The Fintech IPO Market is Rockin' Again 🚀

Klarna, Figure, and Gemini File to Go Public

September 05, 2025

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Fintech IPO Market Reawakens as Klarna, Figure, and Gemini File to Go Public

Despite the recent operational chaos highlighted by the Synapse failure, the fintech IPO window appears to be wide open again. BNPL provider Klarna is aiming to raise up to $1.27 billion, blockchain lender Figure is targeting a $4.13 billion valuation, and crypto exchange Gemini is seeking a $2.2 billion valuation. This flurry of activity suggests a renewed appetite for public fintech offerings, but these companies will face intense scrutiny from investors who are now acutely aware of the operational and infrastructural risks lurking beneath the surface of high-growth tech narratives.  

Source: Bankingdive.com

Klarna's AI-First Customer Service Strategy Implodes, Forcing Engineers to Answer Phones

Swedish BNPL giant Klarna, which had boasted its AI could replace 700 human agents, has reversed course after the strategy led to a decline in service quality and rising customer frustration. The company is now redeploying highly skilled employees, including software engineers, to handle customer support calls. This humbling reversal comes as Klarna prepares for a massive IPO, raising questions about its operational competence and the sustainability of its "AI-first" model. The move highlights a broader industry trend where the hype around generative AI is colliding with the reality of implementation, as seen in a recent MIT report finding 95% of corporate GenAI projects fail to produce financial returns.  

Source: EconomicTimes.com

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CFPB Steps in to Compensate Victims of Synapse Failure with Novel Use of Civil Penalty Fund

In a precedent-setting move, the Consumer Financial Protection Bureau (CFPB) has sued the bankrupt BaaS provider Synapse for its failure to safeguard customer funds. The most significant part of the action is the proposed solution: a nominal $1 fine that unlocks the CFPB's Civil Penalty Fund. The agency plans to use this fund, which has over $118 million available, to directly compensate the consumers harmed by Synapse's collapse. This marks the first time the CFPB has stepped in to make consumers whole when a non-bank technology provider, not an FDIC-insured bank, is the point of failure, signaling a major shift in regulatory accountability for the entire fintech ecosystem.  

Source: Bankingdive.com

CFPB Pulls Back on Broad Nonbank Supervision as State Regulators Fill the Void

In a seemingly paradoxical move, the CFPB has proposed a rule change that would reduce its routine supervision of nonbanks in markets like auto financing, even as it takes aggressive enforcement action in high-profile failures like Synapse. This suggests a shift toward "regulation by enforcement." As the federal agency narrows its focus, state-level regulators and Attorneys General are stepping in to fill the power vacuum, creating a fragmented "patchwork nation" of compliance. This trend, exemplified by the New York AG suing Zelle's parent company after the CFPB dropped a similar case, increases complexity and cost for national lending and marketing campaigns.  

Interview with Michael Meltz, Chief Strategy and Investment Officer at Experian

Experian has evolved from a traditional credit bureau into a global data and AI powerhouse, tripling revenue over 20 years with half of current income from new business lines. The company leverages generative AI through tools like Experian Assistant and EVA virtual assistant for its 200+ million consumers, while investing over $1 billion annually in technology. Under Chief Strategy Officer Michael Meltz, Experian has become one of the world's largest consumer financial platforms across 32 countries, using strategic acquisitions and platform integration to maintain its competitive edge in helping businesses manage risk and consumers improve their financial health.

JPMorgan Chase to Launch Digital Bank in Germany, Intensifying European Competition

JPMorgan Chase has announced plans to launch its digital retail bank in Germany in the second quarter of 2026. This marks the bank's second European retail market after its successful 2021 launch in the UK, which has already attracted over two million customers. The initial product offering in Germany will be a savings account, with plans to gradually expand to full banking services. The move pits the US banking giant against established German banks like Deutsche Bank and Commerzbank, as well as digital challengers like N26 and Revolut, in what is considered a highly competitive market.  

Payments Giant Wise Considers UK Banking License

International payments firm Wise is reportedly exploring an application for a full UK banking license, a move that would allow it to compete more directly with neobanks like Monzo and Revolut. A full license would enable the fintech to offer regulated deposit accounts, provide lending services, and gain direct access to the UK's payment infrastructure, reducing its reliance on third-party banks. This comes as Wise also plans to shift its primary stock listing from London to New York, though pursuing a UK banking license signals its operational future remains tied to the British market.  

FTC to Probe AI Chatbot Risks, Focusing on Harms to Children

The U.S. Federal Trade Commission (FTC) is launching a study into the privacy harms and other risks posed by AI-powered chatbots, with a particular focus on their impact on children. The agency plans to use its authority to compel major tech companies like OpenAI, Google, and Meta to provide information on how their chatbots store and share data, and the dangers users might face. The probe comes amid growing pressure from advocacy groups and reports of harmful interactions between teenagers and AI companions, highlighting increasing regulatory scrutiny over the real-world impacts of generative AI.  

Digital Identity Firm ID.me Hits $2B Valuation to Combat AI-Driven Fraud

Digital identity wallet ID.me has reached a $2 billion valuation after raising $340 million through a new funding round and credit facility. The capital infusion is aimed at tackling the rise of sophisticated, AI-powered fraud. This highlights the increasing importance and market value of robust identity verification solutions as financial services companies grapple with new waves of AI-driven security threats.  

Revolut Hits $75B Valuation in Secondary Sale, Highlighting Investor Confidence in "Super App" Model

While some fintechs struggle with monoline business models, European digital bank Revolut achieved a massive $75 billion valuation in a recent secondary share sale. This signals strong investor belief in the diversified, multi-product "financial super app" strategy. The valuation contrasts sharply with the challenges faced by specialists like Klarna and infrastructure providers like Synapse, suggesting the market is placing a premium on vertically integrated platforms that own the entire customer relationship, signaling a preference for resilience and diversification over narrow disruption.  

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Welcome to The Free Toaster! The newsletter for marketing pros at fintechs, banks, and lenders. 

Inspired by the free toasters banks used to give to each new customer, we’re here to help you acquire more customers at scale. We deliver fresh news, data, and insights to help you acquire more customers, minus the breadcrumbs.

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Carlos Caro is the founder of NMG, an agency that helps lenders build affiliate programs.

Nick Madrid is the co-founder of Ghostmode, a media company that builds Newsletters, Podcasts, and communities in high-value B2B niches.