Weekly Briefing No. 142 | Roman Times, Digital Mobs & Fintechnia

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Greetings, friends and Romans. Here’s what’s in our amphora this week:

  • Timeless money insights from Como, Italy

  • “Crowdthreatening” Sen. Susan Collins; Umpqua

  • Chain; Bloom Credit; Q4; RapidRatings; Facet Wealth

  • Georgia’s fintech academy; IEX; Cold boot attacks

  • JP Morgan & Goldman Sachs;, Airbnb

  • Skyline.ai; Credit Karma; Coinbio; Shel Kaphan; Amazon

REFLECTION

What’s in your amphora?

This week, we were intrigued by a piece in The New Yorker that explored Mark Zuckerberg’s obsession with Augustus Caesar, the brilliant, brutal nephew of Julius Caesar. But we then turned our attention to the tattered Roman Empire of 1,500 years ago instead. Split in two since the fifth century, the Western Empire (which contained Italy) had headaches to confront including sackings by the Goths and Vandals, plagues and the more formidable Byzantine Empire. In the midst of the chaos, an individual looking to preserve their wealth cleverly stashed away 300 gold coins in an amphora, an ancient storage jar used to carry olive oil and wine. According to Italian achealogist Luca Rinaldi, the coins were just discovered in remarkable shape in the basement of Como’s Cressoni Theater, a one-time opera house that was converted into a movie theatre in 1997. Press accounts indicate that archaeologists everywhere are energized by the finding and expressed hope that it would lead to more clues that could enhance our knowledge of the Roman Empire’s decline. Indeed, as many of us know, studying money and how it is used, stored, and sometimes hidden is one of the best ways to understand a civilization.

FEATURED NEWS

A crowdfunding digital arms race.

We highly recommend Jeffrey Rosen’s new article in The Atlantic that pairs James Madison’s opposition to direct democracy with the rise of social media. In our view, though, a discussion of fake news’ ability to foment a digital mob should also tackle modern-day campaign finance. Longtime FR readers know that we’re hoping (really hard) that innovation can foster greater financial transparency and mobilize disenfranchised voices within our electorate. Still, as with all things tech, unintended consequences are a thing. A case in point is Crowdpac, a very Silicon Valley start-up with a controversial past that collects donations for people considering a run for political office. On its face, we like this idea as a way to offset overly powerful advocacy groups and Boss Hogg billionaires who make a mockery of our one-person-one-vote principle. But a recent campaign seeking to pressure gypsy moth GOP Senator Susan Collins may have set a distributing precedent. In short, the platform hosted a crowdfunding campaign that raised over $1 million in support for a future challenger to Collins in 2020 – if she votes to confirm Judge Kavanaugh to the Supreme Court. For those rooting against his confirmation, it’s tempting to cheer this development. But consider this: The Koch Brothers and the NRA have powerful grassroots operations too. Or to put in another way, Madison must be spinning in his grave at warp speed.

Umpqua should stick to timber, not Tinder.

We admire Umpqua Bank’s commitment to innovation and its woodsy Canyonville ethos. As such, we hope that the bank is not likening its new Go-To app as a Tinder for personal bankers. A Zocdoc for private bankers? Perhaps. But unless Umpqua wants to promote a casual, short-term hookup between a financial advisor and a customer, the bank should swipe left on this metaphor.

Financings and transactions run the gamut.

9/11 observations, Rosh Hashanah, Apple’s oxygen-sucking product launch, Hurricane Florence and the Lehman bankruptcy’s aluminum anniversary all provided worthy reasons not to announce transactions last week. Still, several notable deals went public, including the acquisition of Chain by the for-profit arm of the Stellar Development Foundation. Also, Bloom Credit raised a $3.87-million seed round, Q4 announced a $38-million Series C, and RapidRatings, a provider of corporate third-party analytics, received $30 million. Finally, Baltimore’s Facet Wealth, a human/digital, goal-based financial advisor targeting people with $100,000 to $1 million to invest, raised a hefty $33-million Series A from Warburg Pincus alongside the well named Slow Ventures.

State of Georgia to be renamed Fintechnia.

After learning that the Buzzard State is pressing forward with a statewide fintech academy, it’s pretty clear that while our headline is untrue, it is true that Georgia is going all in on fintech. In support of the Georgia FinTech Academy, Georgia’s key financial services companies and all 26 schools within the state’s public university system are on board. Located at GSU’s Robinson College of Business, courses will cover software development, client services and business development, cybersecurity, data science and product development.

