Good morning, everyone, it\u2019s finance editor Jeff John Roberts pinch-hitting for Allie. In my day job, I talk to a lot of folks in the fintech and crypto space who are actively disrupting the legacy financial stack. So when MoneyGram reached out to tell me how they are staying competitive in this fast-evolving market, I was skeptical, to say the least. But after speaking with new CEO Anthony Soohoo\u2014who cut his teeth at Apple and led digital transformation initiatives at Walmart and CBS\u2014I came away with a different impression.<\/p>\n
MoneyGram, if you\u2019re unfamiliar, is a textbook case of the innovator\u2019s dilemma. The company started out in 1940 as Travelers Express, which specialized in money orders, and was acquired by Greyhound to be part of the bus company\u2019s suite of services. In 1988, that firm bought a smaller slinger of paper-based money services called MoneyGram, and a few years later adopted its name.<\/p>\n
You can probably guess how MoneyGram, with a distribution model that relied heavily on bus stations and other walk-in locations, fared when the era of Venmo and blockchain came along. By 2023, it looked like the end of the road as the company was drowning in debt and limping along with its share price in single digits. That year, though, it got a lifeline when PE firm Madison Dearborn Partners took MoneyGram private and appointed Soohoo as CEO last fall.<\/p>\n
Since his appointment, Soohoo has wasted little time accelerating MoneyGram\u2019s transition into a competitive force. Over lunch, the new CEO told me that digital transactions accounted for only about 20% of total transactions in 2019, but had climbed to 50% when he took over. During his tenure, he has already boosted that to 70% and, in another impressive feat, integrated a stablecoin tool into MoneyGram\u2019s app. The company rolled out the stablecoin offering last week in Colombia, which Soohoo says is an ideal test market given that the country has a large remittance economy and MoneyGram has over 6,000 retail locations there. MoneyGram doesn\u2019t share its financials, but a spokesperson described it as \u201cconsistently profitable\u201d with positive and growing free cash flow.<\/p>\n
I asked Soohoo how he went about the daunting task of retooling a legacy company to compete in the ferociously competitive fintech sector. He says the job has been a three-part challenge, the first of which has been transforming the organizational culture by putting in place the right teams and leaders. That has included hiring a former Klarna VP, Luke Tuttle, to serve as MoneyGram\u2019s Chief Technology Officer.<\/p>\n
The second challenge, Soohoo says, relates to product building. On this front, he says, his time at Apple\u2014where he interned and worked for four years\u2014served him well. Soohoo recalled working on the company\u2019s famous clamshell laptops and how he learned from Steve Jobs\u2019 relentless focus on the customer experience. \u201cWatching the way a user uses the product tells you what they need. You compete where you can be different,\u201d he said.<\/p>\n
Finally, Soohoo said he has had to introduce a culture of growth. On this front, he says, the task has been all about patience and recognizing that \u201cno one gets to 3.0 right away.\u201d More broadly, Soohoo says that communication is a critical tool for achieving all of this\u2014from a growth mindset to product excellence\u2014and that he views his ability to use plain language as his executive superpower.<\/p>\n
But what about the name? I point out that MoneyGram sounds like the old-fashioned word telegram, and that this must be an obstacle to modernizing the brand. Not at all, says Soohoo, who is quick to point out that the company\u2019s name also sounds like Instagram. \u201cHaving \u2018gram\u2019 in our name is a huge advantage \u2026 It suggests people sending love to family and community,\u201d he smiles.<\/p>\n
It\u2019s too soon to say if MoneyGram will be able to pull off the daunting task of competing with both the legacy giant Western Union as well as newer titans of money transfer like Wise and PayPal. But I did come away from our lunch thinking those competitors better not sleep on this Soohoo guy.<\/p>\n
