Good morning, everyone, it’s 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—who cut his teeth at Apple and led digital transformation initiatives at Walmart and CBS—I came away with a different impression.
MoneyGram, if you’re unfamiliar, is a textbook case of the innovator’s 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’s 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.
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.
Since his appointment, Soohoo has wasted little time accelerating MoneyGram’s 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’s 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’t share its financials, but a spokesperson described it as “consistently profitable” with positive and growing free cash flow.
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’s Chief Technology Officer.
The second challenge, Soohoo says, relates to product building. On this front, he says, his time at Apple—where he interned and worked for four years—served him well. Soohoo recalled working on the company’s famous clamshell laptops and how he learned from Steve Jobs’ relentless focus on the customer experience. “Watching the way a user uses the product tells you what they need. You compete where you can be different,” he said.
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 “no one gets to 3.0 right away.” More broadly, Soohoo says that communication is a critical tool for achieving all of this—from a growth mindset to product excellence—and that he views his ability to use plain language as his executive superpower.
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’s name also sounds like Instagram. “Having ‘gram’ in our name is a huge advantage … It suggests people sending love to family and community,” he smiles.
It’s 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.
Jeff John Roberts
X: @jeffjohnroberts
Email: [email protected]
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VENTURE DEALS
– Cardless, a San Francisco-based credit card platform, raised $60 million in Series C funding. Spark Capital led the round and was joined by Activant, Pear, and others.
– ATEC, a Victoria, Australia-based developer of smart electric cookstoves, raised $15.5 million in funding. Lightrock and TRIREC led the round and were joined by Schneider Electric Energy Access Asia Fund.
– Sunhat, a Cologne, Germany-based AI-powered reporting platform, raised €9.2 million ($10.8 million) in Series A funding. CommerzVentures led the round and was joined by existing investors Capnamic, EnBW New Ventures, xdeck, and WEPA Ventures.
– Tilt, a Miami, Fla.-based AI-powered direct indexing platform, raised $7.1 million in seed funding. Portage and Lerer Hippeau led the round and were joined by Golden Ventures, Real Ventures, Cumberland Investments, and FJ Labs.
– Forgent, a Berlin, Germany-based AI platform designed to help businesses win public sector contracts, raised €4.3 million ($5.1 million) in pre-seed funding. Cherry Ventures led the round and was joined by angel investors.
– Prosper AI, a New York City-based developer of AI voice agents for health care operations, raised $5 million in seed funding. Emergence Capital led the round and was joined by Y Combinator, CRV, and Company Ventures.
– Helios AI, a Tysons, Va.-based developer of an AI co-pilot for food supply chains, raised $4.7 million in seed funding. Collide Capital led the round and was joined by S&P Global Ventures, Stray Dog Capital, Angeles VC, Equity Alliance, and Supply Change Capital.
– Mycroft, a Toronto, Canada-based AI platform designed to serve as a security and compliance officer, raised $3.5 million in funding. Luge Capital led the round and was joined by Brightspark Ventures, Graphite Ventures, and existing investors.
PRIVATE EQUITY
– Allwyn International agreed to acquire a majority stake in PrizePicks, an Atlanta, Ga.-based sports gambling platform, for an expected initial cash consideration of $1.6 billion.
– Carrick Capital Partners acquired a majority stake in Intelligo, a New York City-based risk intelligence platform. Financial terms were not disclosed.
– E Source, a portfolio company of Align Capital Partners, acquired CF Power, a Wilmington, Del.-based power systems engineering firm. Financial terms were not disclosed.
IPOS
– Neptune Insurance Holdings, 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. Bregal Sagemount, FTV Capital, Trevor Burgess, James D. Albert, and Wilbur L. Martin back the company.
– Commercial Bancgroup, a Harrogate, Tenn.-based community bank company, plans to raise up to $104 million in an offering of 3.7 million shares priced between $25.75 to $27.75. The company posted $89 million in revenue for the year ended June 30.
PEOPLE
– Greenfield Partners, a New York City and Tel Aviv, Israel-based growth equity firm, promoted Ortal Sasson-Hendin, Meir Cohen, and Josh Trup to principal.
