Zepz, which owns the WorldRemit and Sendwave brands, has a total headcount of around 1,600.
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LONDON — Zepz, the owner of money transfer firms WorldRemit and Sendwave, is on the hunt for mergers and acquisitions after cutting 26% of its workforce last month, the company’s CEO told CNBC.
With a $5 billion valuation, Zepz is one of the largest fintech companies in Europe, backed by leading investors including Accel, TCV and Leapfrog.
The company enables users to send money from a smartphone or computer to people abroad, who can receive it in their bank account, mobile wallet, or as a mobile airtime top-up.
The service is a challenger to large banks and established money transfer services like Western Union, touting cheaper fees and the ability to move funds rapidly. A close rival is Wise, which also claims to offer cheaper international money transfers than banks.
Mark Lenhard, Zepz’s CEO, said the firm wanted to grow its portfolio of businesses in an effort to own a larger part of the global digital payments pie.
Lenhard didn’t identify which companies Zepz was looking to buy, but said the sharp slump in private fintech valuations made it an attractive time to kick off M&A exploration.
Digital wallets
The overall value of cross-border payments is forecast to increase from $150 trillion in 2017 to over $250 trillion by 2027, according to the Bank of England. It’s a highly competitive industry with various players operating and taking a slice of each transaction a consumer makes.
A particular focus for Zepz product-wise in the near term is digital wallets, Lenhard said, with the company planning to launch its first digital wallet “imminently.”
“We want to be a core financial hub for a very particular segment,” he told CNBC Wednesday, with a particular focus on migrant communities sending funds home.
The push into M&A is a surprise move in many ways as it follows a significant amount of cost reduction at the 13-year-old company. In May, Zepz laid off 420 employees, equating to about 26% of its global workforce.
Zepz says it cut the jobs to consolidate its operations after its acqusition of U.S. remittances firm Sendwave led to a duplication of certain roles.
Still, at the time, Zepz said it wasn’t pausing hiring, and was actively trying to fill 200 roles.
It marked the second time in just under a year Zepz laid off staff. In June 2022, Zepz cut around 5% of its workforce, according to Sky News.
“Any time you’re laying off individuals it’s hard, it sucks, but it was certainly the right thing to do. We’ve expanded things out of that,” Lenhard said Wednesday.
He added that he hopes the company’s upcoming digital wallet product will convince customers to rely more on Zepz, rather than using competing digital banks and other financial apps which have grown their services to offer a much wider range of products.
PayPal, for example, offers users mobile wallets, the buying and selling of cryptocurrencies, and buy now, pay later installment loans, among other things.
Like other fintechs, Zepz has been in cost-cutting mode as the industry faces huge pressure from a slump in technology valuations, stoked by a host of macroeconomic headwinds including higher inflation and interest rates.
Despite this, Zepz says it has been less susceptible to those economic pressures than other firms in the space. World remittances is less impacted by broader macroeconomic pressures than, say, banking, according to Lenhard.
Zepz’s overall customer transactions are up 25% year-to-date as of April 2023, the company said, while its customer growth accelerated to 30% on average and by as much as 80% in certain areas.
The company, which hit monthly profitability in the first half of 2022, wants to achieve profitability on a full-year basis this year.
An employee walks past a quilt displaying Etsy Inc. signage at the company’s headquarters in the Brooklyn.
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Etsy is trying to make it easier for shoppers to purchase products from local merchants and avoid the extra cost of imports as President Donald Trump’s sweeping tariffs raise concerns about soaring prices.
In a post to Etsy’s website on Thursday, CEO Josh Silverman said the company is “surfacing new ways for buyers to discover businesses in their countries” via shopping pages and by featuring local sellers on its website and app.
“While we continue to nurture and enable cross-border trade on Etsy, we understand that people are increasingly interested in shopping domestically,” Silverman said.
Etsy operates an online marketplace that connects buyers and sellers with mostly artisanal and handcrafted goods. The site, which had 5.6 million active sellers as of the end of December, competes with e-commerce juggernaut Amazon, as well as newer entrants that have ties to China like Temu, Shein and TikTok Shop.