Jeff John Roberts Submit a deal for the Term Sheet newsletter here.<\/p>\n Joey Abrams curated the deals section of today\u2019s newsletter<\/em>.<\/em> Subscribe here.\n<\/p>\n – <\/span>Cardless<\/b><\/a>, a San Francisco-based credit card platform, raised $60 million in Series C funding. <\/span>Spark<\/b> Capital<\/b> led the round and was joined by <\/span>Activant<\/b>, <\/span>Pear<\/b>, and others.<\/span><\/p>\n – <\/span>ATEC<\/b><\/a>, a Victoria, Australia-based developer of smart electric cookstoves, raised $15.5 million in funding. <\/span>Lightrock<\/b> and <\/span>TRIREC<\/b> led the round and were joined by <\/span>Schneider Electric Energy Access Asia Fund<\/b>.<\/span><\/p>\n – <\/span>Sunhat<\/b><\/a>, a Cologne, Germany-based AI-powered reporting platform, raised \u20ac9.2 million ($10.8 million) in Series A funding. <\/span>CommerzVentures<\/b> led the round and was joined by existing investors <\/span>Capnamic<\/b>, <\/span>EnBW<\/b> New<\/b> Ventures<\/b>, <\/span>xdeck<\/b>, and <\/span>WEPA<\/b> Ventures<\/b>.<\/span><\/p>\n – <\/span>Tilt<\/b><\/a>, a Miami, Fla.-based AI-powered direct indexing platform, raised $7.1 million in seed funding. <\/span>Portage<\/b> and <\/span>Lerer<\/b> Hippeau<\/b> led the round and were joined by <\/span>Golden<\/b> Ventures<\/b>, <\/span>Real<\/b> Ventures<\/b>, <\/span>Cumberland<\/b> Investments<\/b>, and <\/span>FJ<\/b> Labs<\/b>.<\/span><\/p>\n – <\/span>Forgent<\/b><\/a>, a Berlin, Germany-based AI platform designed to help businesses win public sector contracts, raised \u20ac4.3 million ($5.1 million) in pre-seed funding. <\/span>Cherry<\/b> Ventures<\/b> led the round and was joined by angel investors.<\/span><\/p>\n – <\/span>Prosper<\/b> AI<\/b><\/a>, a New York City-based developer of AI voice agents for health care operations, raised $5 million in seed funding. <\/span>Emergence<\/b> Capital<\/b> led the round and was joined by <\/span>Y<\/b> Combinator<\/b>, <\/span>CRV<\/b>, and <\/span>Company Ventures<\/b>.<\/span><\/p>\n – <\/span>Helios AI<\/b><\/a>, a Tysons, Va.-based developer of an AI co-pilot for food supply chains, raised $4.7 million in seed funding. <\/span>Collide<\/b> Capital<\/b> led the round and was joined by <\/span>S&P<\/b> Global<\/b> Ventures<\/b>, <\/span>Stray Dog Capital<\/b>, <\/span>Angeles<\/b> VC<\/b>, <\/span>Equity<\/b> Alliance<\/b>, and <\/span>Supply<\/b> Change<\/b> Capital<\/b>.<\/span><\/p>\n – <\/span>Mycroft<\/b><\/a>, a Toronto, Canada-based AI platform designed to serve as a security and compliance officer, raised $3.5 million in funding. <\/span>Luge<\/b> Capital<\/b> led the round and was joined by <\/span>Brightspark<\/b> Ventures<\/b>, <\/span>Graphite<\/b> Ventures<\/b>, and existing investors.<\/span><\/p>\n – <\/span>Allwyn<\/b> International<\/b> agreed to acquire a majority stake in <\/span>PrizePicks<\/b><\/a>, an Atlanta, Ga.-based sports gambling platform, for an expected initial cash consideration of $1.6 billion.<\/span><\/p>\n – <\/span>Carrick Capital Partners<\/b> acquired a majority stake in <\/span>Intelligo<\/b><\/a>, a New York City-based risk intelligence platform. Financial terms were not disclosed.<\/span><\/p>\n – <\/span>E<\/b> Source<\/b>, a portfolio company of <\/span>Align<\/b> Capital<\/b> Partners<\/b>, acquired <\/span>CF<\/b> Power<\/b><\/a>, a Wilmington, Del.-based power systems engineering firm. Financial terms were not disclosed.<\/span><\/p>\n – <\/span>Neptune Insurance Holdings<\/b><\/a>, a St. Petersburg, Fla.-based flood insurance company, now plans to raise up to $368 million in an offering of 18.4 million shares priced between $18 and $20. New York Stock Exchange. The company posted $137 million in revenue for the year ended June 30. <\/span>Bregal<\/b> Sagemount<\/b>, <\/span>FTV<\/b> Capital<\/b>, <\/span>Trevor<\/b> Burgess<\/b>, <\/span>James D. Albert<\/b>, and<\/span> Wilbur L. Martin<\/b> back the company.<\/span><\/p>\n
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