Private Payrolls Disappoint; NuBank Gets OCC Nod; Neo Financial Raises $68.5Mn

ADP payroll numbers disappoint. Manufacturing activity increases. NuBank gets conditional charter approval. Neo Financial raises $68.5Mn. PayPal shares plunge on CEO ouster, earnings miss. Checkout.com acquires European EMI. Crypto.com launches prediction markets.

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Jan Payroll Disappoints

January’s payroll numbers disappointed. The latest ADP private payroll data showed an increase of just 22,000, far below analyst estimates. The January numbers follow a downward revision to December’s stats, contributing to a growing sense of a slowing job market that many are continuing to describe as “low hire, low fire.” In better news, manufacturing activity grew at its fastest rate since 2022, according to a new report. The latest ISM index rose to 52.6 from 47.9, indicating growing activity in the sector. New orders also jumped in the January data. However, the data also show that manufacturers are facing higher input costs, with the prices-paid index increasing to its highest level in four months.

NuBank Gets OCC Charter Nod

Brazil-based NuBank has secured conditional approval from the OCC of its U.S. bank charter application. The OCC conditionally approved the charter just 121 after its submission, suggesting the regulator is willing to move more quickly on applications than under prior administrations. The company, which already serves 127Mn users in LatAm, now has 12 months to raise the necessary equity capital for the bank and 18 months to operationalize it. NuBank cofounder Cristina Junqueira, now based in the U.S., will lead the effort to stand up the new entity and U.S. operations. Junquiera commented on the conditional approval, saying, “Receiving federal approval for a national bank charter is a significant step in our journey to becoming a solid, compliant, and competitive regulated institution in the U.S.,” and David Velez, CEO of Nu Holdings, added, “This approval isn’t just an expansion of our operation; it’s an opportunity to prove our thesis that a digital-first, customer-centric model is the future of financial services globally.”

Neo Financial Raises $68.5Mn

Canadian fintech Neo Financial announced it has raised a fresh $68.5Mn in equity. The new funding will be used to help develop a securitization program for loans tied to the company’s credit and lending products, which, Neo says, is a “first of its kind” for a Canadian fintech. The equity investment was led by a syndicate of more than 100 Canadian investors, according to the company’s news release, including Alberta Investment Management Corporation, Caldwell Growth Opportunities Fund, Sandstone Asset Management, Northleaf Capital Partners, and Plaza Ventures. Neo Financial offers checking and savings accounts, an array of credit cards, mortgages, and investment services.

PayPal Shares Plunge Following CEO Ouster, Earnings Miss

PayPal shares plunged last week, as the company announced the ouster of CEO Alex Chriss and an earnings miss. The company’s stock was down nearly 20% in intraday trading on the news. Chriss replaced Dan Schulman in 2023. Schulman had held the CEO role since 2014. It was hoped that Chriss could engineer a turnaround for the online payments stalwart, which has seen its dominance in multiple business lines challenged by newer entrants. PayPal has grown through a variety of acquisitions and new business lines, including by buying payment processor Braintree and peer-to-peer payment app Venmo, as well as efforts to expand SMB lending and an effort to offer buy now, pay later to combat the explosive rise of services like Affirm and Klarna. But, while PayPal has seen top line revenue grow, the erosion of its branded checkout service, among other factors, have contributed to margin compression. Chriss will be replaced by HP CEO and PayPal board member Enrique Lores, who will take over from Chriss as of March 1st. PayPal CFO Jamie Miller will serve as interim CEO until then. Freshly appointed independent board chair David Dorman commented on the shake up, saying, “While some progress has been made in a number of areas over the last two years, the pace of change and execution was not in line with the Board’s expectations.”

Checkout.com Acquires European E-Money Institution

In other payment processor news, Checkout.com is acquiring a Lithuania-based e-money institution, Blue EMI. Blue EMI offers embedded checkout solutions, payment card issuing for ecom businesses and crowdfunding platforms, and open banking connectivity. Blue EMI also holds a “token issuer” license, granted under the European Union’s Markets in Crypto Asset (MiCA) regulations. Blue EMI currently leverages that license to issue its own euro-pegged stablecoin, BLUEUR, which is used for transaction settlement on the Axiology blockchain. Checkout.com intends to tap this stablecoin to complement its existing traditional- and stablecoin-powered payments capabilities.

Crypto.com Latest to Enter Prediction Market Fray

Crypto.com is the latest to announce it’s getting into the prediction markets game. The company is launching “OG,” a prediction market platform that allows users to trade contracts tied to the outcome of real-world events. The market will be operated under Crypto.com subsidiary, Crypto.com Derivatives North America, a CFTC-registered exchange. Events users can trade include outcomes linked to the Super Bowl, March Madness, elections, and other entertainment events. The move comes amidst booming growth in prediction markets. The space, popularized by names like Kalshi and Polymarket, has seen a rush of new entrants.