By highlighting local sellers, Etsy could relieve some shoppers from having to pay higher prices induced by President Trump’s widespread tariffs on trade partners. Trump has imposed tariffs on most foreign countries, with China facing a rate of 145%, and other nations facing 10% rates after he instituted a 90-day pause to allow for negotiations. Trump also signed an executive order that will end the de minimis provision, a loophole for low-value shipments often used by online businesses, on May 2.
Temu and Shein have already announced they plan to raise prices late next week in response to the tariffs. Sellers on Amazon’s third-party marketplace, many of whom source their products from China, have said they’re considering raising prices.
Silverman said Etsy has provided guidance for its sellers to help them “run their businesses with as little disruption as possible” in the wake of tariffs and changes to the de minimis exemption.
Before Trump’s “Liberation Day” tariffs took effect, Silverman said on the company’s fourth-quarter earnings call in late February that he expects Etsy to benefit from the tariffs and de minimis restrictions because it “has much less dependence on products coming in from China.”
“We’re doing whatever work we can do to anticipate and prepare for come what may,” Silverman said at the time. “In general, though, I think Etsy will be more resilient than many of our competitors in these situations.”
Still, American shoppers may face higher prices on Etsy as U.S. businesses that source their products or components from China pass some of those costs on to consumers.
Etsy shares are down 17% this year, slightly more than the Nasdaq.
Google CEO Sundar Pichai testifies before the House Judiciary Committee at the Rayburn House Office Building on December 11, 2018 in Washington, DC.
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Google’s antitrust woes are continuing to mount, just as the company tries to brace for a future dominated by artificial intelligence.
On Thursday, a federal judge ruled that Google held illegal monopolies in online advertising markets due to its position between ad buyers and sellers.
The ruling, which followed a September trial in Alexandria, Virginia, represents a second major antitrust blow for Google in under a year. In August, a judge determined the company has held a monopoly in its core market of internet search, the most-significant antitrust ruling in the tech industry since the case against Microsoftmore than 20 years ago.
Google is in a particularly precarious spot as it tries to simultaneously defend its primary business in court while fending off an onslaught of new competition due to the emergence of generative AI, most notably OpenAI’s ChatGPT, which offers users alternative ways to search for information. Revenue growth has cooled in recent years, and Google also now faces the added potential of a slowdown in ad spending due to economic concerns from President Donald Trump’s sweeping new tariffs.
Parent company Alphabet reports first-quarter results next week. Alphabet’s stock price dipped more than 1% on Thursday and is now down 20% this year.
In Thursday’s ruling, U.S. District Judge Leonie Brinkema said Google’s anticompetitive practices “substantially harmed” publishers and users on the web. The trial featured 39 live witnesses, depositions from an additional 20 witnesses and hundreds of exhibits.
Judge Brinkema ruled that Google unlawfully controls two of the three parts of the advertising technology market: the publisher ad server market and ad exchange market. Brinkema dismissed the third part of the case, determining that tools used for general display advertising can’t clearly be defined as Google’s own market. In particular, the judge cited the purchases of DoubleClick and Admeld and said the government failed to show those “acquisitions were anticompetitive.”
“We won half of this case and we will appeal the other half,” Lee-Anne Mulholland, Google’s vice president or regulatory affairs, said in an emailed statement. “We disagree with the Court’s decision regarding our publisher tools. Publishers have many options and they choose Google because our ad tech tools are simple, affordable and effective.”
Attorney General Pam Bondi said in a press release from the DOJ that the ruling represents a “landmark victory in the ongoing fight to stop Google from monopolizing the digital public square.”
Potential ad disruption
If regulators force the company to divest parts of the ad-tech business, as the Justice Department has requested, it could open up opportunities for smaller players and other competitors to fill the void and snap up valuable market share. Amazon has been growing its ad business in recent years.
Meanwhile, Google is still defending itself against claims that its search has acted as a monopoly by creating strong barriers to entry and a feedback loop that sustained its dominance. Google said in August, immediately after the search case ruling, that it would appeal, meaning the matter can play out in court for years even after the remedies are determined.
The remedies trial, which will lay out the consequences, begins next week. The Justice Department is aiming for a break up of Google’s Chrome browser and eliminating exclusive agreements, like its deal with Apple for search on iPhones. The judge is expected to make the ruling by August.
