if it hits that $11Bn number, it would be a sharp come down from the $25Bn valuation the company achieved in its 2021 funding round.
Klarna and PayPal Launch New Cards
Both Klarna and PayPal are reaching for growth with new physical payment cards. Klarna, best known for its pay-in-four buy now, pay later financing, is launching a new card offering in the U.S. that combines features of debit and credit. Users can preload funds onto the card, and choose to use it either as a standard debit card or choose a Klarna pay-in-four or longer-term financing option on a transaction-by-transaction basis. The new card leverages Visa’s “Flexible Credential” infrastructure that the network rolled out last year.
Meanwhile, PayPal launched a new physical credit card, aiming to take a bigger slice of in-store payments. The PayPal Credit Card, issued by Synchrony on the Mastercard network, will begin rolling out to U.S. consumers in the coming weeks, enabling cardholders to easily use PayPal-provided financing both online and in store. The new credit card offering will sit alongside PayPal’s existing cashback card. Of the news, PayPal global head of consumer financial services Scott Young said, “PayPal Credit is one of our most popular products, and customers have long been requesting the ability to use it on-the-go as they look for more choice and flexibility wherever they shop.”
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