Weekly Briefing No. 138 | A High-Frequency Fund with a Fintech Twist, Sizzling Financings and Scooter Madness

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Greetings, readers. We invite you to take the innovation pitch with us. Here are our goals:

  • The FR’s one-on-one with Domeyard’s Christina Qi
  • Financings: Toast, Next Insurance and Convene
  • D-Wave hits Seattle; Swedish online bank “fires” its bot
  • Tiger Global bites into Softbank; Tuck’s new criteria
  • Opinion: A student debt call to arms; Scooter insanity
  • Trove: Nubank; Salt Lake City’s fintech future

Want to connect before our July 28th hiatus? Please contact Gregg Schoenberg here.

INTERVIEW

A conversation with Domeyard’s Christina Qi.

In recent years, Boston-based Domeyard has built a name for itself as a next-generation, high-frequency trading (HFT) organization that has marched to its own data-driven drummer. Indeed, everything from Domeyard’s website to its humble origins is in contrast to our nation’s HFT heavyweights. Another point of distinction is the company’s CEO and co-founder, Christina Qi. With her candid, unpretentious style, Qi has become an unassuming rock star in a market segment that is still darkened from the long shadow cast by Michael Lewis’s 2014 book, Flash Boys. In a recent conversation with The FR’s Gregg Schoenberg, Qi acknowledged her industry’s ongoing image problem but painted a picture for the future that will be driven less by speed demons and more by information processing expertise. Qi was also willing to shed some light on the fintech aspects to Domeyard, Softbank’s acquisition of a stake in the company, her position as one of the only female CEOs within HFT and the challenges of operating in a highly regulated environment — preventing her from disclosing performance figures. “This is hard for me, because as a Millennial, I’m used to sharing everything,” she said.

FEATURED NEWS

A wood-fired week of sizzling financings.

Our favorite Cobble Hill pizza joint runs an old-school point-of-sale system that consists of the owner’s outstretched hands accepting Hamiltons over the Quattro Formaggi and Margherita. Pointing out to Luca (not his real name) the obvious and needless inventory risk of a ten-spot landing on the succulent Neapolitan inventory wouldn’t be received well. But perhaps the smart people behind Toast, which just announced a $115-million Series D, will be able to convince holdouts like Luca that he’s leaving contanti on the table. Speaking of dough, Israel’s Next Insurance just raised $83 million to expand its direct-to-small-business insurance offering, and Convene, a tech-infused provider of workspaces and conference venues, raised a sizzling $152-million Series D this week. Often characterized as a competitor of WeWork, Convene has built a strong reputation for operational know-how. Now that the company has more cheese, we look forward to seeing what it can do to spur more innovation (and healthy competition) within the co-working sector.

D-Wave moves into the Emerald City.

D-Wave is one of a few companies usually named alongside tech giants in most discussions involving quantum computing and business. As such, and even though we usually don’t entangle ourselves into a knot when a Canadian company establishes a US presence, we’re noting that the maker of the 2,000-bit quantum annealer has made a run for the border by hiring Seattle-based Jennifer Houston. Presumably, this move will be the first of several taken by the Vancouver company to boost its US sales presence and demystify some of the questions surrounding this notable quantum systems and software maker.

Amelia, du är avskedad.

Maybe it’s because she was standoffish at her former employer’s annual Midsommarafton picnic, or perhaps she copped too much attitude in dealing with customers. Either way, Swedish online bank Nordnet has fired its much-balleyhooed “AI colleague” Amelia. But the pink slip shouldn’t depress “her,” though (not that “she” has feelings), as the Viking humanoid created by IPsoft seems to have no shortage of digital labor employment opportunities in front of “her.”

Tiger Global’s blurry bite into Softbank.

“I will make sure that the inside of our wallet becomes easier to calculate so that you can rest at night in peace.” Those words were spoken by SoftBank’s Masayoshi Son during his company’s recent shareholder meeting. Apparently, though, Tiger Global’s hedge fund division had already seen enough. On Wednesday, it disclosed that it had purchased over $1 billion of Softbank’s stock and pointed to a significant discount to the company’s NAV as an “odd anomaly.”  It’s also somewhat anomalous for a fund that is split between private and public investments (Tiger) to make an investment out of its public investment side into a public company that is increasingly focused on making private company investments (Softbank), some of which are also owned by the private side of the investing entity (Tiger). Got that?