IEX steals its first listing client away from Nasdaq.

It’s been a long road, but IEX, the speed bump-using exchange founded by Brad Katsuyama, has finally bagged an elephant. The specific pachyderm is Interactive Brokers, and as of next month, its ticker will be found on IEX under the symbol IBKR. Is this a meaningful victory for IEX? Yes. Will it do much to hinder the incredible shrinking equity market that is a bigger issue than HFT? We don’t think so.

Just about all stolen laptops are vulnerable to cold boot attacks.

In speaking with cybersecurity experts, we’ve come to appreciate that an organization’s security is only as strong as its weakest link. To that point, we’re noting a recent report from Finnish security powerhouse F-Secure that examined a new twist on “cold boot” attacks. These attacks involve physically rebooting a computer without following a proper shutdown process, enabling a bad actor to steal sensitive data that is briefly retrievable before it’s overwritten. F-Secure claimed that the vulnerability was present in all modern laptops it had tested. And while there are precautions that can be taken, there’s no easy fix to addressing this weak link.

More news from JP Morgan, Goldman.

Another week, another battery of headlines from America’s two lodestar financial firms. Regarding JP Morgan, Jamie Dimon and President Trump partook in a testosterone-infused kerfuffle over relative brain power. Also, the bank offered 60,000 reasons for affluent millennials to sign up for a Chase Sapphire card and suggested that the rise of passive fund flows will help fuel the next financial crisis that may occur in 2020. This means, of course, that the next financial crisis won’t be in 2020. Meanwhile, at Goldman, David Solomon has repositioned the firm’s senior leadership around dealmaking and away from trading with the appointment of John Waldron, an i-banker straight out of central casting, as #2. Goldman’s Marcus unit also looks to have received a boost with the CFO appointment of Stephen Scherr, the firm’s former consumer and commercial banking chief.

WHO WON LAST WEEK, TODAY.

People are really interested in Airbnb’s hosts.

Our new segment borrows from the title of John Oliver’s brilliant TV show to provide our readers with insight on the most popular piece of content from the previous week’s edition. That brings us to The FR 141. In it, Caribou Honig and Philip Kessler’s blog posts saw robust engagement. However, Airbnb’s recent report showing that teachers comprise a hefty percentage of all Airbnb hosts “won” last week with over 1,200 clicks.

TROVE

Can real estate be traded on technical analysis?

When talking about real estate and technology these days, it’s hard to escape Compass. That’s why we liked this Compass-free episode of SED, which featured Skyline.ai’s CTO, Or Hiltch. In the show, Hiltch compares real estate data vs. stock data and discusses his desire to create the Ironman jumpsuit for real estate valuation.

Ken Lin of Credit Karma.

In this podcast hosted by Peter Renton, Credit Karma’s Lin discusses his company’s business model and the concept of autonomous finance, which speaks to Lin’s view that a growing percentage of the population will soon “completely trust” platforms to optimize all aspects of a person’s financial life.

You couldn’t Google your employees’ skills (until now).

Sponsored by Uiba

As organizations scale, lots of things improve for employees. Benefits can get more generous, and the cafeteria coffee may get fancier. But if you’re a manager trying to get a grip on your in-house talent, growing team sizes can pose a big challenge, especially if you’re in a knowledge-intensive industry. In fact, according to McKinsey & Co., the average knowledge worker spends about 20 percent of their time looking for internal information or tracking down colleagues who can help with specific tasks. That’s where Uiba comes in. With its new Internal Knowledge Engine, you can finally unearth all of the in-house knowledge residing in your company with the click of a button.

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Is there hope for the ICO market?

Amidst the swoon in Bitcoin and other cryptos, there’s been a healthy debate taking place about whether ICOs represent a viable alternative to more traditional VC fundraising. This recent TechCrunch article does a nice job of encapsulating the perspectives. The same holds true for Emily Chang’s recent interview of BitPay’s Sonny Singh, and Coinbio’s Stefan Katanic’s new piece in The FR. In the piece, Katanic points to clever firms like Corl and CryptoJanitor as reasons to hope that legitimate innovation and restoration efforts will help clean up the market.

An interview with Amazon’s first FTE.

Although the world is abuzz with Jeff Bezos’ recent visit to the Economic Club of Washington, we thought that a recent interview with Amazon’s almost co-founder, Shel Kaphan, was just as revealing about Amazon and the world’s richest man.

QUOTE OF THE WEEK

“The human mind is a story processor, not a logic processor.”

~ Jonathan Haidt