Time to dig up all our gold bars…

PayPal reaches for fintech’s final frontier -- the cash under your mattress

PayPal recently announced a number of new banking features -- including FDIC-insured accounts and ATM-ready debit cards -- to target people who don’t keep their money in banks.

Now, in the standing-room-only fintech industry, PayPal and others are looking past affluent, tech-savvy demographics and turning to the unbanked in a desperate bid to find new customers.

Back up a second, who are the unbanked?

Nearly 70m Americans are unbanked or underbanked -- meaning they rely on payday lenders or thinly disguised loan sharks to cash their paychecks. Typically, they make purchases with cash or prepaid debit cards.

The unbanked pay 15x as much as bank users to access their own money, and they often have trouble accessing the digital economy -- after all, you can’t pay for a Lyft to the doctor in cash.

But while the unbanked don’t have bank accounts or credit, 40% of them do have smartphones.

So, PayPal and friends want to become the new payday lenders...

But in a less evil, kick-em-while-they’re-down kinda way. PayPal’s service shares drawbacks with existing “alternative financial services” -- it charges deposit fees and doesn’t pay interest -- but it offers non-stifling fees (1% vs up to 10%) and, crucially, access to digital services.

As some traditional banks eliminate free checking accounts, competitive digital banking services like Chime, Simple, and Varo Money are moving into the void left behind -- by offering bank accounts, debit cards, and financial services that prioritize smartphones over bank tellers.

Un-banking is the nu banking

Fintech companies first expanded into banking to capitalize on young, wealthy, mobile-first users who preferred apps to physical banks. But when they got there, they realized there were also millions of smartphone-using, unbanked customers -- a global market worth $380B.

PayPal is the first company to directly target the unbanked -- not just bank-averse hipsters. But last week, a finance app called Stash rolled out a partnership with banks to appeal to bank-less customers including “those who have been systematically left behind.”

After years of R&D, SpaceX is set to be the US’s 3rd most valuable VC-backed company

This morning, SpaceX launches a Falcon 9 rocket carrying NASA’s most powerful telescope (for science -- but also to find aliens). This year, SpaceX has contracts with numerous countries for more than 30 launches, with today’s launch being the 7th.

And, earlier this month, SpaceX authorized a new $507m round at an out-of-this-world $25B valuation -- where Uber, Airbnb and a bunch of floating Skittles are its only company.

Starman isn’t taking off out of nowhere

In the past year, SpaceX launched the world’s most powerful rocket, launched history’s first rapidly reusable orbital rocket, and doubled in value since 2015.

But, Starman spent a lot of time in the workshop to get his 15 minutes of orbital fame -- from 2008 to 2013, SpaceX launched just 7 rockets, focusing instead on R&D.

Now, it seems to have paid off -- SpaceX has between 30 and 40 missions lined up per year through 2020.

They’re still nowhere near terminal velocity

Despite last year’s $3.9B flurry of investments in private space startups, it’ll still take years for new companies to accumulate a fraction of the research data that SpaceX has -- and few have such lofty long-term goals.

SpaceX hopes to deliver cargo and real, 4-limbed humans to Mars by 2024. Next on the checklist after helping NASA find aliens and colonizing Mars? Cutting the 12-hr flight from London to Hong Kong down to 34 min within the decade.

New VW chief looks to further push the company into the future

VW brand chief Herbert Diess was named the new CEO of Volkswagen on Thursday, and he’s already got some choice thoughts -- and buzzwords.

On Friday, Diess told CNBC that VW brought him in to whip them into shape to keep up with rapid changes in the auto industry: “We have to be fast and very innovative and that is basically why we did this organizational change,” he explained.

Too slow, Joe

VW’s previous CEO, Matthias Müller, has been credited with navigating the carmaking giant through its emissions scandal back in 2015.

But, according to CNBC, many sources feel VW acted too slowly on the company’s most recent scandal regarding unethical diesel emissions tests on humans and monkeys earlier this year -- a decision that apparently falls on Müller.

VW’s hoping that, by bringing in Diess, they’ll be able to close the book on “dieselgate” once and for all.

Now, it’s back to biz

Diess told reporters on Friday that he’s reviewing “all options” in VW’s portfolio, and clarified that could mean selling certain operations.

The company will now be composed of 6 divisions, with plans to expand electric vehicle production capacity to 16 factories over the next 5 years.

All-electric VW Vanagon in 2023? Fingers crossed.

Zuora’s IPO crushes, highlights the growing influence of the subscription economy

Subscription management software company Zuora went public on Thursday, and was well received by investors on the stock market following its debut.

After pricing their IPO at $14 and raising $154m, the company closed at $20 -- sending their stock up 43% and pushing the company value to $2B.

Which was much higher than expected

In their filings, the company said they planned to price shares between $9 and $11 -- before it raised that range to $11 to $13.

Founded by Tien Tzuo, the subscription pioneer was well ahead of the curve in the fledgling subscription economy when it launched in 2007. Tzuo knew that companies would need a system that understood how they collected and reported money with a subscription service.

Now, Zuora manages 950 customers, 15 of whom are Fortune 100 companies, and has made $167m for its fiscal 2018 revenue, up from $113m in 2017.

Subscriptions are here to stay

As we subscribe our way into what TechCrunch calls the “golden age of enterprise SaaS,” Zuora believes more businesses will shift to subscription models across sectors ranging from media, to transportation, to retail.

But this so-called cosmic shift doesn’t come without some hefty competition. Oracle and SAP have introduced competing enterprise resource options, but Zuora’s splash on the stock exchange makes it the hot SaaS flavor of the week.

Did you check your email yesterday? Well, stop what you’re doing and open that sh*t. There’s a Sunday story you don’t wanna miss.

Then, when you’re done, tell us what you think here in the comments.

-- LQ

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