Google CEO Sundar Pichai (L) and Apple CEO Tim Cook (R) listen as U.S. President Joe Biden speaks during a roundtable with American and Indian business leaders in the East Room of the White House on June 23, 2023 in Washington, DC.
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After the ad market ruling on Thursday, Gartner’s Andrew Frank said Google’s “conflicts of interest” are apparent by how the market runs.
“The structure has been decades in the making,” Frank said, adding that “untangling that would be a significant challenge, particularly since lawyers don’t tend to be system architects.”
However, the uncertainty that comes with a potentially years-long appeals process means many publishers and advertisers will be waiting to see how things shake out before making any big decisions given how much they rely on Google’s technology.
“Google will have incentives to encourage more competition possibly by loosening certain restrictions on certain media it controls, YouTube being one of them,” Frank said. “Those kind of incentives may create opportunities for other publishers or ad tech players.”
A date for the remedies trial hasn’t been set.
Damian Rollison, senior director of market insights for marketing platform Soci, said the revenue hit from the ad market case could be more dramatic than the impact from the search case.
“The company stands to lose a lot more in material terms if its ad business, long its main source of revenue, is broken up,” Rollison said in an email. “Whereas divisions like Chrome are more strategically important.”
Jason Citron, CEO of Discord in Washington, DC, on January 31, 2024.
Andrew Caballero-Reynolds | AFP | Getty Images
The New Jersey attorney general sued Discord on Thursday, alleging that the company misled consumers about child safety features on the gaming-centric social messaging app.
The lawsuit, filed in the New Jersey Superior Court by Attorney General Matthew Platkin and the state’s division of consumer affairs, alleges that Discord violated the state’s consumer fraud laws.
Discord did so, the complaint said, by allegedly “misleading children and parents from New Jersey” about safety features, “obscuring” the risks children face on the platform and failing to enforce its minimum age requirement.
“Discord’s strategy of employing difficult to navigate and ambiguous safety settings to lull parents and children into a false sense of safety, when Discord knew well that children on the Application were being targeted and exploited, are unconscionable and/or abusive commercial acts or practices,” lawyers wrote in the legal filing.
They alleged that Discord’s acts and practices were “offensive to public policy.”
A Discord spokesperson said in a statement that the company disputes the allegations and that it is “proud of our continuous efforts and investments in features and tools that help make Discord safer.”
“Given our engagement with the Attorney General’s office, we are surprised by the announcement that New Jersey has filed an action against Discord today,” the spokesperson said.
One of the lawsuit’s allegations centers around Discord’s age-verification process, which the plaintiffs believe is flawed, writing that children under thirteen can easily lie about their age to bypass the app’s minimum age requirement.
The lawsuit also alleges that Discord misled parents to believe that its so-called Safe Direct Messaging feature “was designed to automatically scan and delete all private messages containing explicit media content.” The lawyers claim that Discord misrepresented the efficacy of that safety tool.
“By default, direct messages between ‘friends’ were not scanned at all,” the complaint stated. “But even when Safe Direct Messaging filters were enabled, children were still exposed to child sexual abuse material, videos depicting violence or terror, and other harmful content.”
The New Jersey attorney general is seeking unspecified civil penalties against Discord, according to the complaint.
The filing marks the latest lawsuit brought by various state attorneys general around the country against social media companies.
In 2023, a bipartisan coalition of over 40 state attorneys general sued Meta over allegations that the company knowingly implemented addictive features across apps like Facebook and Instagram that harm the mental well being of children and young adults.
The New Mexico attorney general sued Snap in Sep. 2024 over allegations that Snapchat’s design features have made it easy for predators to easily target children through sextortion schemes.
The following month, a bipartisan group of over a dozen state attorneys general filed lawsuits against TikTok over allegations that the app misleads consumers that its safe for children. In one particular lawsuit filed by the District of Columbia’s attorney general, lawyers allege that the ByteDance-owned app maintains a virtual currency that “substantially harms children” and a livestreaming feature that “exploits them financially.”
In January 2024, executives from Meta, TikTok, Snap, Discord and X were grilled by lawmakers during a senate hearing over allegations that the companies failed to protect children on their respective social media platforms.