Will future Dartmouth Tuckies be nice?

During the B-School golden age, Cornell’s Johnson School was known as “the friendly school.” Although that moniker was never accepted in any official capacity, it looks prescient today in the wake of news that the pound-for-pound MBA powerhouse Tuck program will officially incorporate niceness into its admissions criteria.

Hey, renovators: Don’t flip out.

Sponsored by Groundfloor

It’s tough being a real estate developer. Yes, it can be lucrative, but putting your capital, reputation and energy on the line again and again can be a roller coaster. One day, you’re on top of the world. But the next day, everything from zoning variance requests, general contractors and banks that don’t get it can get in the way of your piece of mind (and eight hours of sleep). Our friends at Groundfloor understand these challenges and pride themselves on doing everything they can to help residential renovators navigate the ups and downs that come with the territory. But don’t take our word for it. Check out Groundfloor’s website today... and rather than flip out, be prepared to chill out (and get some sleep).

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OPINION

The most innovative, snarky new thing in the world.

This week, truTV launched a terrific show, Paid Off With Michael Torpey. Conducted in standard host-contestant-enthusiastic audience format, Paid Off features indebted student loan borrowers competing to get their outstanding balances extinguished: “We’re the only TV show in the world that wants you to lose interest.” Packed with innuendo, mockery and overt messaging, this program is barely a game show. Rather, it’s a snark-to-arms plea for the nation to recognize the time bomb that will one day explode if the $1.5 trillion hungry tapeworm continues to gorge on the pecuniary innards of an increasing percentage of Americans.

But enough of the gloom. Humor, even of the gallows variety, can be a more effective driver of change. And judging from the first episode, we’re betting (hoping) that Paid Off goes to places that finger-wagging newsletters can’t. But it wouldn’t be right for us not to point out our one critique. At the show’s end, Torpey (Colgate ’02) urges viewers to call their representatives, implying that the government holds the main fix to the problem. That’s a dicey bet in our view, given Washington’s recent track record. Instead, we’re hoping that this program fuels the energy and bank accounts of “EduFintech” and education disruptors looking to expel the college status quo. Because while we’re happy that Madeline knocked $24,211 off of her debt, it doesn’t take an MIT degree to realize that a game show solution doesn’t scale.

Boaty McBoatface secures a $1-billion valuation.

Forgive our hyperbole, but what’s up with these alternative-to-car start-ups zipping from non-existence to unicorn status in a flash? When Chinese scooter companies like Ofo and now-acquired Mobike revved-up, we were able to do some back-of-the-laptop math on China’s urban footprint and say, “Well, okay.” But now that US start-ups like Bird and Lime are on board, it’s becoming a bit much. Mind you, we’re long and strong on urban transportation solutions that don’t have four wheels, and we understand the strategic coherence of the on-demand taxi-scooter alliance. We also think that the development of so-called SuperScooters (See this piece in TechCrunch) could one day improve unit economics and permanently sever the link between the scooter business and Pee Wee Herman. Still, this industry needs to slow down, as there will be more regulatory, insurance and safety obstacles to confront in the future. And usually, when you are priced to metaphysical perfection early on in life, it hurts more when you a hit a pothole.

TROVE

Brazilian financial rebels with a cause: In Brazil, a handful of large banks including Banco do Brasil, Itaú Unibanco and Banco Bradesco dominate the country’s banking market. But recently, a crop of agile innovators have been coming on the scene. One of the most notable examples is Nubank, a dynamic five-year-old online bank and credit card provider that we’ve been watching. In a recent interview on the Software Engineering Daily podcast, Edward Wible, Nubank’s co-founder and CTO, talks about his company’s journey and explains some of the key engineering and technical choices his company has made.

Will Salt Lake City be America’s fintech capital in 2028?: In 2017, Salt Lake City became Goldman Sachs’ fourth-largest office worldwide, and Goldman, in turn, became a top-20 employer in Salt Lake County. Of course, some of those employees, and those who work for other financial services firms in town, leave in due course. However, the slopes, low taxes, cost of living/doing business and tech talent keep many financial pros in the area as they move on to entrepreneurial pastures.

QUOTE OF THE WEEK

“I want to cultivate the seed that was placed in me until the last small twig has grown.”

~ Käthe Kollwitz